My phone buzzes when I get a text from a friend who is a partner at a venture capital firm. This is a screenshot of a Venmo notification that just came through. “My 2 cents on why you should invest in my company,” reads the message she receives, along with a $0.02 transfer. I tracked down and emailed the founder who submitted the translation to find out what they were up to.
“Over the past two and a half weeks, I’ve connected with over a hundred VCs, angels, celebrities, athletes, and influencers through Venmo,” said Chip Herndon, CEO and co-founder of Chatterbox, in an interview with TechCrunch. He claims that his unorthodox marketing campaign has been very successful. “I received numerous responses, two of which were of extremely high quality. The first was a partner in [a venture firm]the other was an angel investor.”
Herndon claims those messages were the start of a series of meetings that could lead to an investment.
Chatterbox is a platform that describes itself as Nextdoor for Gen Z. It connects young people in their local communities through a medium they understand – group chats.
“In our early stage, we are targeting college campuses. We have three main features: user generated chats, emergency chats and persistent chats. For example, we will launch at UCLA in partnership with the USAC president this October,” Herndon said. “As part of the MVP, we’ll have constant chats for every dorm building, library, and other high-density user locations; we’ll also allow users to generate chats about interesting events they come across, and finally we’ll automatically generate chats for emergency situations.”
The founder says the propaganda campaign fueled by Venmo stems from a desire to get noticed in a highly competitive environment.
“I should have been upset. I spent four hours with just a pen and a piece of paper in front of me, not allowing myself to do anything but brainstorm until I came up with a strategy,” says Herndon. “During this time, I thought of a number of non-traditional ways to connect with someone, but in the end I decided that Venmo would be the best.”
Using the Venmo platform’s search and profile picture features, he set out to find the investors he was looking for, and claims it allows him to “get their attention in a way that doesn’t feel intrusive.”
Not all investors agree on this particular issue. “It feels a little creepy,” noted one investor who received one of the Venmo transfers.
However, this may not be the case for everyone.
“You have to do whatever you can to stand out,” said an associate at another venture fund I spoke to for this story, looking momentarily impressed by the creativity. “Would I be happy to get a lot of $0.02 donations with a bunch of random startup pitches? No, but the first one or two might stand out enough for me to pay attention.
Good on you for trying something new I guess, but be aware that gimmicks often backfire.
So is this the next big way to reach investors? Personally, I think it looks pretty spammy. Let’s put it this way: the first PR person who tries to pitch me a story via Venmo will be banned and blacklisted; my email address is easy to find, and in my opinion it’s really inconvenient to try to go around the channels that are in place to get to the front of the list. But then I’m a bit OldManYellsAtCloud.gif about these things; your mileage may vary. Just be aware of the first impression you make; it may not be as positive as you think.