My phone buzzes when I get a text from a friend who is a partner at a VC company. It’s a screenshot of a Venmo notification that just came in. “My 2 cents on why you should invest in my business,” reads the message she received, along with a $0.02 transfer. I tracked down and emailed the founder who sent the transfer to find out what they were up to.
“Over the past two and a half weeks, I’ve reached out to more than a hundred VCs, angels, celebrities, athletes and influencers through Venmo,” said Chip Herndon, CEO and co-founder of chatterbox, in an interview with londonbusinessblog.com. He claims that his unorthodox marketing campaign has been very successful. “I received several responses, two of which were of exceptionally high quality. The first was a partner at [a venture firm]the other was an angel investor.”
Herndon claims those messages were the start of a series of meetings that could well lead to an investment.
Chatterbox is a platform that describes itself as a Nextdoor for Gen Z. It connects young people in their local communities through a medium they understand: group chats.
“In our early phase, we focus on university campuses. We have three core features: User Generated Chats, Emergency Chats and Permanent Chats. For example, we are launching at UCLA in October in conjunction with the president of the USAC,” Herndon claims. “As part of the MVP, we have permanent chats for every dorm, library and other high-density locations; we will also enable users to generate chats for interesting events they encounter, and finally we will automatically generate chats for emergencies.”
The founder says the Venmo-fueled outreach campaign stems from a desire to be noticed in an intensely competitive landscape.
“I had to get sloppy. I set aside four hours with just a pen and a piece of paper in front of me, and I didn’t allow myself to do anything but brainstorm until I had a strategy,” Herndon says. “At the time, I thought about several non-traditional ways to contact someone, but in the end I decided that Venmo would be the best.”
Using the Venmo platform’s search and profile photos, he set out to find the investors he was looking for, claiming that this allows him “to grab their attention in a way that doesn’t feel intrusive.”
Not all investors agree on that particular point. “It feels a little creepy,” commented one investor who received one of the Venmo transfers.
That may not be the case for everyone.
“You have to do what you can to get noticed,” said an employee at another venture capital fund I spoke to for this story, and for a moment seemed impressed by the creativity. “Would I like to receive a ton of $0.02 in donations with some random pitches for startups? No, but the first or two might stand out enough to pay attention to.”
Kudos to trying something new I guess, but keep in mind that gimmicks often backfire.
So, is this the next big way to reach investors? Personally I find it quite spammy. Let’s put it this way: the first PR person who tries to pitch a story to me through Venmo will be banned and blacklisted; my email address is easy to find, and in my opinion it feels very cramped trying to bypass the channels that are in place to get yourself 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.