WEBVTT - Supporting School Sports with Digital Fundraising 0:00:00.080 --> 0:00:03.240 You're listening to Bloomberg Business Week with Carol mess Here 0:00:03.240 --> 0:00:05.840 and Tim Stenebek on Bloomberg Radio. 0:00:06.440 --> 0:00:09.000 So when I was a kid, Carol, Yes, and I 0:00:09.039 --> 0:00:11.680 needed to raise money for you know something at school. 0:00:11.760 --> 0:00:14.400 We did walk a thon's for charity. We did school trips. 0:00:14.840 --> 0:00:16.640 I did it the old fashioned way. Okay, this was 0:00:16.680 --> 0:00:17.919 the nineties. Keep that in mind. 0:00:17.920 --> 0:00:18.560 Okay, yep. 0:00:18.840 --> 0:00:21.239 I went door to door with a clipboard. I ranked doorbells. 0:00:21.680 --> 0:00:24.320 Actually wore rollerblades so I could do it. 0:00:24.280 --> 0:00:26.400 Quicker, so I could go to the nineteen nineties. 0:00:26.520 --> 0:00:30.160 So southern California, nineteen nineties. I should have skateboarded. Actually, well, 0:00:30.160 --> 0:00:32.479 it was, of course before smartphones. Kids these days have 0:00:32.600 --> 0:00:36.000 other options, such as the one developed by our next guest, 0:00:36.080 --> 0:00:38.599 Cole Morgan, the founder and CEO of snap Mobile. It's 0:00:38.640 --> 0:00:41.120 a digital fundraising tool that high schoolers can use to 0:00:41.200 --> 0:00:44.760 raise money for schools, teams, clubs, and more. Colds here 0:00:44.760 --> 0:00:47.920 with us in the Bloomberg Interactive Brokers studio. Cole, good 0:00:47.920 --> 0:00:50.000 to have you with us this afternoon. I should note 0:00:50.400 --> 0:00:54.320 you raised seven hundred million dollars for one hundred thousand 0:00:54.720 --> 0:00:56.880 plus groups and teams a lot. 0:00:57.800 --> 0:00:58.560 It's a lot of money. 0:00:58.600 --> 0:01:00.840 Yeah, we're talking about some serious money here. Talk to 0:01:00.960 --> 0:01:03.920 us a little bit about the platform. And also I'm 0:01:03.960 --> 0:01:06.600 interested in the business model here and they take great. 0:01:07.080 --> 0:01:09.240 Yeah, so we h. So I would just say thank 0:01:09.240 --> 0:01:12.160 you for having me wuck. When I called my mom 0:01:12.200 --> 0:01:13.760 and told her the idea for the business, I told 0:01:13.800 --> 0:01:16.039 her we were going to raise a million dollars for schools. 0:01:16.800 --> 0:01:17.520 How old were you? 0:01:17.959 --> 0:01:21.760 I was twenty eight at the time, thirty eight now 0:01:23.400 --> 0:01:26.680 and now and I we're actually approaching about eight hundred 0:01:26.680 --> 0:01:28.320 million dollars giving back to school so far. 0:01:28.480 --> 0:01:28.840 Wow. 0:01:29.640 --> 0:01:32.240 So yeah. So we've we started a few years, started 0:01:32.280 --> 0:01:33.960 ten years ago. We're in about half the schools in 0:01:33.959 --> 0:01:39.200 the United States. We focus on financial transparency in schools 0:01:39.280 --> 0:01:42.479 and helping groups of people raise money for a common cause. 0:01:42.520 --> 0:01:46.920 Where a lot of the crowdfunding platforms online focus on 0:01:47.000 --> 0:01:50.480 individuals raising money come in quickly sign up. We help 0:01:50.640 --> 0:01:54.720 groups of people with that require oversight. So the school, 0:01:55.120 --> 0:01:58.760 you're a club organization, you know, where somebody actually needs 0:01:58.800 --> 0:02:01.520 to oversee the final antles of the of the group. 0:02:01.800 --> 0:02:04.120 We helped that group raise money and so the money 0:02:04.120 --> 0:02:06.960 goes directly to the organization or to the school, or 0:02:07.000 --> 0:02:09.440 to the nonprofit or whatever it is, rather than the individual. 0:02:09.560 --> 0:02:10.919 So how does it work? 0:02:11.760 --> 0:02:15.360 Kids log in, they send send out emails, text message, 0:02:15.440 --> 0:02:18.840 social media. January first, we're launching mobile apps. We'll have 0:02:18.880 --> 0:02:22.119 over a million kids download our mobile app next year. 0:02:22.320 --> 0:02:23.680 So there's no mobile app up to now. 0:02:23.880 --> 0:02:26.000 No, it's all been a web app. Wow, because of 0:02:26.120 --> 0:02:30.360 web apps. Really a web app was faster. But we 0:02:30.400 --> 0:02:32.239 had we actually had a mobile app and we very 0:02:32.280 --> 0:02:35.400 first started. But it would show up. You'd try to 0:02:35.400 --> 0:02:37.480 get all these kids to download a mobile app. It 0:02:37.480 --> 0:02:39.799 would take too long. But that was ten years ago, 0:02:39.800 --> 0:02:40.600 and kids weren't. 0:02:40.720 --> 0:02:42.480 They kept thinking they were down Snapchat. 0:02:43.360 --> 0:02:47.160 That had happened. That's happened. Yes, yeah, so they so 0:02:47.200 --> 0:02:49.720 they now they log in, they download the mobile app, 0:02:49.720 --> 0:02:52.000 and they go through the flow. You know, they send 0:02:52.040 --> 0:02:53.959 out their emails to friends and family. I'm sure you 0:02:53.960 --> 0:02:56.800 guys have actually probably gotten an email from a niece 0:02:56.880 --> 0:03:00.720 or nephew to donate to a a Finity program. 0:03:01.120 --> 0:03:03.840 No, no, So it'll take you to a site that 0:03:03.919 --> 0:03:05.640 shows you that it is Snap Mobile. 0:03:05.960 --> 0:03:08.079 It's yeah, we'll show you that so that that part 0:03:08.120 --> 0:03:11.079 of the platform is called Snap Raise, and it'll take 0:03:11.120 --> 0:03:13.840 you to that. It'll actually take you to that kid's 0:03:14.040 --> 0:03:17.120 fundraising page, because what we know is that people want 0:03:17.120 --> 0:03:20.359 to support kids and the causes that the kids care about. 0:03:20.360 --> 0:03:23.160 So it's not about supporting the actual football team directly, 0:03:23.240 --> 0:03:25.800 it's about supporting the kid who's a part of the 0:03:25.800 --> 0:03:28.560 football team. So it actually will take you to when 0:03:28.560 --> 0:03:31.960 my son starts using the platform, he's only two, it'll 0:03:31.960 --> 0:03:35.960 take you to Luke Preston Morgan's you know football page, 0:03:36.240 --> 0:03:38.520 and you'll Luke will have a goal, and then the 0:03:38.560 --> 0:03:40.760 team will have a goal above that. So it's a 0:03:40.840 --> 0:03:44.840 hierarchical structure that allows the team to raise money. So 0:03:44.880 --> 0:03:46.720 all one hundred kids on the football team are raising 0:03:46.720 --> 0:03:48.560 money at the same time for the same cost. 0:03:48.640 --> 0:03:50.440 You do live in Texas. You're already thinking about football 0:03:50.440 --> 0:03:51.240 and your kids only two. 0:03:51.400 --> 0:03:54.840 Yeah, yeah, well I played football. We live in Texas. 0:03:54.960 --> 0:03:58.120 This is the whole company is surrounded by it. 0:03:58.120 --> 0:04:02.280 It seems so logical. So what was it that what 0:04:02.360 --> 0:04:05.680 was the idea initially that you said, Okay, we've got 0:04:05.680 --> 0:04:06.280 something here. 0:04:06.440 --> 0:04:10.200 Yes, it's very simple ideas. It looks more simple on 0:04:10.240 --> 0:04:12.360 the surface than it actually is underneath. So we have 0:04:12.400 --> 0:04:17.719 an entire organizational database that connects school administration all the 0:04:17.720 --> 0:04:20.760 way to the communities in which they live and that 0:04:20.880 --> 0:04:23.440 support them. So there's a lot of data and infrastructure, 0:04:23.520 --> 0:04:27.880 financial transparency, oversight, security compliance. But on the surface, it 0:04:27.960 --> 0:04:30.640 was really simple. I was selling discount cards and cookie 0:04:30.680 --> 0:04:34.360 dough in schools after I got done playing football, and 0:04:34.560 --> 0:04:36.599 a coach said to me, we love that you're here, 0:04:36.640 --> 0:04:39.200 but we hate why you're here. So there's got to 0:04:39.240 --> 0:04:41.360 be a better way. This is the honest to goodness story. 0:04:41.360 --> 0:04:44.560 It's on our website. I said, what do you mean, 0:04:44.640 --> 0:04:46.919 He said, our kids. You know we need help. We 0:04:47.000 --> 0:04:49.479 need to raise money, but we don't want to do 0:04:49.560 --> 0:04:51.600 the things that you're making us do, which is sell 0:04:51.600 --> 0:04:54.200 these things. The school doesn't like that we take cash. 0:04:54.800 --> 0:04:56.480 The kids don't want to sell things, the parents don't 0:04:56.480 --> 0:04:58.919 want to buy things. They just want to support. So 0:04:59.000 --> 0:05:01.359 I said, okay, just like my whole life, have taken coaching. 0:05:02.080 --> 0:05:03.720 It's like what do I do? So I looked around 0:05:03.760 --> 0:05:05.760 the school and I saw every kid on their phone, 0:05:05.800 --> 0:05:08.120 and I started asking friends and family and people at 0:05:08.120 --> 0:05:10.440 bars and restaurants. I said, do you care about supporting kids? 0:05:10.480 --> 0:05:12.560 And they would say yes, And then I would say, 0:05:12.560 --> 0:05:14.080 do you have cash in your wallet? And they would 0:05:14.080 --> 0:05:16.000 say no, and I would say do you have your phone? 0:05:16.040 --> 0:05:17.320 And they would say yes. And I would say you 0:05:17.360 --> 0:05:19.279 have your credit card and they would say yes. And 0:05:19.360 --> 0:05:21.960 so I just put together the idea of the phone, 0:05:22.040 --> 0:05:25.919 the credit card, and kids asking politely for community and 0:05:25.960 --> 0:05:26.679 family support. 0:05:26.960 --> 0:05:28.039 So what's your take rate? 0:05:28.560 --> 0:05:30.160 Our take rate is twenty percent? 0:05:30.960 --> 0:05:33.800 Wow, Yeah, that's very high. That's much higher than I 0:05:33.800 --> 0:05:36.719 thought it would be. So of every dollar that is donated, Yeah, 0:05:36.760 --> 0:05:39.840 your platform takes twenty percent. Yeah, I was expecting two 0:05:39.920 --> 0:05:40.520 or three percent. 0:05:40.680 --> 0:05:42.720 Yeah, it's a it's a high take rate for what 0:05:42.760 --> 0:05:46.040 we'd for, you know, what you think of in the 0:05:46.040 --> 0:05:48.760 world of crowdfunding. But if you look at, you know, 0:05:48.800 --> 0:05:51.479 some of the other individual platforms, they just tacking on 0:05:51.560 --> 0:05:55.279 in a different way. We don't do that. There's a 0:05:55.560 --> 0:05:59.280 service based model for us. So we help organize, coordinate, promote, maintain, 0:05:59.320 --> 0:06:04.400 and manage the entire online fundraising event. So we're not 0:06:04.760 --> 0:06:07.880 the cheapest thing in fundraising, but we are the cheapest 0:06:07.880 --> 0:06:10.360 thing in school based fundraising, which is a very different 0:06:10.400 --> 0:06:13.120 thing because when you sell discount cards and cookies, you're 0:06:13.120 --> 0:06:14.400 only making fifty percent. 0:06:14.520 --> 0:06:16.160 That's one hundred and sixty million. I was just doing 0:06:16.200 --> 0:06:18.320 some calculations here, one hundred and sixty million dollars. 0:06:18.440 --> 0:06:21.120 But that's a big difference because you think about yeah, 0:06:21.160 --> 0:06:23.240 you know, whether it's girls scout cookies or what have 0:06:23.360 --> 0:06:26.440 you. You're saying that the kids only get fifty percent, Yeah, 0:06:26.600 --> 0:06:28.280 sometimes less, sometimes less? 0:06:28.360 --> 0:06:30.719 Yeah, are you because there's a product involved? 0:06:31.360 --> 0:06:34.000 Sometimes yeah, But you can hide behind the you can 0:06:34.080 --> 0:06:36.200 hide behind the fact that the product is there. 0:06:36.240 --> 0:06:37.880 But I'll be honest with you, having done that for 0:06:38.200 --> 0:06:41.520 nieces and nephews and buying wrapping paper and stuff that 0:06:41.560 --> 0:06:44.240 I really don't want, I'd rather have just given them money. 0:06:44.600 --> 0:06:46.440 But that's not the way it was set up. Are 0:06:46.480 --> 0:06:47.920 you going to only stay with schools? 0:06:48.040 --> 0:06:50.359 I don't mean only, but no, we were were I 0:06:50.360 --> 0:06:53.440 mean we are the largest, you know, youth organization fundraising 0:06:53.480 --> 0:06:57.000 platform as well. Yeah, it's just our main focus is schools, 0:06:57.760 --> 0:06:59.760 but we grow into the We grow into the youth 0:06:59.760 --> 0:07:01.839 side as well. One of the other things that we 0:07:01.920 --> 0:07:07.920 provide for the twenty percent take rate is financial oversight 0:07:08.360 --> 0:07:11.360 and compliance for every dollar that comes into your school. 0:07:11.960 --> 0:07:16.120 So there's a school actually locally that an athletic secretary 0:07:16.720 --> 0:07:19.760 absconded with some of the money and because they were 0:07:19.760 --> 0:07:22.800 a Snap client. This just happened a few weeks ago. 0:07:23.440 --> 0:07:25.320 Because they were a Snap client, they were actually going 0:07:25.440 --> 0:07:28.240 and have a full audit trail of every one of 0:07:28.280 --> 0:07:30.840 the donations and the dollars that came in, and they 0:07:30.840 --> 0:07:35.840 were able to, you know, help find out that what 0:07:35.920 --> 0:07:38.360 that athletic secretary had done, what happened? 0:07:39.000 --> 0:07:39.800 Are you profitable? 0:07:40.520 --> 0:07:40.880 We are not. 0:07:41.840 --> 0:07:43.600 Where are you spending all the money you've raised eight 0:07:43.720 --> 0:07:47.680 hundred million. I've eight hundred million dollars has gone to schools, 0:07:47.720 --> 0:07:49.520 which means one hundred and sixty million dollars has come 0:07:49.520 --> 0:07:51.320 to you. Guys, if we're getting you in twenty percent, 0:07:51.680 --> 0:07:52.520 where's the money. 0:07:52.320 --> 0:07:56.480 Going investment into the technology. We've acquired a couple companies 0:07:56.480 --> 0:08:02.040 as well. We've acquired three businesses, so are We've also 0:08:02.160 --> 0:08:03.640 raised capital as well. 0:08:03.560 --> 0:08:07.040 Ninety million dollars in a series B led by the 0:08:07.040 --> 0:08:10.480 investment group that owns the La Dodgers. Yes, Algrige twenty 0:08:10.600 --> 0:08:11.080 twenty one. 0:08:11.160 --> 0:08:14.920 Yep, yeah, yeah. So we've we've hired, we invest in 0:08:15.040 --> 0:08:20.200 hiring outside salespeople. So our salesforce we have one hundred 0:08:20.200 --> 0:08:22.520 and fifty boots on the ground that actually serve the 0:08:22.520 --> 0:08:24.440 communities in which they live. 0:08:24.800 --> 0:08:26.760 So is that your highest overhead or is it that 0:08:26.800 --> 0:08:27.600 in technology? 0:08:27.920 --> 0:08:30.720 It's that in technologies. We've also scaled up our technology 0:08:30.760 --> 0:08:31.360 team as well. 0:08:31.680 --> 0:08:34.240 Thirty seconds left. Here's the what's the endgame? Is it 0:08:34.280 --> 0:08:34.959 to go public? 0:08:36.000 --> 0:08:40.280 The endgame is to build the transformative platform that supports 0:08:41.080 --> 0:08:45.000 teachers and students. It's teachers and athletic directors and coaches 0:08:45.120 --> 0:08:48.319 the way that they support their kids. You know football 0:08:48.360 --> 0:08:51.319 background with me, so I focus on the process. If 0:08:51.320 --> 0:08:53.520 we build a great company that serves the needs of 0:08:53.520 --> 0:08:57.079 all of our customers, then who knows what happens. 0:08:57.200 --> 0:08:59.600 But you say you're going to stay within like helping 0:08:59.720 --> 0:09:02.599 for the US part schools or kenn it expands. 0:09:02.280 --> 0:09:06.480 Schools, youth organizations, colleges. Yep, yeah, it can grow quite 0:09:06.480 --> 0:09:06.640 a bit. 0:09:06.679 --> 0:09:08.160 There's a little bit of a growth runway there. 0:09:08.360 --> 0:09:09.680 It's a big market for us. 0:09:09.840 --> 0:09:13.360 And imagine a mode too with getting the schools signed on. 0:09:13.480 --> 0:09:14.480 That's a hard party. 0:09:14.720 --> 0:09:16.480 It's incredibly hard, and it's one of the reasons you 0:09:16.520 --> 0:09:18.360 have to invest the way that we're investing. 0:09:19.000 --> 0:09:20.520 Come back and let us know how things are going. 0:09:20.600 --> 0:09:23.960 I promise really interesting. Cole Morgan, founder and ceof Snapmobile, 0:09:24.600 --> 0:09:27.080 joining us here in our Bloomberg Interactor Broker Studio. Good 0:09:27.120 --> 0:09:28.040 Luck'll talk to you soon again. 0:09:28.080 --> 0:09:28.559 Thank you.