GiveForward, a crowdfunding site for people to raise money for loved ones during difficult times, announced a $2 million Series A round led by Founder Collective and First Round Capital, with Naval Ravikant and Firestarter Fund participating. Terms of the deal were not disclosed. Today’s announcement follows a previous $500,000 angel round in 2011 by New World Ventures, David Cohen, Howard Lindzon, Tim Krauskopf and others.
Unlike Kickstarter and other crowdfunding sites, GiveForward is designed for users to raise money for a friend or family member in need. The company, which was incubated in Chicago’s Excelerate Labs, says it has over 3,000 active fundraisers, who it estimates will raise $25 to $30 million in 2012.
“GiveForward is more about friends helping friends,” CEO Desiree Vargas Wrigley said in a press release. “So often, people ask a loved one, ‘what can I do to help?’ But very rarely do they admit what they need most—financial support.”
The company says that after X-Games free-skier Sarah Burke passed away this past January after a skiing accident, friends quickly set up a GiveForward page and raised $300,000 in 72 hours to help Burke’s family pay medical bills.
Although GiveForward enables people to raise money for those in need, it is not a non-profit, as they take 7 percent of all donations. So, for example, around $21,000 of the Burke donations went to GiveForward. So the question for donors is: Can you raise more using GiveForward while sacrificing 7%, or by keeping it all and not using GiveForward? And are you okay with a portion of your donation going to a for-profit company?
Update: GiveForward co-founder Ethan Austin tells me the company’s 7% cut includes all fees (for credit cards, etc.) and is lower than many competitors’ 8-10% cut. He does note that some sites take a “slightly lower” percentage. He adds that GiveForward couldn’t be a non-profit the way that it is structured, giving money directly to individuals on a large scale. Finally, he adds that the team believes people will be “more successful raising here than anywhere else,” mostly due to the site’s trustworthiness for donors and simple interface for page owners.