People who run startup companies often say the experience can be a lonely one, with the success or failure of the company often riding on one person’s shoulders. Entrepreneurs find solace where they can, especially in the company of people who understand what they’re going through. The Startup Grind community is such a place. It was founded in Silicon Valley but has since expanded to 500 local chapters, with 2 million members around the world. The Princeton chapter holds meetings at least once a month and hosts speakers who share their own startup experiences firsthand.
The next meeting will take place Wednesday, April 3, appropriately enough at Tigerlabs — a business incubator full of startups — at 252 Nassau Street. The speaker is Michael Gasoriek, the founder of Truth Cartel, a marketing and product agency focused on emerging technologies. Tickets are $10. For more information, visit www.startupgrind.com/princeton.
The most recent meeting featured Chisa Egbelu, co-founder of the scholarship marketplace website Pedul, who is currently going through his own startup grind at the helm of a company he founded three years ago while he was still in college. Pedul is notable because it has completely pivoted its business model from the company’s inception.
Egbelu and his partners founded Pedul when they were all students at Rutgers. “When we started, it was just a project, not a business,” Egbelu says. “We were just meeting at the student center from 10 a.m. to 9 p.m. on Sundays, either learning how to code things up or learning how to write business plans and things like that.”
One of the factors that enabled Pedul to make the transition from student project to actual business was Egbelu’s family background. He grew up in Baton Rouge, Louisiana, where his mother had a business renovating homes and renting them out to Section 8 families. His father was dean of the college of engineering at Louisiana State University. “When your parents are entrepreneurs, you see the ugly side of business really blatantly. That pushed me to not want anything to do with business. But I learned things that would really help me later on because I’d seen what my mother had done, and it was very easy to imagine starting a business being an option, not making it such a huge undertaking. That was the difference between me and my peers at the time. I think that was why I was able to push myself and make it happen.”
Their idea was to create a crowdfunding website for college scholarships. Just like Kickstarter is used to fund consumer products, and GoFundMe is a platform for various causes and medical expenses for individuals, Pedul would be where scholars could go to tap their social networks for funds, from textbook costs all the way up to a full ride.
Unlike other crowdfunders, Pedul would send the money directly to the colleges. So far, Pedul has hosted more than 1,000 crowdfunding campaigns with various levels of success. One student raised $17,000 of his $10,000 goal, and another with similar aspirations only got $100. Seeing the disparate outcomes made Egbelu realize a key weakness in the project. “We realized crowdfunding can be an elitist process,” he said. “Not everyone has access to a network with capital. It’s not great to advertise to your personal network of family and friends and get like $100. We want students to be successful.”
Seeing that some students weren’t doing well with their campaigns, Pedul reached out to organizations that were offering scholarships and connected them to their students. Working through back channels like this, initially not part of the website, proved much more successful for the students. So far they have helped around 4,500 scholars this way, raising up to $50,000 for each one.
This experience completely changed the nature of Pedul from a crowdfunding website to a scholarship website. Pedul is now working with corporations and foundations that offer scholarships to become a single platform where students can apply for thousands of scholarships at once with a single application.
Then, after the students graduate, Pedul will help them find jobs with the organizations that sponsor the scholarships. “Students will be able to not only get money but also get access to the next level of their careers,” Egbelu said. “We work with corporations to make sure that happens.”
“It’s going to be moving away from the crowdfunding,” Egbelu said. “It’s a scholarship marketplace. That was a really good start for us and got our foot in the door and got us the lay of the land. But we are going in the direction that the platform is being used by customers now. We’re following their lead.”
Egbelu said the company is working on closing a “1.2 round” of funding after a lot of ups and downs with investors. He said he has had a hard time getting some investors to take his company seriously due to the fact that the company was founded while he was still a college student.
The “dorm room startup” image has been hard to shake despite the fact that Pedul and its three full time and three part-time employees now work out of Newark Venture Partners labs. Pedul has received its fair share of lowball offers that Egbelu said were not made to similar companies in his position.
“A really famous person out of Los Angeles with a celebrity venture capital firm offered us $500,000 for 52 percent of equity and I think they thought I would be ignorant enough to take that,” he said, and then paused a moment.
“Maybe we were ignorant not to take it — time will tell. But it’s so disrespectful and not comparable to other offers our peers were getting in the startup foster ecosystem. We are really having to assert ourselves. We’re holding our ground and writing our own narrative as opposed to letting others write it and assume it.” Pedul has gotten a fair amount of publicity so far, including a spot on Bloomberg TV.
The early years of the company have brought long hours and sacrifice. In an ironic twist, Egbelu had to borrow money that was meant for family members’ college funds in order to keep the company running. But he believes it will all be worth it in the end.
“I’m really excited about what we’re doing. We’re providing students in the U.S. with a plethora of scholarships, and it’s really uplifting work.”