Online Fundraising Software For Donors – Marcus Tetwiler (Sprinkle)

Marcus Tetwiler:

We look at political contributions as a 15 billion market where the candidates have had their needs prioritized for years, while the donor experience has fallen behind

Eric Wilson:

I'm Eric Wilson, managing partner of startup caucus, an investment fund and incubator for Republican campaign technology. Welcome to the business of politics show on this podcast, we bring you into conversation with the entrepreneurs who are building best in class political businesses, the funders who provide the capital and the operatives who put it all together to win campaigns. I'm really excited for our guest today. He's Marcus Tetwiler, the CEO of sprinkle. It's a new political tech startup just launched in July that connect grassroots donors with candidates aligned with their values and our conversation. We discuss the state of online fundraising and the challenges of campaign tech startups. So Marcus sprinkle, isn't just another donation processing application. You're doing one of these things that I'm really excited about. And we're seeing as a trend just across campaign tech broadly, which is software following the supporter, not the campaign. And so you've built sprinkle to follow the donor, not the candidate. What does that mean from a product perspective?

Marcus Tetwiler:

Fundamentally, you know, sprinkle is a new experience versus the status quo. Great marketplaces. If you think like traditionally like about marketplace technology, it's not just about bringing new information together and hoping for efficient connections. It's really about enhancing the user experience for both sides of the market at the same time. And we look at political contributions as a $15 billion and growing market where one side the candidates have had their needs prioritized for many, many years while the consumer experience, the donor experience has fallen behind. Eric, I'll give you an example of this. I think it's one that we all know very well is, you know, political spam, you know, candidates on one side of the market have gotten very good at sending emails and sending text messages and, you know, lighting their lists up to try to attract donors for contributions, you know, and then when donations occur through that strategy, their donors information, their private information is swapped and shared between candidates political action committees, you know, in most instances without donor consent.
You know, so if you think about like design decisions that the incumbents and I'm thinking specifically about act blue and win red, you know, the design decisions that these companies make, you know, an example being like intentionally making it seem like a donor's phone number is required for a donation, even though it is not you know, it makes it very one sided and donors know that. And for a lot of people who are participating in the political contribution market today, you know, there's millions of them, you know, this is working for a small percentage of the overall total addressable market. So, you know, while act blue and win red have been, you know, in existence. And we're kind of first to market in this processing space in a lot of instances, you know, these are two monopolies on one side or the other of the political spectrum who are existing largely without competition.
And what that has done is just dragged down the overall consumer experience. You know, if you look at the top trending like customer support tickets on either one of these services, websites, things like unwanted, recurring donations, meaning donor confusion or refunding of wrong amounts of donations, meaning donor confusion, or, you know, accidental duplicate donations, or, you know, split donations, receiving a link to a big page, which with a lot of information on it and, you know, feeling like you need to make that donation right there. And then having an issue with that for not actually being informed for what you've just spent your money on. You know, these are types of design decisions from the incumbents, which it makes sense when you're in this poll position in your existing, and you have a market captured that you can act in this way. But what sprinkle is trying to do is really build for the a hundred million active voters who are on the sidelines of this market, who are not reacting positively to political spam.
And we're laser focused on the 18 to 29 year old voting block, who in the most recent presidential election, 50% of them turned out and voted and cast that vote. We think that political contributions as a market in general are going to follow these younger, newer consumers. And we know that their expectations are just for a marketplace to be in their favor. That makes things easier. That makes it simpler for them so that they don't have to spend a lot of time and a little bit more transparent as far as what information of theirs is being used or what information is being shared to the candidates themselves. So back to your question, you know, it, it just comes back to enhancing the user experience. And we think that building for the donor is actually, what's going to unlock this market and grow it even more beyond what act blue. And when red had been able to do with the donors that they've earned through their own strategies, but we're looking to grow those strategies to bring more people into this overall market where we think a lot more good can be done as far as getting money to candidates directly who actually need the money. And we're really excited about that mission.

Eric Wilson:

Yeah. And I think we need to consider for a moment that the users on the software side, the customers themselves, which are the, the campaigns bear responsibility for some of these decisions, because you have seen, you know, when red, for example, has pulled back the ability to edit donation buttons, right? So you can't mess with the user experience. There are, there are limitations on how many pre-check boxes you can have. Unfortunately, you've seen campaigns which are operating on a different sort of time horizon. They've gotta reach their fundraising quarter are engaging in bad behavior. And so I just wanna make sure that we are clear on responsibility there, but I, I do wanna defend the importance of having one platform per party. You know, again, like if we're, we're looking at the, the relationship of serving the campaign, there's a huge benefit network benefits to having all candidates on one platform, cuz then we can do some really cool things like bundling donations, you get the one click donors.
But you know, one of the reasons I'm excited about sprinkle is you're trying to reach a whole different group of donors who haven't been attracted by the stuff that has worked. And, you know, you, you touched on a lot of the, the different ethical challenges that we're facing in the digital fundraising space lately are the communications we're sending true or not. Are we using supporters data in the ways that they expect? And so clearly sprinkle has a opinion on that. I'm, I'm curious to hear more about where do you land in a conversation over protecting donors interests versus protecting campaigns interests.

Marcus Tetwiler:

I completely agree that this is a conversation that is in a good way progressing. And I think it's really from a position of consumer expectations changing, you know, when act blue first founded, you know, the, the great technology marketplaces that consumers know and love, you know, like they would've been in their infancy or would've been starting as well. And I think what we've seen, you know, this isn't, you know, from a competition perspective saying that any one way is, you know, different or better, or, or indifferent, this is really just saying like, what are consumers looking for and what do consumers want? And it seems like what consumers want is for their data and for their personal and information and for their decisions that they're making to be protected. And if a someone is on the sidelines, who's never participated in making a political donation.
You know, one thing that's keeping them on the sidelines is almost like this looming threat that if they participate that, then they're gonna be on candidates, call sheets, and that they're gonna be getting phone calls from candidates that they've never heard of, that they themselves haven't personally discovered. So it's really like this order of operations that we're looking to completely flip the script on with sprinkle. We want to provide tools to donors to help them search and discover and identify candidates across the aisle, across the country that align with their underlying values. You know, and there's a lot of potential political donors out there who don't align with one political party or the other on a hundred percent of all issues. There's actually quite a few independence out there that do have a range of issues and they know what their values are, but there aren't really too many tools that are looking to bridge that gap for that experience to almost bring that person to the table, make it easy for them to participate. And to also start with a dollar amount, you know, as far as a grassroots contribution that is personalized and unique to them in their, their pocketbook and their budget, you know, we see that donors want privacy. We see that donors want speed and we see that donors want choice. They want to discover, they want to use tools to identify. They don't want to be sold to on the end of a marketing email or a, a mass generated text message.

Eric Wilson:

Yeah. The key insight that you are are building sprinkle on is that software can follow the supporter, can follow the donor. And when you switch who your customer is from from having to convince a campaign manager to sign up for your software, to convincing an individual supporter, to sign up for your software, it brings a lot of new opportunities with it. At the same time. One of the unfortunately unique things about our industry is the, the amount of scrutiny and regulation. You know, I, I think it contributes quite a bit to keeping innovators away and, and sprinkle is a great example of that. You had to go get a advisory opinion from the federal elections commission prior to your launch, talk us through that process and why you decided to go through that.

Marcus Tetwiler:

Yeah. You know, so on July 29th, the federal election commission voted in favor of sprinkles, bipartisan business model. And what do I mean by that? Like, I just want to be clear, you know, we have over a thousand Republican candidates on sprinkle today. We have over a thousand democratic part of candidates on sprinkle today. We also have hundreds of independent political candidates as well who, you know, are able to represent and, and, you know, work with whatever political ideology that they're bringing to the table. You know, that's what America is all about. And, you know, one thing that we wanted to do before we entered this market was to have this open conversation with the federal election commission to really understand what assumptions are consumers taking for granted, because the incumbents who are setting the market with little competition, you know, they're able to effectively set the rules of the game.
Does political contribution mean that my cell phone number is shared to other political candidates that I've never heard of? Or is that something that you know, is available for a new disruptor to provide different nuanced services and to make political, you know, connections with donors and candidates in a different way. Is there space for that? So what we were looking for was a very transparent conversation with the federal election commission, what is minimally required so that we can be minimally invasive to the political donors to follow what the political donors are looking for. You know, how can we reduce the workload on political donors? How can we make life easier, especially for this younger, newer generation who's coming into political contributions for the first time, you know, the gen Z audience has an expectation of immediacy. They also have an expectation of control. I wanna be able to edit, I wanna be able to change.
I wanna be able to adjust. There's also an expectation of if I'm going to give my dollar, I want to know that my dollar is being used in the right places. So, you know, there's two things that we were looking for specifically in working with the federal election commission. The first was our bipartisan model with Republicans and with Democrats and with independence and everyone in between, you know, is this, you know, in good standing and is our bipartisan position, something that, you know, the market can bear. And that was confirmed. Yes, sprinkles in good standing and sprinkle can complete these transactions. And that gives us two things. It gives consumer competence, and we want everyone who comes to sprinkle usa.com to know that sprinkle is legitimate and is able to process these candidate contributions on their behalf with the rubber stamp, from the federal election commission.
And we thought that that was a big deal for consumer trust, but it also helps with trust on the candidate side as well. When the candidates start receiving, you know, contributions from sprinkle that they're one click away from seeing a very thorough, full analysis of what the sprinkle business is and everything that it entails, you know, and, and the other thing is that we, we scored an opinion from the federal election commission that marks our difference in the market because of our bipartisan position. We can really show the comparison of candidates in elections that are priorities for the consumers. And what do I mean by that? I mean, if I'm a consumer with a certain specific set of underlying values and political beliefs that matter most to me, and I wanna sort my list of potential candidates to donate to by their need, meaning what is their relationship to their opponent that they're running against?
How much money does their opponent have? What does their opponent's profile look like? What is their opponent's last quarter's financial results? Holy cow, you know, this PO political opponent of this person that I found and discovered they have a lot of great traction. These two candidates are actually neck and neck in their grassroots contributions. That grassroots dollar to that experience for me goes further as a donor than it would, you know, just blindly giving a dollar to a candidate who I might not know what is the relationship of that dollar to them in comparison to their opponent? Do they even need it? Is this dollar even going to be used? Is it a close race? And so with the federal election commission also gave in this five to one decision is that sprinkle is able to use aggregate information of donor data, meaning contribution trends, itemized contribution trends, you know, corporate donation trends versus individual donation trends so that we can show donors, Hey, here's this aggregate of information to inform your decision to help, you know, where your dollar should be spent and where maybe it has the best chance for impact starting with the federal election commission.
Why did we do that? We just wanted to have that known with them that, Hey, we're on the side of the consumers, we're on the side of the donor. Our position in the market is to use this information to help them make informed decisions. And that's who we are. And we were really proud of that five to one decision. And, you know, there has been responses to our advisory opinion, challenging what we are doing and the differences, you know, and I'll just say in response to that, you know, the more that the incumbents fight back on competition to hold onto their status quo, you know, that just represents and signifies how needed change is in this market to move the needle in the consumer's direction.

Eric Wilson:

So what is that information that donors are looking for when they make the decision based on your research?

Marcus Tetwiler:

I think that the information so far that we're bringing is aligned with, you know, here are the social media profiles of the candidates, you know, so that you can make a quick click to the candidates themselves to see how they are marketing themselves on their own channels. Here's the link to the candidate's Instagram page. Here's the link to the candidate's YouTube page, just for informed decision making, to see what these candidates are saying, but also to see the relationship. And it's, it's a financial chart that you actually can see. And some people have said, you know, Hey, holy cow, this is like the Robin hood, you know, or E-Trade for political candidates, but it's, it's financial analysis, it's dollars and cents that's black and white that gives any consumer who's ever used a financial app, you know, an informed, relatable experience to kind of size up one candidate to the next.
A great example is just looking at if I, Eric made 10 selections and I have five Democrats that I care about, and I have five Republicans that I care about, and those are on my unique sprinkled team. Well, I'm able to now see what's the aggregate sum of contributions for my personal team in relationship to the aggregate sum of their opponents. So I'm able to see that holy cow, my 10 versus the 10 opponents that are out there opposing them, it's a 25 million to 26 million race. And my team's actually losing. And I feel that because I spent time curating this list. And now I see that they're behind in the dollars and cents category, and it's getting down to crunch time for these campaigns. So now I'm motivated to share that as a link, promote that to my friends, get that to my group text, get that to my buddies, get that to my family. I might not be able to generate all of the grassroots dollars myself personally, to close that gap. But I do have, you know, many friends and family. And if we work together as a community, we can close that gap for these candidates that we care about information.

Eric Wilson:

Also start to see how, you know, there, there, there are a lot of races that get so much attention from the grassroots. I'm thinking about like a Amy McGrath in Kentucky or Jamie Harrison in South Carolina, where those campaigns end up having more money than they could ever possibly spend. Meanwhile, there are other races that are, are winnable, they're competitive but they're, they're, they're underfunded. And so I, you, one of the things that sprinkle does that's really cool is you can, can see that pretty clearly of like, you know, this person who, who, you know, money is a good indicator. It's not everything. But, but if, if, if the gap is so large, you have to wonder, you know, what, what are other people not seeing

Marcus Tetwiler:

E exactly Eric and I, you know, I think, you know, sometimes this is talked about as like the Moneyball effect, right? Like Moneyball of X, you know, and, you know, data for data's sake, you know, it is useful to help people make decisions. And there's a lot of color and language and a lot of things in politics that can, for some consumers who don't live and breathe politics every single day, it makes it hard to kind of come up for air and really see, well, what is the state of things now? And, you know, I've got five minutes, I'm in traffic and I'm the type of person who's only spending minutes, not hours on these things. And if I tune into, you know, a race in Arizona, and I see that now Blake masters and Mark Kelly are officially running against each other. And I see that, oh my gosh, wow, what happened in the last quarter?
It looks like, wow, one person gave one of these candidates, 1.5 million, and you see this, just shoot up line, this, this difference. And you, you feel that right. You feel this race is close for a lot of people that money indicator or that money signal can be a real help for them to understand, you know, Hey, is my dollar needed here, or maybe my dollar actually isn't that needed here because the opponent that they're running against, you know, is quite far off in the money category. And maybe my dollar should be, you know, provided somewhere else. So it's just kind of the Moneyball effect to give people information services, to make informed decisions.

Eric Wilson:

You're listening the business of politics. So I'm speaking with Marcus Tet, Weiler CEO of sprinkle, we're discussing the world of campaign contributions and bringing more information to that. And, and I think it's really interesting how, how you are bringing a lot of different sources of information together. Of course, it's all publicly available, but it's just not as easy to access. And, and one of the reasons that you're, you're able to do that I think is because you are building sprinkle as a nonpartisan company. It's just been a few weeks, but I'm curious to hear from you, what are some of the early challenges that have come with that decision?

Marcus Tetwiler:

You know, it's actually interesting. I think that part of our partisan versus partisan position, it it's actually our unique separator, I would say. So this is as a, as a question, I think that this is one of sprinkles, greatest strengths, and I can give you kind of an example of that is, you know, while we've come to market with Democrats, with Republicans, with independents, it gives us the ability to show information to consumers that hasn't been shown before on the donation side of things. And an example of that is, you know, this idea of political performance metrics that are equal for all candidates under the sun. And a great example of that is out of the Luger center in Georgetown the bipartisan index, if you know, followers of your podcast are familiar with this, if not, I really suggest this resource going to the Luger center, checking out their website, you know, but basically the idea is that the bipartisan index is intended to fill a hole available to the public about the performance of members of Congress.
How likely is one member to reach across the aisle and vote for a bill that's sponsored by a member from the other party. And this is something that every cycle is updated and refreshed. What's really awesome and fun about being the bipartisan platform is that we're able to use information like the bipartisan index that has Republicans and Democrats listed, you know, under the same spectrum. And to give that as a resource for consumers to sort by, to say, you know, Hey, you know, Susan Collins and Rob Portman and Kirsten cinema, these, these are candidates that score really high. You know, Brian Fitzpatrick scores really high, John cat, cat co scores really high. These are people that, you know, maybe me as an independent, or maybe even, you know, as a member of a democratic party, maybe this would inspire a donor to look at someone, you know, who they might not otherwise have ever seen if they only existed in one political space of act blue or the other political space of win red, you know, this idea of being able to interact and engage across the aisle and have donations that go to candidates who are, you know, working to pass legislation.
That's one example of, you know, without bipartisan, you know, chip without candidates from both sides, we wouldn't be able to use resources like this as effectively. And so it just unlocks a whole creative space for us to bring more consumer services, to bear on a market that hasn't used them in this way before

Eric Wilson:

Marcus. One of the things that you've been doing that caught my eye is sort of made me sit up straight. It's like, oh, wow is, is, is calling out the de C, which is the, the, the house campaign arm for the Democrats. They have been along with the, the democratic governor's association have been propping up Republican candidates in G P primaries that they think will be easier to beat in the general election. And so it's kind of been this weird strategy and I, I, I think it's worked how they intended it to in a few places, but you know, you're talking about this in some of your ads to, to recruit new users kind of a, a bold move, if you will, because you're, you know, typically you wanna play nice with one of the, the big party committees, but you're, you're taking the opposite tack. And I'm, I'm just curious to hear, is that something that you're doing because you are coming from outside of politics and two, what's the motivation, the bigger strategy at play there,

Marcus Tetwiler:

Again, coming back to consumer expectations with their money, if I am giving my money to something, and I have an expectation for how it's spent. And I find out in a news article that my money was spent in a way that I had not intended, you know, that calls to question the relationship of the donor and the recipient, and all fair and love and war, you know, if the D C you know, continues and wants to execute along this strategy, I think what is owed in fairness to their donors is transparency of what they're spending their money on. And on the sprinkle side of things, you know, ads that are in consumer's interest, like asking the questions that everyone is asking is the D C giving my money to political candidates on the other side of the aisle. That's not what I thought that they were going to be using my money for, you know, and that just kind of opens up this rabbits hole of what is the role of the institutions that have their own payroll and their own admin and their own legal costs and their own administrative costs and their own insurance.
And then of course, you know, their own budgets for more donor marketing, for more email messaging for more auto text messaging, these things aren't free. And, you know, if you look at the way that the money is spent, like one idea is with a better technology service, that's more consumer friendly. Can we help consumers get a greater percentage of their donation to the candidates at the end of the race who actually need the money, you know, on the candidate side so that they can compete from one race to the next you know, related to the D C like Jason Crow in he's in Colorado, he's a Democrat, you know, he was quoted as saying, you know, this strategy and then quotes, it's very dangerous in this environment to be propping up candidates like that. And he called it a terrible idea and has raised concerns.
You know, I think that it speaks to the overall climate, Eric, if, if you would kind of let me go that far where, you know, it's not just spending money on political candidates that you wouldn't expect. It's, you know, looking at expenditures in general from the D C and as recently as August 1st, 2022, you know, 17 million have been spent in this cycle for RWT production. You know, that's marketing for donors for Titan tango, which is, you know, a SMS like text message marketing for donors, 4 million have been spent there, you know, act blue, which we've talked about today. You know, so a lot of donor marketing is being used to then market for more donor marketing. Right. And I think that with technology tools today, Eric, what consumers expect is for a greater percentage of their money to get to the candidates directly. So I think one thing that we're doing on our end is just having this question and having this conversation of what is the role of the middleman today,

Eric Wilson:

Right. Well, and that, that's the, that's the role of technology is that dissenter mediation and, and, and helping well, you know, the, the theory of the case behind these party committees was that, you know, it was, you wanted to connect the resources of the party with the races that most needed them. And, and technology has really done a lot of that heavy lifting. And I think there, there is this question of, well, what, what role and function do the, the party committees have? I think they've, they've got a very clear role going forward. And I think you're starting to see some, I guess I would chalk it up to kind of the di digital transformation of politics, right? So we're going through this area of things are changing. Things are different. We've gotta, we've gotta reevaluate our standard operating procedures Marcus, we're kind of coming towards the end of our time here today. I, I wanna hear from you, what, what Sur, what has surprised you the most about the political industry as a startup founder? Cuz I know you've got experience at other early stage companies and other industries what's, what's jumped out at you as, as most surprising.

Marcus Tetwiler:

The most surprising thing on my end is actually how well the worlds have been working together. So what I mean by that is, you know, sprinkles first move as a company before we launch on July 4th was to couple up with platform. Venture studio platform is headquartered in, in the bay area and they provide infrastructure for founders like me from all backgrounds to build groundbreaking companies like what we were talking about today on platform side, Jeremy Burton, he's a, he's a serial entrepreneur. He's launched more than 10 companies. He's been in the startup space for 30 years. He started his first company when he was 14. He's a, he's a veteran of building great marketplaces platforms, founding investor, his name's Tim Connors. He's an early stage, you know, focused guy. Who's had six early stage, you know, software exits and then ultimately developed, you know, six unicorns.
He was named to 2020 twos minus list for top a hundred venture capitalists in the world. You know, these guys from one side of the country who have been building great, great, great technology companies for years and years, the way that they've been working with and collaborating with, you know, folks on the political side. My biggest takeaway is that, you know, while the political market is deeply nuanced, is that the battle tested company strategies from, from, you know, what other industries and what other markets have done successfully, you know, that there's like this openness from political technologists, Eric like yourself to work with and to collaborate with people like Jeremy and Tim. So for sprinkling, the biggest surprise for me has just been that how how enjoyable it's been for bringing these folks together at one table who believe that in marketplace efficiencies, ultimately in the service of, you know, what consumers are looking for is the way to, you know, build great businesses. And I think that that's true for politics in the same way that it's true for other industries where we've seen marketplaces, like sprinkle succeed as well. Well,

Eric Wilson:

Yeah. Marcus, was there another startup idea in the political space that you considered before? Sprinkle?

Marcus Tetwiler:

Great question. Kind of a fun one. I think, yes. So I did some canvasing in Alabama, a number of campaign cycles back. And at the time I would've been working using this tool called N G van on the canvassing technology side of things. And they recently were sold to a private equity firm called apex. They're a British private equity firm. And you know, my thought then was that holy cow, this technology kind of feels like a single point of failure for everyone who's dependent on it. Just traditional with room for, for efficiencies. And I had kicked around at the time kind of halfheartedly an idea of a company called door Budds, which is a pretty terrible name <laugh> but the thought was, is like a

Eric Wilson:

Cannabis delivery service.

Marcus Tetwiler:

Yeah. Oh my gosh. I didn't even think about it that way, but I guess it could be but the thought was just for,

Eric Wilson:

It probably could have raised more money for that.

Marcus Tetwiler:

Exactly. Probably a little bit more on that end, a higher market cap, let's say no yeah, S obviously wasn't something that I pursued, but the thought was, was similar. You know, here are these candidates, they have technology tools. There's not that much competition within the tools themselves. Everyone's kind of all in on one thing. And the consumer experience suffers because of that. And in this instance, the consumers would be, you know, the kids out there who are actually putting data entry into these, into these apps as they're doing their canvassing, I thought at the time that they're would be a better way, but maybe someone listening to this, Eric will, will start that company for us. I think it's probably still a room room for improvement.

Eric Wilson:

Yeah. Well, I mean, you've, you've hit one. Everyone wants to change the canvasing apps, cuz that's kind of the first point of, of contact that people have political technology and, and two everyone, you know, I think one of the things that holds our industry back from a product standpoint is the, the customer and user are often, really far, far apart, right? It's, you know, I, I am the customer of my bank and I am the user of my bank software. That's not necessarily the case where the, the decision maker for your canvasing app is the state party chairman and the user is, is someone like you. So it's a really fascinating problem in, in political technology. Marcus, I wanna say thank you so much for joining us today on the business of politics show, people can learn more@sprinkleusa.com. There's a link in our show notes. If you enjoyed today's episode and it made you smarter, gave you something to think about, please share it with a friend or colleague. It'll make you look smarter too. And if you've been listening for a while, you're a big fan. Make sure you're subscribe. Number one, two, go leave us a review and a rating on apple podcast, cuz that really helps us reach more listeners every week. And with that, we'll see you next time. Thanks for listening.

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