The archive · Consumer Apps · Strategic decision · 2007–2017
Change.org raises $30M led by Reid Hoffman after ad model forces layoffs
Change.org cut 30% of staff when ads stalled, pivoted to crowdfunding and promoted petitions, then raised a $30M round led by Reid Hoffman.
Change.org
What the business is
Change.org is a for-profit petition and fundraising website where anyone can start a campaign for social or political change; it earns money from organizations paying to use or promote on the platform and takes 5% of money raised through it.
Starting capital：$30M round announced 2017-05-26, led by Reid Hoffman (his biggest personal impact investment in a startup) with Sam Altman and Bill Gates participating.
How it started
In 2006 Ben Rattray, newly out of Stanford, pitched LinkedIn founder Reid Hoffman at a Silicon Valley Starbucks on his idea for a political website; Hoffman passed at the time. Change.org debuted in 2007 as a social network for creating campaigns around social issues, and by 2017 it had amassed 180 million users and more than a million petitions — credited by Hoffman with 21,000-plus policy changes, from a rape victim's petition that helped pass the Sexual Assault Survivors' Bill of Rights to a campaign that reversed Bank of America's $5 debit-card fee. In 2016 the company collected nearly $20 million in revenue from organizations and nonprofits paying to use the service and to advertise.
What happened
But sales did not grow as fast as expected, and in 2016 Change.org laid off 30% of its staff. 'We just weren't growing ad revenue to match how fast people were using the site,' Rattray said, so the company added crowdfunding (taking 5% of money raised), promoted placements for petitions, and memberships averaging about $9 a month — reaching roughly 20,000 paid members. By May 2017 Rattray said the new lines would generate millions of dollars of revenue that year. On 2017-05-26 Hoffman exclusively told Fortune he was leading a $30 million round — his biggest personal impact investment in a startup — with Y Combinator president Sam Altman and Microsoft co-founder Bill Gates also investing; nine million US users had registered since the November election.
How it ended up
The round was earmarked to expand the crowdfunding and promoted-petition strategy, and Rattray rebuilt the board around the business model — Crisis Text Line founder Nancy Lublin as chairwoman, with LinkedIn's Allen Blue, Flixster founder Joe Greenstein and former 23andMe and LinkedIn executive Sarah Imbach joining.
Background
Change.org began in 2007 as a social network for creating campaigns around social issues, the realization of the political website Ben Rattray pitched Reid Hoffman at a Starbucks in 2006. By 2017 it had 180 million users and more than a million petitions, with Hoffman crediting the platform for 21,000-plus policy changes — from helping pass the Sexual Assault Survivors' Bill of Rights to reversing Bank of America's $5 debit-card fee.
The business model lagged the audience: 2016 revenue was nearly $20 million from organizations paying to use the service and advertise, but growth fell short and Change.org laid off 30% of its staff. Rattray's diagnosis was that ad revenue was not growing as fast as usage, so the company pivoted to monetizing the campaigns themselves — taking 5% of money raised through crowdfunding, selling promoted placements for petitions, and adding memberships averaging about $9 a month, which reached roughly 20,000 paying members.
By May 2017 the pivot had attracted serious backers: Reid Hoffman revealed to Fortune that he was leading a $30 million round — his biggest personal impact investment in a startup — with Sam Altman and Bill Gates also in, and nine million US users had registered since the November election. Rattray rebuilt the board around the business model, bringing in Crisis Text Line founder Nancy Lublin as chairwoman and LinkedIn's Allen Blue among others, to keep expanding crowdfunding and promoted petitions.
What has to be true
- The ad model was structurally mismatched: usage was growing faster than ad revenue, so the company could not scale without a new, more predictable revenue line.
- The pivot monetized existing behavior: users were already organizing, so letting them raise money, promote petitions and join memberships fit how the site was used.
- Big-name capital followed the pivot: Hoffman, Gates and Altman backed the fundraising-and-promotion strategy, with Hoffman calling it his biggest personal impact investment.
- A board rebuilt for the business model — not just the mission — showed the company treating monetization as the core job.
What can be applied
When ad revenue cannot keep pace with audience, the users themselves are the asset: monetize their intent through crowdfunding cuts, promoted campaigns and memberships.
Aftermath
As of 2017-05-26 Change.org had closed a $30 million round led by Reid Hoffman with Sam Altman and Bill Gates participating, and Rattray said crowdfunding and promoted petitions would generate millions of dollars that year — the company took 5% of money raised, sold promoted placements and charged memberships averaging about $9 a month. It reported 180 million users and over a million petitions, with nine million new US registrations since the November 2016 election, and had rebuilt its board with Nancy Lublin as chairwoman. No later outcome was established in the sources for this entry.
Sources
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