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Announcing Our Investment in Venmo

Investments By AJ Vaynerchuk Mar 30th |

Excited and proud to announce VaynerMedia’s investment and involvement in Venmo. In addition to our monetary investment, Gary and I – along with the rest of the VaynerMedia team will do everything we can to help the Venmo team out. For reference, Venmo is not an “official” VaynerMedia client, similar to our relationship with our other investments in DailyBooth and WakeMate.

What it is:

Venmo is a SMS-based Payment Platform that helps you exchange money with the people you trust. The company was founded by Iqram Magdon-Ismail and Andrew Kortina and is based in Philadelphia/New York City.

What Personally Excites Me

The people and the platform. This is a classic example of investing in the entrepreneurs (while also loving the idea and the execution of the concept). Gary and I met with Iqram, Kortina, and a friend of theirs, Shreyans Bhansali, late night in NYC back in February. After spending a couple of hours with that group riffing and getting a vibe for their vision, Gary and I were essentially sold. Mind you, at this time Gary and I had little-to-no experience using Venmo. In the days that followed I got to play around with Venmo and showed it to some of the crew at VaynerMedia… that all but sealed the deal in my mind.

How we’re using Venmo at VaynerMedia

Since learning about Venmo I made it my mission to get our whole office on-board. As of today, every employee has a venmo account and I envision this helping the exchange of money for lunch and snack trips in the most phenomenalist (a word?) of ways. Employing Trust between friends is key for this process. Trust, in Venmo terms, is the ability for two Venmo users to freely exchange money without either side approving individual transactions^. Before you run away, it is worth noting that all transactions are reversible and the exchange of money is capped at $500.

^Editors Note (@drzhang): To clarify, you can exchange money on Venmo without “trusting,” but each transaction will need to be approved.  In this example, if Sam had never “trusted” AJ, AJ still could have texted “charge gosam 1.50,” but would have had to wait until Sam confirmed Venmo’s follow-up text before receiving the money.  With trust, invoices will go through automatically and without confirmation texts.

Real World Use Case:

Sam and I made a quick trip to the Hudson Square Cafe to grab some candy / chips / and drinks. During said trip Sam came to the realization that he had little to no cash on him and that the ATM at the Cafe barely works. Using Venmo, I simply bought Sam’s drink ($1.50) and sent this text to the Venmo short code:

Seamless.

* Also worth noting, I would have never asked for that $1.50 before Venmo. I would have simply paid for our snacks and told Sam not to worry about it. +1 for the guy who rarely collects!

What do you think of Venmo?

Would love to hear your thoughts in the comments section below.

Want an invite to Venmo?

If you would like an invite to Venmo shoot me an email at aj [at] vaynermedia [dot] com with your phone number and I will send you an invite ASAP.

Filed Under: Investments

Author: AJ Vaynerchuk

AJ Vaynerchuk is a co-founder of VaynerMedia, a social media agency that focuses on community management and emerging technologies.  AJ runs day to day operations at VaynerMedia while also serving as the key contact for many VaynerMedia clients.  In addition to his responsibilities at Vaynermedia, AJ serves as an advisor to several startups including WakeMate and Forrst.  He enjoys spending time with his family, reading on his iPad, and following the New York Jets.
  • thejasonsadler

    I heard a lot of chatter about Venmo at SXSW. Sounds like a cool product and if you guys are behind it, I'm in!

  • http://forever-digital.net jennjenn

    Wow this is great news! I met the Venmo guys at Halcyon which was basically their office for the duration of sxsw. They definitely had hustle and a cool product to boot! Glad to see their work paid off! Congrats guys! Can't wait to see it take off!

  • http://twitter.com/AJBombers AJ Bombers

    Hey AJ, we're super excited to begin heavy use of Venmmo in all of our restaurants. We're opening a new location this summer and intend to feature the payment option as part of our process.

    Thanks so much for sharing this with the world.

  • http://innonate.com/ innonate

    Totally excited for you guys!

  • cumalu

    It's so interesting that we have all of the technology to abolish the paper money system, but it remains incredibly popular. Vice trades (prostitution, illegal gambling, drug dealing) are really the only thing keeping this antiquated system alive. I like that this product would bring us a little bit closer to a paperless world. It complements another project that I'm following – the Square merchant system.

    My initial concern after reading @ajv 's report is that it's going to be tedious and cumbersome to enter every person into one's “trust network.” From what I understand, even if someone you know has a Venmo account, you can't exchange money with them until you mutually list each other as friends. There needs to be some way to integrate this with an existing network like Facebook, if this service is going to be successful.

  • http://soupsoup.tumblr.com Soup

    Congrats guys, I have been following Venmo for awhile now and it's a great problem they're solving in a clever way. They're in even better hands now with Vaynermedia throwing some support their way.

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    cumalu, regarding your concern. I should have spelled it out better, and may go back and edit after this post. You can exchange money on Venmo without trust, but each transaction needs to be approved. With trust, its automatic.

  • vadadean

    Implied permission is one of the biggest benefits of earning trust. My closest friends and family have implied permission to access my stuff and vice versa. Nice to see Venmo expressing this in the virtual world.

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    :) – thanks for the kind words Jason.

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    We're big fans of the Venmo's team hustle too, big fans!

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    AJ awesome to hear! I dream of a day when every restaurant utilizes Venmo :)

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Thanks Nate Dogg!

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Soup, appreciate the kind words. The Venmo team is awesome and we're happy to be helping them in anyway we can!

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Vadadean, completely agree. Will be interesting to see how they push culture on this one!

  • http://www.teresawu.tumblr.com Teresa Wu

    Poor Sam. He probably got lots of free chips before Venmo came along. :)

    I got my first intro to Venmo at SXSW — great product. Excited to see where it goes!

  • roborr

    Forgive me for not knowing, but how does this differ from Paypal? (outside of it not being an ebay company)

  • roborr

    Forgive me for not knowing, but how is this really different from Paypal? (outside of not being an ebay company)

  • gdeciantis

    Congrats guys. I am excited to see angel money flowing into the tech sector. It helps keep me employed.

    Alas, I don't understand the value of this particular business. The concept is cool, but I don't see how you can make money on transactions with friends. Do they charge for each message? Seems almost prohibitive to charge at all. Are people that cheap with their friends that they need to settle up immediately? If you need to trust someone to be able to settle the bill, then wouldn't you trust them to pay you later or forgive them the charge? And what is the incentive? Why would I want to sign up for this? I am skeptical, but I don't have all the info you do.

    It would be cool to receive money this way. Like an international money transfer via a text message. That would be pretty sweet. Also would be cool if you could pay a bill instead of using a debit card. Scan a bill barcode, hit the “Pay” button and it sends it straight over to the register. Have an end to end PoS system. Could work for winelibrary too. But I am ranting now.

    “We Accept VISA, MasterCard, Amex, Interac, and Vinmo”

    That would be cool. Fraud protection is very necessary though.

  • vickianzalone

    I am making time to learn more ! I LOVE the concept, trust, helping others, paying it forward. My son is heading to Hong Kong on Sunday focusing his head on expanding his video email business and flying with a wing and a prayer. I love his passion ! We have tried to instill the “teach to fish learn for a lifetime” rather than “feed the fish” motto however, sometimes it would be nice to just share the fish if you have it ! Looks like this is a way to do just that !

  • TheGreatWazu

    Love the concept… I would like to know more specifics in regards to the amount charged per transaction from business to business, ie- Pay Boarshead 3,500 dollars for meat, or customer to business, ie- Customer paying The Great Wazu for a sandwich. Do they pay at the register? When would I know they paid? Would my cell phone have to be at work while I'm not? Business to customer, ie- refund a customer who overpayed or who might have gone home with someone elses order… On paper…cool, in reality….not sure yet but hopeful. I'd like to be among the first restaurants to have the service. These are a few reasons I need to talk to the A to the J of the V.

  • http://www.easilyamusedinc.com/ James Tryon

    The Venmo guys are great. We spent some time with them at a coffee shop at sxsw. With in 5 mins, my self and two other friends all sent each other a $1.00. It was kinda fun. Once we all passed the $1.00 around, we started braking it up and started sending it to some of our other friends that where at sxsw.

    It was super easy. There is no fees if your sending it to friends. Everyone else out there on the internet – Keep a eye on these guys ;c )

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Venmo does not charge friends to exchange money. There are many opportunities to make money and the Venmo team will approach that subject when they are ready.

    Your point re: paying merchants is on point. Using Venmo can increase productivity for retailers and restaurants in a big way!

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Erik, good stuff. Venmo, and other platforms like it, could truly change the culture of payments between friends.

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Teresa, you're on the money, Sam's days of free chips is overrrr.

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Roborr, no worries. I truly feel that Venmo is different from Paypal, although Paypal is doing a lot in the mobile space too. The main difference is brand, theme, and user experience.

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Thanks for the comment! Glad you like Venmo :)

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Will be calling you tomorrow!

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    James, glad you were exposed to Venmo at SXSW – thought the Venmo guys did a great job hustling in Austin!

  • roborr

    AJ – thanks for the repsonse. I really like the sound of it – competition for Paypal will never be a bad thing! Do you have any plans on developing merchant tools for ecommerce businesses to integrate in to their sites?

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    roborr, the plans you are referring to are on the Venmo team. Will let them speak to that when they are ready :)

  • http://kissandtype.blogspot.com/ Arax-Rae Van Buren

    Check out my most recent blog post on VENMO! Headed to a boozy brunch now and I'm thinking this is a life saver!

    http://kissandtype.blogspot.com/2010/04/venmo.html

  • http://technbiz.blogspot.com paramendra
  • WB

    Venmo is a disaster of an operation. Several friends have attempted to sign up, only to have the service spam their ENTIRE gmail contact list without prompting them. The company (and by extension, its funders) need to clean up their privacy settings and make their terms clear, or risk life-ending lawsuits. Really, the tech universe should know better by now.

  • Cheliland

    What I understand of Venmo is that is more like an Online Bank…A Bank that people should be very careful with and very in control of… because dollar by dollar you can easily loose the track of the importance of saving or the importance of money, lending $1 here and $1.50 because is “COOL” and is “just” little money can be TRULy tricky, PLUS what is the benefit for Venmo being the bridge of all those transactions for no charge? hum…Data? Super personal Data at the mercy of the administrators to develop more projects that involve the use of it?…. How it works exactly? the way I see its more like a potencial way to raise funds for charity, if at every “X” location your are able to transfer “x” amount of dollars in the benefit of “x” cause then that's cool , you can use the same thing to support ideas, projects etc anything that is bigger than paying for a freaking cup of coffee for a friend that has the money to pay for the internet on his or her cellphone but not for a cup coffee?, oh you know what's cool that trough Venmo you could feed a person a day that way for every Venmo there will be a children feeded a day or school materials provided a day, each Venmo feeding a helping a Non Venmo which later becomes a Venmo =) Peace.

  • Cheliland

    What I understand of Venmo is that is more like an Online Bank…A Bank that people should be very careful with and very in control… because dollar by dollar you can easily loose the track of savings or he importance of money, lending $1 here and $1.50 because is “COOL” and “just” little money can be TRULy tricky, PLUS what is the benefit for Venmo being the bridge of all those transactions for no charge? hum…Data? Super personal Data at the mercy of the administrators to develop more projects that involve the use of it?…. How those it works exactly, the way I see it its more like a potencial way to raise funds for charity, if at every “X” location your are able to transfer “x” amount of dollars in the benefit of “x” cause then that's cool , you can use the same thing to support ideas, projects etc anything that is bigger than paying for a freaking cup of coffee for a friend that has the money to pay for the internet on his or her cellphone but not for a cup coffee?, oh you know what's cool that trough Venmo you could feed a person a day that way for every Venmo user will feed somebody else, each Venmo feeding a Non Venmo which later becomes a Venmo =) Peace.

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Cheliland, thanks for the comment! One thing I wanted to clarify is your thought of “than paying for a freaking cup of coffee for a friend that has the money to pay for the internet on his or her cellphone but not for a cup coffee?”

    Think of venmo more as a replacement of cash in these tiny transactions. Of course your friend could pay for the cup of coffee, but maybe that restaurant / cafe doesn't take credit, and your friend doesn't have cash on them, or maybe that friend left their wallet at the house. That is where venmo can really play a role.

    It's also SUPER convenient for splitting up restaurant bills between a group.

  • Cheliland

    GoodMorning AJ… Venmo could be the new cash replacement at student campus, for charities, suplly stores, cafes etc.. i agree, what striked me was that the most important use that is being talked about is buying coffee or splitting up a bill when the meaning of being able to have access to something like that could be bigger… I also saw sometime ago that in Japan you are able to pay for plane tickets and grocery stores just by swiping the bar code on your cellphone ( I don't have the tiny details about that), but for sure if you guys have the eyes on that project something good is cooking…Have a great day & Gracias por responder!

  • http://twitter.com/heathr heather gold

    AJ,

    I just had my first experience w Venmo. Loved the idea right away. Was excited to pay the street vendor in Philly via text. Unfortunately, the user experience hit speedbump after speedbump right after that.

    • got called to confim my credit card number. Entered it 3 times. It failed each time. There was no alternative given in the message to enter my CC info another way
    • went to the site, the only way to log in is via Facebook connect which I personally won't use. I've never seen another web app only give you a single sign in option.
    • the explanation given on the site (see screen shot http://brizzly.com/pic/35XZ) for facebook connect is a poor one. The thing that makes p2p sharing about a service valuable word of mouth is that you actually want to and choose to share info about the service, not that the service pushes you to do it
    • This guy who was able to sign in then had all his friends auto-notified without his permission. Again not cool. Bad marketing and undermines trust and likelihood of the user to spread good word.
    http://www.networkworld.com/newsletters/web/201…

    He makes excellent points about some of Venmo's terms of use as well. It's always best to be straight up and clear about how you're dealing with other peoples' money, their friends and trusted relationships. Also the mosre straight up the site is the more we feel like we know and are likely to trust Venmo.
    •Please hire a UX consultant.
    • I still owe that vendor sugarphilly $5. Can I paypal you guys so I can make sure he gets paid? let me know
    @heathr

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Hi Heather, before I dive in, I took care of the payment to @sugarphilly on Venmo. I told him that the payment was for Heather Gold – hope that is enough to take care of it!

    Devastated to hear that your user experience with Venmo was a bad one. The CC issue went smoothly for me the first time around :( . I actually like the Facebook Connect aspect, really helps with fraud IMO – Paypal dealt with fraud in a big way when they first started out – I think Facebook Connect can be a major help in this area. Will look into the final point more so, understand the concern there for sure.

    Would love for you to shoot me an email – aj at vaynermedia dot com – would love to continue the conversation!

    Thanks for the comment!
    AJ

  • http://twitter.com/BetterDayMvment Cherrie St Germain

    How do I get an invite to Venmo…the code listed here isn't working for me?

  • http://www.ajvaynerchuk.com/ AJ Vaynerchuk

    Sorry Cherrie! Shooting you an @reply now – if you see this, email me – aj@vaynermedia [dot] com.

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