Quest Moffat With Kadogo

Intro: [00:00:04] We’ll come back to the Startup Showdown podcast, where we discuss pitching, funding and scaling startups. Join us as we interview winners, mentors and judges of the monthly $120,000 pitch competition powered by Panoramic Ventures. We also discuss the latest updates in software web3, health care, tech, fintech and more. Now sit tight as we interview this week’s guest and their journey through entrepreneurship.

Lee Kantor: [00:00:38] Lee Kantor here another episode of Startup Showdown, and this is going to be a fun one. But before we get started, it’s important to recognize our sponsor, Panoramic Ventures. Without them, we couldn’t be sharing these important stories. Today on Startup Showdown, we have Quest Moffat with Kadogo. Welcome, Quest.

Quest Moffat: [00:00:56] Hey. How’s it going?

Lee Kantor: [00:00:57] It is going great. But before we get too far into things, tell us about Codigo. How are you serving, folks?

Quest Moffat: [00:01:04] Well, Codigo is a online platform that allows you to give others money away while saving on your taxes. And how it works is we are a dual sided marketplace that connects everyday employees of companies that offer matching funds with an easier way to obtain money to activate those matching funds. Because over 27 million employees lack the funds because either they don’t know about this program or just because they’re broke. To be able to activate their corporate funding. So we work with multiple restaurants and or service based businesses across the nation that offer cash back rewards for charitable contributions. So our platform allows you to shop at a series of merchants, earn cash back rewards, and then your employer has the option to double or triple whatever their rules are for their company. And we pass all of that money and information along to nonprofits.

Lee Kantor: [00:02:05] And that’s something that a lot of folks maybe don’t realize, that their company has matching funds, but they’re not taking advantage of it. And a lot of that is kind of just it’s a wasted opportunity, right? Like there’s so much funds available for these types of donations, but the employees aren’t kind of taking advantage of it.

Quest Moffat: [00:02:27] And it’s a multitude of things. It’s on one side. It’s because the employees aren’t taking advantage of it. On the other side, over 70% of businesses, they just don’t have the actual vehicle to make it easy for them to release the money that they have stored away for charitable contributions. It’s very administratively burdensome. Imagine if you had 200 employees that all of a sudden wanted to donate money to a host of different nonprofits. According to your plan, someone has to verify each nonprofit, send a letter to each one of them to make sure they’re still in business, get some information from them, send all that information over to whoever runs accounts payable, or probably that’s the same person, and then send all of these donations downstream. It’s not like all 100 employees had this same exact nonprofit that they were about to donate to. Everyone cares about something different from animals, the forest to women’s rights to STEM education. And so we made it easy to do it through one platform for the business to allow their employees or their customers to give the money away on behalf of them.

Lee Kantor: [00:03:38] Now, what was the genesis of the idea? How did you kind of stumble upon this problem to solve?

Quest Moffat: [00:03:46] I used to be in the nonprofit world on on both sides. I’ve worked for large organizations, big nonprofits, and I’ve worked for my own personal nonprofit. And when I was running my own personal nonprofit for the first time, coming out of the for profit world to support early stage entrepreneurs and raising money rapidly validating a business thought it was a great idea and to the point where we got early stage funding, but it was programing dollars and I did not understand the difference between programing dollars and the operations dollars. I thought we could use programing dollars to also keep the operations of the business going of this nonprofit, as well as paying for the people. My salary, plus other things found out. You can’t do that. We redid the whole entire program again, but we were doing it the proper way where you’re using the program dollars to run the program and not the operations of the company. And that leaves a big void as you can quickly run through your head. Everyone else in the company is getting paid. But. Quest And I saw that, hey, there’s patriots out there. You can do that. But that’s not really geared towards a nonprofit leader. I knew I had an email list of a lot of donors, and a lot of them were my friends. So I was in a restaurant one day and I was just flipping through and on the back of the brochure it Panda Express and also on the wall that just has a nice big old poster that says, Hey, we’ll donate 20% of every transaction to a nonprofit.

Quest Moffat: [00:05:17] And it got me thinking how many other restaurants do this? Now there’s some other people out here that have tried. The downside is, is you still have to, like, schedule this stuff. You have to like manually schedule each restaurant or each business and then coordinate with your friends and family and all of your donors to send them there. So it’s kind of hard to like organize more than one of these restaurants at a time. And so that’s when I got my programing mind on. I was at a large conference and I saw the exact same thing. I saw a very large nonprofit with over 10,000 people at a conference try and do this. It was an administrative nightmare. So that’s how I came up with it. I saw two, I experienced it, I experienced it. A very large nonprofit that I worked for. And so we came up with this idea, my co-founder and I, to where what if you could integrate with open banking technology, you could integrate with the payment rails of your debit card or your credit card. So Visa, MasterCard and Amex would have to be on board. And if you could somehow see the transactions or integrate like a point of sale system and operate like all of the loyalty rewards applications that were used to the day, but except put a spin on it and make it charitable now.

Lee Kantor: [00:06:40] Yeah, go ahead. Now, there’s obviously the this is complex. It involves individuals and it involves these restaurants. It involves the nonprofits. So walk me through what the experience is like for an individual like say, hey, I’m I’m in. This sounds great. I want to do this. So so how does it work for me? How easy is it for me to kind of plug into this marketplace and aim my dollars in the direction I want them to go in.

Quest Moffat: [00:07:07] Three steps, download the app, register your debit card. So we only need the 16 digits of your debit card in the expiration date. That’s it. No other personal information from there you select up to five non profits that you would like your rewards to go to. And then if you are a power user, you. And look at the restaurants and the businesses that are in there. If you don’t care, we just send you a text message and let you know that you have gone to one of our many affiliate restaurants or businesses and you just earn $3. We keep it moving.

Lee Kantor: [00:07:43] And then the money just gets divided up evenly among the.

Quest Moffat: [00:07:48] Money just gets divided up evenly and automatically donated downstream. You receive a tax receipt at the end of the year for your donations.

Lee Kantor: [00:07:55] And then from the nonprofit standpoint, is this something that the nonprofit has to sign up with or are you partnering with places that already vet nonprofits?

Quest Moffat: [00:08:05] Yeah, so we’re doing it two fold. So we utilize, of course, the IRS database, and we’re looking for that good standing letter that the IRS looks at for all nonprofits. On the other side, we partner up with community organizations like foundations or community groups that have a bucket of nonprofits under them, that are doing the good work of the community, that are very close. And so nonprofits have the option of either if they know about Codigo, they sign up. We either reach out to them, but here in the next couple of weeks, we would have all 1.65, 1.7 million registered nonprofits. That includes universities, churches, schools that are all in there organized. Geolocated closest to you so you can find the non profits that are in your community, that are on the ground doing the work so you can give the money to them.

Lee Kantor: [00:08:59] And then from the enterprise level you’re partnering with the enterprise level companies that are doing matching so that we can take advantage of that as well.

Quest Moffat: [00:09:10] Yeah. So we go after companies that have already a matching program or they do some type of charitable contributions or donations locally in the community. You can spot it super easy off of Google or on their website. We primarily go after companies that organize massive give days. Give days is a single day or a week where they get all of their employees together to donate simultaneously on one day over a specified period of hours. Those, like I said, those are very complex to run. When you have multiple parties in place, we charge them starting off at $450 and a dollar a month. And then it just goes up from there tops out at around 1500 dollars a month. It does give them a little bit more power. These these giving accounts, the ones that are for the employers that are on these premium plans, allows them to donate in an alternate way. So not only can they fill up their wallet in an easier way by shopping in a community, that’s fun. The next level of it is these wallets allow them to donate securities. So a lot of these employees have stock. They are having capital gains or they are if their companies are doing well like they’re supposed to, the stock is increasing in value. But Uncle Sam comes knocking on your door once a year, wanting that money on that capital gains.

Quest Moffat: [00:10:40] They could take the capital gains and actually donate it to any non profit that they want. So a lot of nonprofits are not equipped to receive stock or anything within the Web3 space. There are a couple of us on this frontier that are enabling non profits to receive crypto and or anything within that web3 and we want it to allow those nonprofits that they don’t have an administrative staff. Most likely they don’t even know about this. And if someone said, Hey, I want to give you some Ethereum or a Bitcoin or a Doge, or here’s a nifty that I want to give you. A lot of nonprofits don’t know what to do with it, let alone if you said, Hey, I have five shares of Tesla that I would like to donate to you, that’s something that foundations have traditionally handled for the nonprofit. So nonprofits usually go to a foundation and set up an account, and then the foundation receives that. I think you need to have a little bit more choice and control. Because, Lee, if I came to you, do you want me to automatically liquidate all five Tesla shares and then give you the cash? Or would you like to hold on to a couple of those Tesla shares and make the choice to liquidate it or keep it?

Lee Kantor: [00:11:53] So now. Yeah, right. So you’re talking about a donor advise fund at this point.

Quest Moffat: [00:12:02] Yeah. So every codelco giving account, you know a little bit about my industry. So every giving account that we issue is a donor advice fund. Instead of setting them up in 2 to 6 months, it takes 5 to 15 minutes to deploy one of these for a company and per employee. Everyone on our platform gets their own donor advice fund and it allows you to do a multitude of things. But we’re keeping it very simple for everyone right now.

Lee Kantor: [00:12:23] And that’s not typical, right? Like a donor advised fund was typically for wealthy folks.

Quest Moffat: [00:12:31] Yeah, there’s yeah, it’s typically for ultra rich and wealthy folks to be able to change their adjusted gross income by making a direct donation to their donor advice fund and but still having control of the money rather than giving it to a foundation and losing control. So these donor advised funds allow you to invest into private equity if you still have control of it or you go and put real estate under it. The whole intent is to grow the money that is in the account. Get the tax optimization benefit of the immediate year. Maybe I sold some real estate and I spiked my income, so I want to donate it so I can get that immediate taxable benefit we’re going to allow. I want everyone to be able to have one of these. I believe not just the rich and the ultra wealthy should be able to have one. I believe the person that’s making $25,000 up to $150,000, call it dual income households. The most amount of people that pay the most amount of taxes. If everyone if special people have the ability to be able to adjust their taxable income while still being charitable and having an impact on their community, why shouldn’t everyone be able to have access to that? So it already with your 41k or your IRA, your HSA, let’s be very charitable with the with the donor advised fund side.

Lee Kantor: [00:13:44] So how did you pull this off in terms of, you know, kind of before? I would think that people who wanted to do this, there are some sort of a minimum amount and that is burdensome, burdensome for regular folks. How did you kind of get around having that kind of minimum investment amount?

Quest Moffat: [00:14:05] I’m not interested. Okay. Well, let me rephrase that. It’s not our first business line of making profit. There are many other ways of making profit in revenue, which is why we have a SAS plan, which is why we have a SAS plan, a monthly subscription for individuals or the company. We want to be focused on that asset under management fee where it was. We’ve talked to a lot of wealth management or financial advisors where they can’t focus on the person below $1,000,000, let alone a person that $150,000 three years in at Boeing or Qualcomm, super talented, 27 year old, the 30 year old. They’re not. But approaching them. That’s what Wealthfront was for. But Wealthfront just got purchased for that reason. And so I believe that. You. How we pulled it off was, like you said, it’s complex, is that there’s all of the revolving pieces of a proper donor advise fund. Starting off with you need the nonprofit status so there is could go Gibbs. That’s the 500 1c3. Behind that you have a brokerage. So we have a brokerage partnership behind that. Then you have the our for profit that owns all the technology and that allows for you to achieve your taxable benefit, allows for you to get your taxable immediate donation. It allows for that entity to transfer the funds on the platform to other nonprofits that are within the ecosystem. And then that allows for the non-profits to now receive their funds in a multitude of ways, or divest their funds in a multitude of ways to grow their cash based investments.

Lee Kantor: [00:16:07] So now when you started this, did you try to bootstrap this at the beginning, or were you always looking for funding and looking for kind of venture help in this?

Quest Moffat: [00:16:19] I bootstrapped as much as possible because I knew that if we took on early capital, we were going to give up a chunk of the company. I did, since I did run a startup studio and a venture builder out a Rolodex of investors. So I circulated through my close network and took some very good advice from some investor friends that if I can bootstrap it and get this to a certain stage, get some customers on the platform, get some early stage traction, that this would be a lot easier. We still operate within the charitable space, but we don’t operate in the charitable space. We try and as you all know, it’s hard to raise money within the doing anything for non-profits. They’re a hard sell, but we’re in the enterprise side of that operation. When I started this entity, I guess be here at that point.

Lee Kantor: [00:17:12] So how did you hear about the startup shutdown?

Quest Moffat: [00:17:17] I went through. So I started off after that bootstrapping moment. We went through a another like a venture builder start up studio, early stage. We went through a generator in motion startup studio out in Lincoln, Nebraska, mainly because of their financial background in the in the city, very financially connected. That financial that journey through the studio was the first set of, call it early little legs where we built our little our beachhead. And through that, I heard about startup showdown through them by talking to a run. I was running through 5 to 10 investors a day with generator and one of the investors was like, Hey, you should really go through Startup Showdown. She threw the link over here. She sent it again through the email and even sent it to me through Twitter if you need to apply. Even stated that even if you don’t win, that it would be a great form of just general advertising and people just knowing about your business.

Lee Kantor: [00:18:31] So what was the most beneficial part of going through the process?

Quest Moffat: [00:18:38] I’d say the most beneficial part is it’s just always nice to be able to speak with. Individuals that know a little bit about the industry. Like you mentioned, you picked up on donor advised funds. Not a lot of people know about. And so that has someone be able to. Pick it apart and then offer ways to make it a little bit palatable and more understandable is a great benefit. At any point. So also they there’s a little bit more of how to streamline the message so it doesn’t become overly complicated as we keep peeling back the onion.

Lee Kantor: [00:19:24] Now, have you had a mentor or maybe another startup founder that has been inspirational to you during this journey?

Quest Moffat: [00:19:39] During this journey. I mean, I have my my co-founder Alejandro is my CTO. We had another co-founder, she died and that was our that was my mentor inspiration piece. She had all the licenses for series six, seven and 24 was the registered broker. Outside of this now is her name is Annie. Annie has been. She’s actually out in Lincoln. Annie has been one of our or. Annie Crimmins has been one of our. Probably the individual that I can randomly call it ten, 11:00 at night. Or early in the morning. I think the last time we spoke, she was on our way to Target. And I needed help with a piece of my. Of my pitch, but I was just, you know, just typical founder stuff. You know, you’re just going through the typical woes up and downs. And I realized after I looked down, we’ve been on the phone for like an hour and 50 minutes, and at the end of it, she was like, Well, I’m going to go to Target. And I mean, you have mentors and you have advisors and then you have like mentors that turn into friends. And I would say that’s been Annie is just a good person that has like a deep wealth of knowledge, of experience, that when we first met, I didn’t know that she knew what all the donor advised fund stuff was or to foundations or nonprofits.

Quest Moffat: [00:21:17] It was as we peeled back the iron and gained trust and start to really learn about each other, you just start to know. And on the other side, I mean, there are some other mentors and advisors that thanks to Sputnik and being a part of their program now another accelerator here in Austin is you just serendipity meet. Mentor or people that end up being your mentor or being your advisor without you really asking for it, and they end up asking you to be your mentor or advisor. So we’ve started to run and I’ve started to run into some of those. So I’m I’m working on being a little bit more open. A lot of founders are very closed off and protective. And specifically after I lost my co-founder, I became very closed because it was hard to deal with loss and grief and all that fun stuff that goes with it. But I’ve got a wealth of mentors and advisors around me now that keep me moving forward.

Lee Kantor: [00:22:16] Now, do you have any advice for other startup founders who are working in this space? Because as you mentioned, this is a difficult space to be starting new ventures and.

Quest Moffat: [00:22:27] I call it if you’re sitting in a frontier space where there are minimum people doing it, or when you explain it even to licensed and regulated people, I’m talking about the wealth advisors and the financial advisors don’t even know what the hell are you talking about? You know, you’re in a in a space. Even if you don’t think you need the licensed mentor and advisor in the space grab that licensed individual. So my advice is always keep experts and professionals that have been there and done it. With 20 years knowledge on you because it can help you cut through a lot of stuff way faster and easier. I learned about a section of the wealth market that I had no idea existed because of legal laws of what happens with IRAs after a certain time frame if you don’t need it later conversation. But I wouldn’t have known that if this financial wealth advisor was not my advisor, not from that side, but from a company standpoint. It’s been in the game for 18 years. There’s going to be some things that I cannot learn on Google or classes or talking to people that he knows. There’s another woman that’s one of our advisors that we’re playing with that she’s been in the world for 40 years on the legal side. So legal, banking, finance. Those are people that you want to have around you because their network. Supercedes yours. And when you’re in my industry, I can go and build the coolest technology. We can automate all of this. Who cares if you do not have the trust? And I’m 35, so. I have some trust, but I have a lot of more earning of trust to get to your mentors and advisors and the people that are closest to you have the trust of their network and circle that are either going to be your first investors or they’re going to be your first customers. So I advise everyone to find people around them that are. 15 years minimum, but really 20 years older than them to be on their team of advisors and mentors.

Lee Kantor: [00:24:49] So what’s your superpower that gives you a competitive advantage?

Quest Moffat: [00:24:58] Call me to affirm the fun title of the digital mercenary. I can understand. I can understand very, very complex things from you can tell me A to Z and then Z to 100 and I can figure out the items in between. I never thought I would have to figure out how to set up and create a brokerage partnership, let alone all of the things that go into a brokerage and the legal regulation side of it. It’s not my industry, but I believe as being an entrepreneur, you have to be almost a master of none but be able to read something in about 5 to 15 minutes and be able to jump into that conversation with the professionals to learn more. I would say that probably comes from my cybersecurity background. My self taught my way into coding. I just love to learn. So my superpower is just being curious. I think that’s what every person in the investor space wants to see is. I know when to stop at the end of the rabbit hole and back out. But I know how to be curious enough to venture into it. And I believe that’s the downside of a lot of entrepreneurs. Curious enough.

Lee Kantor: [00:26:17] And what do you need more of? How can we help?

Quest Moffat: [00:26:21] Right now I am seeking to find. That. That that special person to be a part of our company that happens to have some of these licenses that we’re looking to get connected deeper into the financial advisor and wealth advisor market. To start making those connections so we can easily navigate. We know we are doing something in a dual sided marketplace, but now that we have built out the customer segment side, this world does operate off of strategic partnerships. So that’s my ask, is to get deeply into that side.

Lee Kantor: [00:27:01] So what is if somebody wants to learn more? What’s the coordinates for? Dojo.

Quest Moffat: [00:27:07] Then go to Codelco. That’s a dogo loco. We are codelco gives on all networks. So we’re on LinkedIn, Facebook and Instagram. We suggest our website as the best place to go to learn any of the information of how to get involved and look forward to speaking with anyone and everyone.

Lee Kantor: [00:27:33] All right. Well, Quest, thank you so much for sharing your story. You’re doing important work, and we appreciate you.

Quest Moffat: [00:27:38] Thank you. And thanks for knowing a little bit about donor advised funds. It’s always exciting to talk to someone else who understands the game.

Lee Kantor: [00:27:44] All right. This is Lee Kantor. We’ll see you next time on Startup Showdown.

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