Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

A PayPal for politics

A startup helps political fundraisers get their online acts together.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)


(Fortune Small Business) -- When Rep. Joe Wilson of South Carolina made his infamous "You lie!" outburst during the president's healthcare address to Congress in September, he wasn't the only one stepping into the spotlight. The next day, an Austin startup called Piryx set up a Web site to facilitate donations to Wilson.

The resulting flood of attention garnered Wilson more than $1 million in donations, matching the amount raised by his opponent. It also inspired a malicious hacker attack on Piryx's servers that disabled them for several hours. "We couldn't have asked for better publicity," chuckles CEO Tom Serres, 27.

Nonpartisan Piryx serves candidates running for everything from local judge to U.S. senator, along with political action committees of every stripe. The Piryx platform features a Quicken-style app that tracks donations and reports them to the Federal Elections Commission -- meaning, in effect, that anyone can use it to run for office. Piryx also offers a system similar to eBay's (EBAY, Fortune 500) PayPal that allows donors to send money directly to a campaign's account, and simple tools for setting up Web pages and Facebook groups around campaign issues.

Serres estimates that some 2 million political events, including campaigns and ballot initiatives, take place annually in the U.S., bringing in about $30 billion in contributions and government funding each year. He says Piryx will collect more than $1.5 million in 2009 from membership fees paid by campaigns and from the roughly 4% cut the startup takes from contributions.

Piryx is also tapping the nonprofit and small business markets. Around the time of its September 2009 launch, Piryx partnered with singer Jon Bon Jovi to help his poverty-fighting Soul Foundation connect with donors.

But the political arena seems to offer Piryx its biggest growth opportunity -- especially in the age of President Obama, whose campaign proved the value of a strong online organization.

"The Piryx tools make politics more accessible," says Mark McKinnon, a veteran political consultant who ran the 2000 and 2004 national advertising campaigns for President George W. Bush. "It flattens the competition among candidates, so people with less money can get their ideas in front of voters."

Piryx's early scores -- such as the $20,000 it made in the first month of hosting Wilson's site -- have convinced the company's chief that his timing is right. "If I'd launched four years ago, we would have failed," Serres says. "The political industry is going through what corporate America experienced in the 1990s - discovering the Internet's power."

His next job: beefing up security to make sure sites like Wilson's can't be hit again.  To top of page

To write a note to the editor about this article, click here.

QMy dream is to launch my own business someday. Now that it's time to choose a major, I'm debating if I should major in entrepreneurial studies or major in engineering to acquire a set of skills first. Is majoring in entrepreneurship a good choice? More
Get Answer
- Spate, Orange, Calif.
Toy Fair surfaces holograms, robotic animals, dolls for boys The Toy Industry Association's annual fair revealed countless tech-enabled toys -- and some fresh takes on old classics. More
Super Bowl bound? Things to do in Houston besides the big game If you're one of the thousands of fans are headed to Houston for the Super Bowl Sunday, here are five things to do when you're not at the stadium. More
Sneak peek at Super Bowl 51 ads The ghost of Spuds MacKenzie and an ad about immigration steal the show in the swell of upcoming Super Bowl ads. Advertisers are paying, on average, $5 million for 30-second spots during Sunday's game on Fox. But if you want to watch something other than commercials, the New England Patriots happen to be playing the Atlanta Falcons. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play