How CouchSurfing Got its Start, and Landed VC Millions Four entrepreneurs find more than pocket change in their couch.

In 1999, Casey Fenton scored a cheap ticket to Iceland, but needed a place to stay. He sent an e-mail to more than 1,500 students in Reykjavik asking for a place to crash--even on someone's couch. The result was a new network of friends who offered to show him the "real" Reykjavik. After spending a weekend immersed in the culture of the area, Fenton walked away with disdain for the typical sanitized tourist experience--and an idea for a new nonprofit.

He invited former colleagues Daniel Hoffer and Sebastien LeTuan from Fuxito Worldwide, a venture-backed international soccer website, and friend Leonardo Silveira to form CouchSurfing. The San Francisco-based organization was designed to provide a platform for people to connect all over the world, fostering more affordable travel, not to mention more immersive cultural experiences, by encouraging users to provide and benefit from free in-home lodging.

But sometimes the best-laid plans don't work out, even for enthusiastic tech guys like these. The company had operated as a nonprofit since 2003, but its application for a 501(c)(3) nonprofit status was denied earlier this year, since the organization didn't fit into any IRS categories, Hoffer says. The team then applied for B-corporation status, which offers advantages to companies that have socially responsible missions. But they also needed cash.