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

By Gwen Moran

Opinions expressed by Entrepreneur contributors are their own.

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.