Nichole Montoya: “Nacho” Ordinary Payment System

Nichole Montoya and Molly DiCarlo at National PTA EventAccording to the Urban Dictionary, the go-to source for the definition of all terms hip and cool (or in our case, slang we hear our kids using) to “Cheddar Up” is “to gain money through legal or illegal means.” As in “Man, I gotta get my hustle on and cheddar-up.” No small irony then that two moms in Colorado, by way of the Iowa and Nebraska plains, should settle on Cheddar Up for the name of their venture, the latest and most innovative arrival to the stage of group payments.

“Every time she hears me explain that ‘cheddar’ is slang for money, my co-founder Molly can’t keep a straight face. There is just something about two moms, handing out cheese cubes and company flyers at a school carnival that doesn’t scream Jay-Z,” laughs Nichole Montoya.

Nichole Montoya
Nichole Montoya

After university, Montoya confesses she “fell into” professional consulting services, working for Accenture in Chicago for several years before moving to Denver to begin consulting in a senior marketing role at KPMG. “I wasn’t passionate about it, but it paid well and I was pretty good at it,” she explains almost guiltily.

Fast forward a few years and Montoya, working mother of two, was on the phone one day in 2012 with a friend discussing what to get the teacher for the end-of-year gift.

“I thought for a moment we should open it up to the whole class, but I’ve never been good at overcoming the awkwardness of collecting money that’s owed. I’ve been burned a lot by people committing and then not following up. So I suggested we just make the gift from our kids.”

When she got off the phone, Montoya realized she’d been opting out of coordinating gifts for teachers and coaches for some time now and wondered Cheddar Up Love Buttonwhy there wasn’t an easier way to manage that. Likewise, she was fed up with the constant check-writing and tracking down the right person collecting payments or stuffing checks in cubbyholes at school. If you have a kid at school or involved in extracurricular activities, you can most definitely relate.

“From there, I started thinking more broadly about solving the problem of collecting payments in all kinds of situations like buying concert tickets for a group, paying organizational dues, settling up on a night out with friends or even getting your siblings to repay you for the Mother’s Day gift you all went in on. And I thought, ‘Gosh, this seems like a pretty good problem to solve.’”

Molly DiCarlo
Molly DiCarlo

With the seed of an idea, Montoya reached out to her good friend Molly DiCarlo who was immediately on board. Both women were consulting by then and, although they had to deal with client commitments and deadlines, had more flexible schedules that allowed them to work on the business on the side.

The goal was to make something tedious and awkward – collecting money – fun and easy. The first exercise was finding the name, something “memorable, brandable and not boring.”  To the duo’s dismay [but luckily in our humble opinion], Settleup.com was already taken, so they started getting creative.

“Our beloved whiteboard was covered with words associated with money – slang, song lyrics, movie titles, you name it. Then came the list of random words that meant absolutely nothing, followed by my favorite, combining two words to form a nonsense word – Pinterest anyone?  We saved some time by skipping the –ly and –ify suffixes, because we didn’t want to be forever branded as a startup. In the end, I’ve got to give him credit, Cheddar Up was my husband’s suggestion.”

Step two was finding the right technical talent. “At first, we struggled to find a good fit, but I relied on my network and now we have a great team. Everyone has to have skin in the game, especially when you are self-funding.”

“Juggling this startup has required 100% of my time, but equally I’ve tried to focus on my girls and turn this experience into a positive for them. It’s flipped my life upside down and has been an adjustment for the family. So having a supportive partner at home has been essential. I was absolutely certain this would take off, it’s a no brainer. But I must confess it’s a lot more work than I ever imagined.”

Montoya and DiCarlo took a year to build the prototype to make sure it was robust when they launched the beta in fall 2013 with a local elementary school in Denver.

“That was a great way for us to get started. We got a lot of feedback and made serious revisions. We used Denver and Boulder as our playground to see what worked and what didn’t and it spread from there.”

After the beta test and the response they received, the pair quit their consulting jobs and started replicating their approach outside of Colorado. The Cheddar Upservice is constantly being updated to make it more usable and flexible. And while the tool is great for the payer, the real difference is felt by the collector.

“It’s like the Evite of online payments. Whoever sets up the ‘tab’ can drill down the details, track and schedule reminders, and add custom forms. We’ve had schools use it for collection of fees; it just gets rid of all the busywork, not to mention the paperwork,” Montoya explains. “Keeping the fees low is important because our biggest competitor is the status quo … people writing checks.”

Full disclosure here: We tested Cheddar Up for two end-of-school gifts and it was a piece of cake (or should we say cheese). While there may still be people who are uncomfortable with online payments, Cheddar Up definitely beats running around the school yard with that scrap of paper full of names waiting to be scratched out.

Cheddar Up PayerAfter 1.5 years of self-funding, Cheddar Up has raised $725k to date and is in the processing of raising more to finance growth – despite Montoya’s confession about having to overcome her introvert tendencies when finding investors. A subscription service will be launched in the fall and Montoya is focused on increasing the number of “Big Cheeses,” ambassadors that refer the service. The business also got a boost this spring when Montoya was invited to participate in 500Startups, the renowned tech accelerator in San Francisco.

“It was really difficult to be away from family for three months – talk about 10-gallon-sized-mommy-guilt. But I got access to an amazing network. It was entertaining, to say the least, being a 37-year-old mom among 20-something-year-old men all wearing hoodies, but they welcomed me with open arms.”

What has surprised Montoya most about the entrepreneurial life?

“Juggling this startup has required 100% of my time, but equally I’ve tried to focus on my girls and turn this experience into a positive for them. It’s flipped my life upside down and has been an adjustment for the family. So having a supportive partner at home has been essential. I was absolutely certain this would take off, it’s a no brainer. But I must confess it’s a lot more work than I ever imagined.”

Hard work, yes, but fulfilling and exciting, you Gouda believe it!

Tips from Nicole Montoya
  • There is no right way to go about starting your own business. It’s trial and error. Use your best judgment and move forward.
  • Working with a friend can be delicate. It’s really important to talk openly about finance and have agreements in place beforehand. I’m lucky because Molly and I are both very committed and are each other’s biggest fan, but it’s best to be prepared.
  • Everyday doubts creep into your head and there is tons of stress, but it’s so worth it if you can hang in there.

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