WHAT THEY DO: TipCow is a tipping application, available for Android, Apple's iOS and the web, that lets live entertainers receive digital tips from fans.
The company retains a percentage of each transaction, which it says covers credit card processing fees, server and hosting costs. For a $10 tip, it equates to 50 cents.
"Most people don't carry cash for tips anymore, and most bars don't pay musicians," said co-founder Rene De La Mora. "Our goal is to get as much money as we can for our artists."
HOW THEY DO IT: The TipCow app lets bands set up profiles that route to their PayPal or other digital wallet systems. Using the app, fans can tip bands electronically from their smartphones.
The app was initially targeted at bands performing live, but the company has discovered a new niche in livestreaming. That allows bands to perform from any location, such as their home or a recording studio, stream the performance, and receive tips from anywhere in the world.
Some artists have begun shooting live video on Facebook and including a tip jar.
WHO THEY ARE: Friends De La Mora and Chris Bush founded the company in 2014.
They got the idea when Bush, a software developer, attended a concert at a bar on Rainey Street where De La Mora was a talent booker. Bush wanted to tip the band but didn't have cash.
When he discovered there wasn't a good mobile app to let him tip, Bush told De La Mora they should build one.
INVESTMENT: The company is currently self-funded. (Both founders have kept their day jobs). They are currently working to raise $50,000 to $100,000 from investors to expand the app, including adding features for fans.
THE COMPETITIVE EDGE: De La Mora says he and Bush spent a year researching the market before building the app, which launched nationally during this year's South by Southwest festival.
"We learned what companies have done this, where they have succeeded and where did they fail," he said. "The place a lot of them seem to have fallen through was in building up trust with the artists and the fans."
Creating an online community with musicians and venues has been a major focus for TipCow, he said, and that has helped the company attract more bands.
BIGGEST CHALLENGE: TipCow is still figuring out its revenue model.
It plans to add advertising to the app, and possibly sell services to users.
It is also partnering with venues, including the White Horse and Empire in Austin, to hold events where people get free entrance when they download the app, and drink discounts if they show a tip redemption.