In March 2021, Founders First Capital Partners announced its initial close for a $9 million Series A financing. The Surdna and Rockefeller foundations backed the initial round of financing. This week, we are thrilled to share that Founders First was oversubscribed, closing at $11 million.
Founders First Closes Oversubscribed Series A Funding with Investments from Top Impact Philanthropic Organizations in America
The company has raised $11 million in Series A to accelerate financing and advisory support for diverse-led small businesses
SAN DIEGO, CA | Nov. 9, 2021 – Founders First Capital Partners (Founders First), the nation’s leading revenue-based finance and advisory investment platform for underserved and diverse-led small businesses, today announced it has closed a $11 million Series A financing round. This funding was significantly oversubscribed and enables Founders First to continue leveling the playing field for diverse-led small businesses by accelerating its deployment of a $100 million credit facility from Community Investment Management. Since the initial Series A funding round in February 2021, W.K. Kellogg Foundation, Pivotal Ventures, a Melinda French Gates company, the Schultz Family Foundation, and Arc Chicago, LLC have joined on as investors. Arc Chicago, LLC is a fund created by the John D. and Catherine T. MacArthur Foundation to implement its Benefit Chicago collaboration with Chicago Community Trust and Calvert Impact Capital.
“We are thrilled to welcome such world-renowned social impact institutions as partners in supporting the exceptional entrepreneurs and businesses that drive opportunity within their communities and across the nation,” said Kim Folsom, Founder, Chairperson and CEO of Founders First. “Working together, we are building an inclusive economy to unlock significant social and financial returns, and we are also demonstrating the value proposition of supporting diverse-led small companies.”
Founders First helps support small businesses led by women, people of color, LGBTQ+, military veterans and companies in low to moderate income areas by offering acceleration services and revenue-based funding (RBF). This funding is more flexible than traditional bank debt, allowing for payments to vary based on monthly revenue, and it helps minimize the use of merchant cash advances (MCA) that can leave businesses with annual rates in the triple digits.
Founders First’s innovative performance platform provides structured growth education, coaching, financial health and post-funding advisory, along with operating and execution support, to position diverse-led companies for premium-wage job creation. Of the more than 400 companies that have gone through Founders First programs, 71% reported increased revenues in 12 months and 65% reported revenue increases of 25% in six months.
“The W.K. Kellogg Foundation’s commitment to racial equity and economic opportunity is fully aligned with Founders First’s powerful model of investing in small businesses that historically have not had equitable access to capital, including those led by women and people of color,” said Carla Thompson Peyton, VP of Program Strategy at The W.K. Kellogg Foundation. “We are excited about how Founders First is reframing risk and aligning incentives with its innovative revenue-based financing that enables entrepreneurs to retain equity ownership and build wealth in communities of color.”
Founders First’s typical borrowers are businesses that generate $500,000 to $5 million in annual revenues, with the potential to grow above $10 million. Three companies that have received support and funding from Founders First have been named to the 2021 Inc 5000 list, the publication’s annual recognition of the 5,000 fastest-growing private companies in the United States. The three companies, Blu Digital Group, JLM Strategic Talent Partners and OnShore Technology Group, are women led — two by Black women and one by a LatinX and LGBTQ+ leader.
“At the heart of our work, at Pivotal Ventures, is the belief that every individual should have an equal opportunity to improve their life and the lives of others,” said Erin Harkless Moore, Investment Director at Pivotal Ventures, a Melinda French Gates company. “Founders First exemplifies this principle with its mission to advance opportunities for women and families of color by jump-starting financial support for diverse-led businesses, and also with its own founder, a woman of color who has now launched seven successful companies.”
Founders First’s expert team of entrepreneurs and investors brings to the company more than 60 years of experience in coaching, financing and growing small businesses. Kim Folsom, the company’s founder, has launched and grown six technology businesses and exited three of them successfully. She has raised over $145 million in total committed capital.
“BIPOC and other diverse-owned businesses are crucial vehicles for generating wealth, creating jobs and increasing equity in communities that have historically been excluded from equal access to opportunity through no fault of their own,” said Tyra Mariani, President of the Schultz Family Foundation. “We are proud to be investing in these high-growth businesses through Founders First and believe doing so will help forge a more inclusive economy, reduce the wealth and employment gaps, and strengthen our democracy.”
“Supporting the success of entrepreneurs of color and small businesses in underserved communities through Founders First’s innovative, revenue-based financing approach presents a powerful opportunity to fight racial injustice and build a more equitable future in Chicago and beyond,” said John Balbach, Director, Impact Investments at the MacArthur Foundation.
Extending its inclusivity efforts, Founders First will be releasing an Inclusive Economy Market Report at the end of this month. To learn more about Founders First and to stay updated on its finance and advisory initiatives, please visit: https://foundersfirstcapitalpartners.com/press/
About Founders First Capital Partners
Founders First Capital Partners is building a comprehensive ecosystem through its proprietary platform to empower underrepresented founders to become leading premium wage job creators within their communities. We provide revenue-based funding and business acceleration support to service-based small businesses located outside of major capital markets such as Silicon Valley and New York City. We focus on supporting businesses led by women, people of color, and military veterans, inclusive teams, and businesses located in low- to moderate-income areas. Our proprietary business accelerator programs, learning platform, and growth methodologies transition these underserved service-based businesses into $5M to $50M recurring revenue, tech-enabled companies while providing high-yield investments for fund limited partners (LPs) that perform like bonds but generate returns on par with equity investments. Each year, Founders First Capital Partners works with hundreds of entrepreneurs and offers 3 cohort programs through our Founders Business Growth Bootcamp and 4 cohorts through our FastPath Funding Growth Experience program.
About the W.K. Kellogg Foundation
The W.K. Kellogg Foundation (WKKF), founded in 1930 as an independent, private foundation by breakfast cereal innovator and entrepreneur Will Keith Kellogg, is among the largest philanthropic foundations in the United States. Guided by the belief that all children should have an equal opportunity to thrive, WKKF works with communities to create conditions for vulnerable children so they can realize their full potential in school, work and life.
The Kellogg Foundation is based in Battle Creek, Michigan, and works throughout the United States and internationally, as well as with sovereign tribes. Special attention is paid to priority places where there are high concentrations of poverty and where children face significant barriers to success. WKKF priority places in the U.S. are in Michigan, Mississippi, New Mexico and New Orleans; and internationally, are in Mexico and Haiti. For more information, visit www.wkkf.org.
About the Schultz Family Foundation
The Schultz Family Foundation, established in 1996 by Sheri and Howard Schultz, former CEO and chairman emeritus of Starbucks, creates pathways of opportunity for populations facing barriers to success, focusing on youth transitioning to adulthood and marginalized populations, including Black, Indigenous, People of Color communities. By investing in scalable solutions and partnerships in communities across the country, the Foundation aims to help tackle the barriers and roadblocks that prevent individuals from reaching their full potential and, in doing so, strengthen our communities and our nation. Learn more at www.schultzfamilyfoundation.org.
About Benefit Chicago and Arc Chicago, LLC
Launched in 2016, Benefit Chicago is a collaboration between the John D. and Catherine T. MacArthur Foundation, The Chicago Community Trust, and Calvert Impact Capital. It seeks to mobilize $100 million in catalytic capital for nonprofits and social enterprises in Chicago. The goal of this impact investment effort is to create jobs, build wealth, and tackle other social and economic challenges, with a special focus on communities of color, low-income households, and historically marginalized communities. Arc Chicago, LLC, is an investment fund created by MacArthur to further the objectives of Benefit Chicago.
CSG for Founders First