SAN DIEGO, CA | February 25, 2021 – Founders First Capital Partners has announced the initial closing of a $9 million Series A financing round, spearheaded by The Rockefeller Foundation and the Surdna Foundation. This significant investment is set to fuel Founders First Capital Partners’ mission to support underfunded and underrepresented entrepreneurs across the United States. The Series A funding will accelerate the deployment of a substantial $100 million credit facility from Community Investment Management, aimed at providing growth capital to 400 businesses led by diverse founders. These founders include women, military veterans, LGBTQ+ individuals, and Black, Indigenous, and People of Color (BIPOC), who often face barriers in accessing traditional funding avenues.
This strategic financing round is designed not only to enable the scaling of these vital businesses but also to underscore the compelling value proposition inherent in backing minority-led small enterprises. Through this expansion, Founders First Capital Partners is poised to emerge as a leading national platform for revenue-based finance and advisory support, specifically tailored for underserved small businesses. Alongside The Rockefeller Foundation and the Surdna Foundation, the investor consortium includes the Kauffman Foundation through the Capital Access Lab Fund at ImpactAssets, LivingCities Blended Catalyst Fund, Spring Point Partners, The Impact Seat, and Lindmor Foundation, demonstrating broad support for this critical initiative.
Addressing the Critical Funding Gap for Diverse Founders
The COVID-19 pandemic has starkly illuminated the persistent and disproportionate financing challenges confronting minority-owned businesses. A critical juncture has been reached, exposing the urgent need to level the playing field in capital access for these businesses, which are essential drivers of economic growth within their communities. Founders First Capital Partners directly addresses this gap, recognizing that traditional funding networks often fall short in supporting these entrepreneurs.
Maria Kozloski, Senior Vice President of The Rockefeller Foundation’s Innovative Finance Initiative, emphasizes this urgency: “The pandemic has shed light on the long-standing financing issues that disproportionally impact minority-owned businesses. We have reached a critical inflection point exposing the urgency of leveling the capital access playing field for these businesses which are key engines of growth in their communities. The Foundation’s investment will support the expansion of Founders First and thereby funding of underserved entrepreneurs who for too long have lacked adequate access to traditional funding networks. Together, we will create high-quality jobs and increase wealth in underserved communities.”
Founders First Capital Partners: A Unique Growth Platform
Founders First Capital Partners offers a distinctive approach by combining financial investment with robust business acceleration support. Their model is specifically designed to empower small businesses led by diverse and disadvantaged owners, particularly those located in low-to-moderate income areas often excluded from the traditional funding ecosystems of Silicon Valley and New York City.
Kim Folsom, Founder and CEO of Founders First Capital Partners, expresses enthusiasm about the impact of this funding: “We are thrilled to have the support of global social impact leaders like The Rockefeller Foundation to advance the mission of Founders First. With this investment we can greatly increase our reach to diverse business owners who are poised for high growth but aren’t a fit for venture capital or have the assets to meet traditional lending requirements.”
Founders First Capital Partners’ program integrates an accelerator model, featuring a comprehensive educational curriculum and expert coaching, with direct revenue-based financing. This holistic approach equips small businesses with the tools and capital necessary for sustainable growth and scaling. Over the past five years, Founders First Capital Partners has supported over 400 companies, achieving impressive results, including an average revenue increase of 25% year-over-year for participating businesses. Notably, of the companies completing Founders First programs, 83% reported revenue growth within 12 months, and 53% experienced a revenue increase of 25% within just 6 months, demonstrating the program’s effectiveness.
Revenue-Based Financing: An Alternative Funding Solution
Even prior to the pandemic, minority-led small businesses faced significant underfunding, often lacking the qualifications for traditional bank loans and venture capital. Founders First Capital Partners addresses this systemic issue by offering revenue-based financing, an innovative financial instrument particularly well-suited for small businesses. This model requires entrepreneurs to repay a fixed percentage of their revenue up to a predetermined cap, offering a flexible and performance-aligned alternative to traditional debt or equity financing. Revenue-based financing is self-liquidating and allows business owners to retain full ownership, making it an attractive option for small business proprietors seeking growth without dilution.
Thomas Belazis, Principal on The Rockefeller Foundation’s Innovative Finance Initiative, highlights the disruptive potential of Founders First Capital Partners’ model: “Founders First is building an innovative platform that bridges a massive financing gap for US small businesses. We are excited to unlock the company’s potential to disrupt the capital access challenge facing millions of minority entrepreneurs.”
Shuaib Siddiqui, Director of Impact Investing at the Surdna Foundation, further emphasizes the broader impact of this investment: “Investing in businesses led by founders of color is one of the most effective ways to drive job and wealth creation and address long-standing racial inequities. We are proud to support Founders First Capital Partners to reach this important funding milestone and their work to bridge the financial and cultural funding gap for small businesses. We believe it’s an investment that will provide social and financial returns for years to come.”
This investment by The Rockefeller Foundation is channeled through its Zero Gap Fund, a vehicle created in partnership with the John D. and Catherine T. MacArthur Foundation through the Catalytic Capital Consortium (C3). The Zero Gap Fund is dedicated to directing private investment toward solving critical global challenges. Founders First Capital Partners’ mission aligns strongly with The Rockefeller Foundation’s commitment to supporting Black, brown, and Latinx businesses, dismantling barriers to capital and credit access, and providing essential guidance, training, networking, and financial assistance.
About Founders First Capital Partners
Founders First Capital Partners is dedicated to building a comprehensive ecosystem that empowers underrepresented founders to become leading job creators within their communities, offering premium wage opportunities. Through its proprietary platform, Founders First Capital Partners provides revenue-based funding and business acceleration support to service-based small businesses located outside of major capital markets. The focus is on businesses led by women, people of color, and military veterans, inclusive teams, and companies located in low-to-moderate income areas. Founders First Capital Partners’ business accelerator programs, learning platform, and growth methodologies are designed to transition these underserved service-based businesses into $5 million to $50 million recurring revenue, tech-enabled companies. This approach also provides fund limited partners (LPs) with high-yield investments that perform with bond-like stability while generating equity-level returns. Founders First Capital Partners engages with hundreds of entrepreneurs annually through its Founders Business Growth Bootcamp and FastPath Funding Growth Experience programs. https://foundersfirstcapitalpartners.com/
About The Rockefeller Foundation
The Rockefeller Foundation is committed to advancing the frontiers of science, data, and innovation to address global challenges related to health, food, power, and economic mobility. As a science-driven philanthropic organization, The Rockefeller Foundation fosters collaborative relationships with partners and grantees to inspire and drive large-scale human impact. The foundation’s mission is to promote the well-being of humanity worldwide by identifying and accelerating breakthrough solutions, ideas, and conversations. For further information, please visit rockefellerfoundation.org and follow The Rockefeller Foundation on Twitter @RockefellerFdn.
About the Surdna Foundation
The Surdna Foundation is dedicated to fostering just and sustainable communities throughout the United States. These communities are guided by social justice principles and characterized by healthy environments, robust local economies, and thriving cultures. For over five generations, the Surdna Foundation has been guided by descendants of John Andrus, maintaining a tradition of innovative service to those in need. In 2017, the foundation reinforced its commitment to impact investing by launching a $100 million initiative to work in concert with its grantmaking activities. To learn more, visit www.surdna.org/impact-investing.
Media Contacts:
Founders First Capital Partners
Michelle Stansbury
+1 (619) 663-9704
[email protected]
The Rockefeller Foundation
Davina Dukuly
+1 (646) 465-0885
[email protected]
The Surdna Foundation
Elizabeth Cahill
+1 (973) 900-3897
[email protected]
