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Founders First Capital Partners mentioned it has raised $9 million to invest in underrepresented entrepreneurs and communities.
The cash for the San Diego, California-based fund for diverse founders comes from The Rockefeller Foundation and the Surdna Foundation. The series A funding will accelerate the deployment of Founders First’s $one hundred million credit facility from Community Investment Management to fund 400 organizations.
Diverse founders are defined as girls, military veterans, LGBTQ+, Black, Indigenous, and People of Color (BIPOC), and the fund delivers them more versatile development capital than regular bank debt. The funding will also permit Founders First to expand into new regions across the United States.
The cash will assistance organizations scale though demonstrating the worth proposition in supporting minority-led compact organizations. Through this expansion, Founders First will grow to be one of the country’s biggest income-based finance and advisory assistance investment platforms for underserved compact organizations.
In addition to The Rockefeller Foundation and the Surdna Foundation, investors incorporate Kauffman Foundation by way of the Capital Access Lab Fund at ImpactAssets, LivingCities Blended Catalyst Fund, Spring Point Partners, The Impact Seat, and the Lindmor Foundation.
Maria Kozloski, senior vice president of The Rockefeller Foundation’s Innovative Finance Initiative, mentioned in a statement that the pandemic has shed light on longstanding financing difficulties that disproportionally effect minority-owned organizations. She mentioned there’s an urgency when it comes to leveling the playing field for the capital that can be the engine of development for minority communities.
Of the more than 400 organizations that have gone by way of the Founders First applications, 83% reported enhanced revenues in 12 months and 53% reported enhanced revenues by 25% in 6 months. Kim Folsom, CEO of Founders First Capital Partners, mentioned in a statement that the investment will drastically enhance the fund’s attain to diverse enterprise owners who require cash for development but normally do not get access to venture capital.
Founders First focuses on assisting compact organizations led by diverse and disadvantaged enterprise owners situated in low- to moderate-earnings places much less connected to the regular funding networks of Silicon Valley and New York City. The firm combines an accelerator model—which consists of educational curriculum and specialist coaching —alongside direct funding to allow compact organizations to develop and scale.
BIPOC-owned compact organizations had been hit hardest by the COVID-19 pandemic, facing systemic barriers to accessing essential security net assistance, the firm mentioned. Black-owned organizations closed at almost twice the price as firms general at the onset of the pandemic, according to a current report by the Federal Reserve Bank of New York.
This funding is element of The Rockefeller Foundation’s Zero Gap Fund. Launched in partnership with the John D. and Catherine T. MacArthur Foundation by way of the Catalytic Capital Consortium (C3), the Zero Gap Fund is a car to channel private investment toward addressing the world’s most pressing challenges.