Founders First Capital Partners founder, chair and CEO Kim Folsom has always worked hard to shatter glass ceilings and overcome roadblocks in her career as a Black woman.
“I’m from a generation where women had three options – you were a teacher accountant or a nurse,” she said.
But rather than acquiescing to norms, Folsom forged her own career path. With encouragement from her father—an engineer and Navy vet who served in Vietnam — she studied accounting at and competed to get into the SDSU’s information systems program and graduated with degrees in both.
Her accounting and technical degrees led her to jobs in financial technology banking systems, like ATMs. But, again, she hit roadblocks to overcome.
“I thought the first corporation I worked for I would have the chance to run it,” she said. “And then I learned that’s not the case so I had to learn as much as I can to start my own company.”
Folsom started her first company, Seminar Source, in the late 1990s dotcom era. The company was “a kind of B2B Netflix” that allowed professionals, specifically physicians, to get continuing education through videos of conferences and seminars.
Seminar Source took eight years to launch, and Folsom said she didn’t raise any money until after the company had $1 million in revenue and was already profitable. She eventually raised over $20 million in venture – and her success did not go unnoticed.
“Many of my investors said you should consider being on the other side of the table to help diverse founders with funding their businesses,” Folsom said, adding that was the “seed” to fund other founders but at the time she felt she wasn’t ready. “But over six companies and 25 years, I did not see a whole lot of change. Like my experience in school when I was a software engineer, I was the only one that had been doing things and thought I would like to change that because I had experience to do it.”
Growing Diverse Businesses
Folsom launched Founders First in 2015 with the mission of funding and growing businesses led by diverse founders. The fund focuses on growing small and mid-sized companies “so they can be the best employers and job creators and create wealth for the founders their community,” Folsom said, adding that the goal is to grow these smaller companies three to five times once Founders First starts working with them.
“We do the hard work with some of the tiny companies most people don’t want to do the work for,” she said. “We say that while everybody focuses on unicorns, we focus on their cousins the zebras and the Clydesdales.”
The zebras and Clydesdales Founders First works with are companies that are already generating revenue of $50,000 up to $5 million, but need know how, access to capital and connections to hit that three to five times target. “And they need somebody to advocate for them all the time,” Folsom said.
The need for funding is especially important for many of these companies because the founders often lack the usual friends and family round of seed capital to get started and most programs that help fund diverse founder companies only supply capital in the three or four figure range.
“Most programs that are targeted to diverse founders are providing so little and mostly no capital it’s difficult for them to address the problem — which is growing revenues, profits, jobs,” Folsom said.
A Model of Success
Since its founding, Founders First has funded 550 companies nationwide and has committed $135 million in capital to diverse founders.
“Over 70% of our companies grow over 25% year-over-year,” Folsom said. “Many of them grow by going from transitional to recurring revenue and they add additional revenue streams. And that’s what we really focus on — teaching them how their business can be much more sustainable so that they can sustain themselves and then hire more people, too.”
Locally, Founders First has helped grow San Diego companies like Klarinet Solutions, an IT services company that specializes in improving productivity of companies with remote workforces, to four times its size. With help from Founders First, Elaine Swan grew her business etiquette company to now having over 25 franchises. And Carter Transportation Group is becoming one of the largest minority-owned companies in the country, serving clients like WalMart and FedEx.
“Founders First has really been of crucial value to where our company is today,” said Carter Transportation Group CEO and founder Robert Carter.
Carter described Founders First’s FastPath program in operations, communication, finance and simulation exercises as key to helping his company’s growth which now includes a Midwest regional office in addition to the corporate headquarters in San Diego.
“Additionally, the capital that we have access to through Founders First has been essential for a minority business like ours where access to traditional capital sources are mostly not available,” Carter added. “Founders First has also brought value to our business by providing access to other sources of funding that have help our business expand. I am extremely grateful to Kim and her entire team; they are making a difference for minority small businesses like mine who want to grow.”
Founders First Capital Partners
CEO: Kim Folsom
Location: Sorrento Valley
Companies Funded: 550
Committed Capital: $135 million
Notable: CEO Kim Folsom’s fist exposure to finance was lending money she made working in her school kitchen to her brother, who paid her back with interest.