San Diego-based Founders First Capital Partners said it has closed a $9 million Series A financing round led by the Rockefeller Foundation and the Surdna Foundation.
In addition to the Rockefeller Foundation and the Surdna Foundation, other investors include Kauffman Foundation, Living Cities’ Blended Catalyst Fund, Spring Point Partners, The Impact Seat and Lindmor Foundation.
The series A funding will accelerate the deployment of Founders First’s $100 million credit facility from Community Investment Management to fund 400 companies.
“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,” Kim Folsom, founder and CEO of Founders First Capital Partners.
Folsom said that with the funding they will be able to provide capital more flexible than traditional bank borrowing, adding that the investment will also enable national expansion of its program.
Helping Diverse Founders
Founded in 2015, Founders First focuses on helping small businesses led by diverse and disadvantaged business owners located in low- to moderate-income areas that are less connected to the traditional funding networks of Silicon Valley and New York City.
The company combines an accelerator model that includes an educational curriculum and expert coaching alongside direct funding.
To date, Founders First has backed more than 500 service businesses. Roughly 83% reported increased revenues in 12 months, and 53% increased revenues by 25% in six months, according to the firm, which has operated the fund over the past five years.
Minority-owned small businesses were hit hardest by the COVID-19 pandemic, and Black-owned businesses closed at nearly twice the rate as firms overall at the onset of the pandemic, according to a recent report by the Federal Reserve Bank of New York.
“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,” Maria Kozloski, senior vice president of Innovative Finance of the Rockefeller Foundation.