A new fund that invests in diverse and underrepresented founders has plans to invest $5 million in the Chicago area to help small businesses increase revenue, hire more employees and grow towards profitability.
Last year Founders First Capital Partners announced it raised a $100 million fund to invest in underserved and underrepresented entrepreneurs, including minorities, military veterans and women founders. Last month, the firm announced it would invest $5 million specifically in Chicago businesses.
Founders First raised the $100 million debt fund late last year, providing non-dilutive, revenue-based financing to businesses. The firm says it typically targets companies that generate between $1 million and $5 million in annual revenue. Its average check size is $250,000, but it can also provide up to $1 million in follow-on funding, CEO Kim Folsom said in an interview.
Folsom, a San Diego-based serial entrepreneur now on her seventh venture, said she knows first-hand the challenges that founders of color face when fundraising, and wants her fund to be a source of capital to help founders grow sustainable, profitable companies.
The fund is allocating investments in specific cities, and has offices in San Diego, Dallas and Austin. It plans to launch a physical office in Chicago in the coming months.
"[Chicago's] such a great place for diverse, founder-led businesses," she said.
Its first Chicago investment was in OnShore Technology Group, an engineering, IT and marketing services company.
“OnShore is currently experiencing a growth trajectory as we continue to deliver innovations that power computer systems validation and software assurance for life sciences companies across the globe," Valarie King-Bailey, CEO of OnShore, said in a statement. "We are excited and honored by the commitment to our mission from Founders First Capital Partners and will use this strategic investment to fuel our continued growth and innovation.”
