Founders First Announces $12M Oversubscribed First Close for...

Founders First Capital Partners (FFCP/Founders First), a national mission-driven alternative credit firm, today launched its first close of $12M for Change Catalyst Fund II, LLC (CCF II). FFCP has pioneered innovative growth capital products including revenue-based financing and other non-dilutive flexible debt, combined with wraparound advisory services, to accelerate service-based businesses in underinvested communities, who are often overlooked by asset-based debt and venture capital.

The firm has deployed $20M in growth capital to date, creating more than 200 quality jobs and generating over $40M in projected wealth creation for communities. Its nonprofit affiliate, Founders First CDC, has provided growth accelerator and funding readiness programming to over 5,000 small businesses seeking to scale toward the mid-market across the country.

CCF II marks Founders First's growth towards attracting institutional capital, with new investors and existing investors re-committing. Anchor investors participating in CCF II's first close include:

A dozen other foundations and family offices are also participating.

"Reaching this first close of CCF II reflects years of deliberate work-building a strong track record with CCF I, refining our equity-like growth capital model, and deepening partnerships with investors who share our commitment to expanding economic mobility through small business growth."

Kim Folsom - Founder, Chairperson & CEO, Founders First Capital Partners

"Surdna has been a proud partner to Founders First since its earliest days, and our investment in CCF II reflects our continued belief in the team and their vision. By listening closely to entrepreneurs and continually refining their approach, the team has built a strong platform that's ready to scale and expand access to capital for small, growing businesses across the country."

Adam Connaker - Vice President of Investments, Surdna Foundation

CCF II, targeting $50M over the next 1-2 years, was intentionally designed to address the various investing strategies of institutional investors, including financial institutions seeking Community Reinvestment Act (CRA) alignment, as well as corporations, foundation endowments, family offices, fund of funds, and their investment advisors.

CCF II provides fixed-interest promissory notes, three different risk-return options, and quarterly distributions. Catalytic investors providing subordinated capital and a $5M guarantee from the Community Investment Guarantee Pool (CIGP) help de-risk the model to attract institutional capital.

CCF II will invest in growing service-based businesses, generally $1-10M in revenue with commercial and government customers, who have high potential to advance towards mid-market scale. FFCP analysis determines there are 1.5 million such businesses across the country. While operating nationally, the fund emphasizes key regions of excellence including California, Illinois, Minnesota, Pennsylvania, New Jersey, New York, and the Washington, D.C. metro area.

"CIGP's guarantee reflects our confidence in Founders First's model and its ability to attract the institutional capital needed to reach underserved small businesses at the scale of capital access challenges. Catalytic guarantees are a powerful tool for addressing perceived risk and unlocking market-rate investors."

Pravina Raghavan - CEO, Locus

"As Minnesota's first CDFI and B Corp bank, Sunrise Banks has spent decades working to ensure that small businesses in the Twin Cities and across underserved communities have access to the capital they need to grow. CCF II gives our institution a meaningful way to extend that mission beyond our own balance sheet."

Michael Morrell - EVP & Director of Strategic Lending, Sunrise Banks

The launch comes at a critical moment for small business financing. Effective June 1, 2025, the U.S. Small Business Administration, under SOP 50 10 8, now prohibits the use of SBA 7(a) and 504 loans to refinance merchant cash advance (MCA) and factoring debt - closing off what had historically been one of the only exit ramps for small businesses trapped in high-cost, short-term financing (often with APRs from 35-100%+).

Over 50% of the service-based entrepreneurs FFCP serves have turned to MCAs out of necessity when conventional lenders turned them away. CCF II's non-predatory, revenue-based financing model - with significant check sizes, flexible terms, and no equity dilution - is designed to be exactly the alternative these businesses need.

Since launch, CCF II has already started making investments. An early growth investment is in TrakNProtect, an employee safety services company based in the Chicago region.

Founders First Capital Partners is a national, mission-driven investment platform providing non-dilutive growth capital and advisory support to service-based small businesses generating $500K to $10M in annual revenue. Through its $50 million Change Catalyst Fund II, the firm delivers structured private credit to growth-stage companies, alongside its regional Capital Activation Experiences that connect founders directly with capital providers and ecosystem partners. Founders First's mission is to drive economic mobility, expanding access to growth capital for entrepreneurs to advance quality jobs and wealth creation in underinvested communities nationwide.