Founders First Completes Oversubscribed $12 Million First Close of Change Catalyst Fund II, Accelerating Institutional Investment in Small Business Growth

San Diego, April 21, 2026 — Founders First Capital Partners (FFCP or Founders First), a national mission-driven alternative lending institution, today announced the successful first close of its fund, Change Catalyst Fund II, LLC (CCF II), with $12 million raised and oversubscribed. FFCP is dedicated to providing innovative growth capital, including revenue-based financing and other non-dilutive flexible debt, to service-based businesses in underserved communities, paired with comprehensive advisory services to accelerate growth for enterprises often overlooked by asset-based debt and venture capital.

To date, FFCP has deployed over $20 million in growth capital, creating more than 200 quality jobs and generating over $40 million in projected wealth creation for communities. Its nonprofit affiliate, Founders First CDC, has provided growth accelerators and financing readiness programs to over 4,000 small businesses nationwide seeking to scale toward the mid-market.

CCF II marks a significant step for Founders First in attracting institutional capital, with participation from both existing and new investors. Anchor investors in the CCF II first close include the Surdna Foundation, Deutsche Bank Americas Foundation, Sunrise Banks, Tethered LLC, Marguerite Casey Foundation, Barra Foundation, and the Visions Fund of The Philadelphia Foundation. Reynders McVeigh Capital Management, which co-designed and helped FFCP launch the $16 million Change Catalyst Fund I, is also a significant early supporter. Additionally, more than a dozen foundations and family offices participated.

“Reaching the first close of CCF II reflects years of deliberate work—building a strong track record in CCF I, refining our equity-like growth capital model, and deepening partnerships with investors who share our mission of expanding economic mobility through small business growth,” said Kim Folsom, Founder, Chairwoman, and CEO of Founders First Capital Partners. “We are deeply grateful for the continued trust and support of our investors. Over the past decade, we have translated this strategy into measurable impact—helping small businesses stabilize, grow, and create quality jobs and wealth in their communities. This progress enables us to scale that impact even further, accelerating the capital and wraparound support needed for growth-minded businesses.”

“Surdna has been a proud partner of Founders First since its early days, and our investment in CCF II reflects our continued confidence in the team and its vision,” said Adam Connaker, Vice President of Investments at the Surdna Foundation. “By listening to entrepreneurs and continuously adapting its approach, the team has built a robust platform ready to scale, broadening access to capital for small growth businesses nationwide. As a first-loss investor, we aim to create conditions that attract more capital to accelerate this growth. We are very excited about the progress the team has made and the opportunity to take this work to greater scale.”

CCF II has a target size of $50 million and is expected to complete fundraising within the next 1 to 2 years. The fund is carefully designed to meet the diverse investment strategies of institutional investors, including financial institutions seeking Community Reinvestment Act (CRA) alignment, as well as corporations, foundation endowments, family offices, funds of funds, and their investment advisors. CCF II offers fixed-interest promissory notes, three different risk-return options, and quarterly distributions. Catalytic investors providing subordinated capital and a $5 million guarantee from the Community Investment Guarantee Pool (CIGP) help mitigate model risk, thereby attracting institutional capital.

“CIGP’s guarantee reflects our confidence in the Founders First model and its ability to attract institutional capital to address the scale of capital access challenges for underserved small businesses,” said Pravina Raghavan, CEO of Locus. “Catalytic guarantees are a powerful tool for addressing perceived risk and unlocking market-rate investors. CCF II provides flexible capital options for growth businesses, exactly the type of platform that the credit enhancement funds managed by Locus’s impact investing services team are designed to support.”

CCF II will invest in growing service-based businesses that typically have annual revenues between $1 million and $10 million, serve commercial and government clients, and have high potential to scale toward the mid-market. FFCP analysis shows there are approximately 1.5 million such businesses nationwide, representing a significant opportunity for quality job creation, wealth building, and U.S. economic growth. While CCF II operates nationally, the fund places particular emphasis on key “markets of excellence” when deploying capital, including California, Illinois, Minnesota, Pennsylvania, New Jersey, New York, and the Washington, D.C. metro area—markets where FFCP has established strong borrower pipelines and community partnerships. CCF II can also support investors’ local priorities in these regions and beyond.

“As Minnesota’s first community development financial institution (CDFI) and a B Corp bank, Sunrise Banks has worked for decades to ensure small businesses in the Twin Cities and underserved communities can access the capital they need to grow,” said Michael Morrell, Executive Vice President and Director of Strategic Lending at Sunrise Banks. “We have seen firsthand what Founders First has built, with a proven track record of responsible, non-dilutive lending to the businesses our region depends on. CCF II provides our institution with a meaningful way to extend that mission beyond our own balance sheet, and we are proud to participate.”

This launch comes at a critical time for small business financing. Effective June 1, 2025, the U.S. Small Business Administration (SBA), under SOP 50 10 8, prohibits the use of SBA 7(a) and 504 loans to refinance merchant cash advances (MCAs) and factoring debt, closing one of the few exit routes historically available for small businesses to escape high-cost short-term financing, often with annual interest rates ranging from 35% to over 100%. More than 50% of the service-based entrepreneurs FFCP serves turned to MCAs out of necessity after traditional lenders rejected them. This SBA rule change eliminates a critical lifeline, leaving entrepreneurs with fewer responsible options than ever. CCF II’s non-predatory, revenue-based financing model—with larger check sizes, flexible terms, and no equity dilution—is precisely the alternative these businesses need.

Since its launch, CCF II has already begun making investments, with one early growth investment going to TrakNProtect, a Chicago-area employee safety services company. “Building a mission-driven business as a woman of color has not been easy,” said Parminder Batra, Co-Founder and CEO of TrakNProtect. “We have proven our model, we have customers and pipeline—but through traditional channels we could not access the capital needed for the next stage. Founders First understands our business, believes in where we are headed, and structured financing that truly fits us. This partnership has been transformative.”

About Founders First Capital Partners: Founders First Capital Partners is a national mission-driven investment platform providing non-dilutive growth capital and advisory support to service-based small businesses with annual revenues between $500,000 and $10 million. Through its $50 million Change Catalyst Fund II, the organization provides structured private credit to growth-stage companies, while its regional capital activation experiences connect founders directly with capital providers and ecosystem partners. Founders First’s mission is to drive economic mobility and expand entrepreneurs’ access to growth capital to foster quality job creation and wealth building in underserved communities nationwide.View the latest market impact report to learn more。

Media Contact: Zach Komes, Associate Director of Capital Markets
Email: [email protected]
Phone: 858-264-4102