Founders First Capital Partners

San DiegoCA 
Size of fund:

Kim Folsom's first entrepreneurial venture was in 1996, when she founded SeminarSource, a provider of continuing education. She sold her sixth company, lead generation application Reel Qualified, in 2015. In the interim, says Folsom, when it comes to funding for women and people of color, "not a lot had changed."

In 2015, she started San Diego-based Founders First Capital Partners, an investment fund that differs substantially from most capital available to early entrepreneurs. Founders First is a revenue-based fund, which means that it loans money to entrepreneurs with a set cap on the return. Folsom is looking to invest up to a million dollars and get a 1.5 to 2x return over three to five years. She says this structure better aligns the interests of the entrepreneur and the investor. "With an equity fund, you’re trying to run the company and the equity investor can’t wait for you to exit," she says.

A revenue-based fund also lets Folsom move more quickly. She says she has $100 million in committed capital, and is currently operating out of her second fund. In 2020, she says, she expects to do 15 deals. "Equity-based funds might do two investments a year," she says.

Folsom focuses on underrepresented founders, which to her means women, ethnic minorities, LGBTQ founders, military veterans, and those from moderate-to-low income areas. She'll invest anywhere in the country, and has backed a number of manufacturing and services companies.

Before Folsom started her first company, she worked at other successful venture-backed companies. Most first-time founders don't get that experience, she says, so she's set up educational programs to get them up to speed. For larger companies, that means a four-day, in-person event; for others the seminars are a blend of online and off.

Her companies include Quality Interactions, which helps hospitals get staff licensed and trained; and technology consultants Clarinet Solutions.