Founders First Announces $12M Oversubscribed First Close for Change Catalyst Fund II, Accelerating Institutional-Scale Investment in Small Business Growth

April 21, 2026 - SAN DIEGO, CA – 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 4,000 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 the Surdna Foundation, Deutsche Bank Americas Foundation, Sunrise Banks, Tethered LLC, Marguerite Casey Foundation, The Barra Foundation, and The Visions Fund at The Philadelphia Foundation. Reynders McVeigh Capital Management, which co-designed and helped launch FFCP's $16M Change Catalyst Fund I, was also a key early backer. 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,” said Kim Folsom, Founder, Chairperson, and CEO of Founders First Capital Partners. “We are deeply grateful to our investors for their continued trust and partnership. Over the past ten years, we’ve translated this strategy into measurable impact—helping small businesses stabilize, grow, and create quality jobs and wealth in their communities. This progress positions us to expand that impact at a greater scale, accelerating access to the capital and wraparound support that growth-minded businesses need to thrive.”

"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," said Adam Connaker, Vice President of Investments, Surdna Foundation. "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. As a first-loss investor, we’re looking to create the conditions for additional capital to come in and accelerate that growth. We’re incredibly excited about the progress the team has made and the opportunity ahead to take this work to scale."

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.

“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," said Pravina Raghavan, CEO, Locus. "Catalytic guarantees are a powerful tool for addressing perceived risk and unlocking market-rate investors. CCF II, with its flexible capital offerings for growing businesses, is exactly the kind of platform the credit enhancement funds managed by Locus' Impact Investment Services team were designed to support."

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, posing a significant opportunity for quality jobs, wealth building, and the growth of the U.S. economy. While CCF II operates nationally, the fund is deploying capital with particular emphasis on key “regions of excellence” 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’ place-based priorities in these regions and more.

”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," said Michael Morrell, Executive Vice President and Director of Strategic Lending, Sunrise Banks. "We have seen firsthand what Founders First has built with a proven track record of responsible, non-dilutive lending to exactly the businesses our region depends on. CCF II gives our institution a meaningful way to extend that mission beyond our own balance sheet, and we are proud to be part of it.”

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. This SBA rule change eliminates a critical lifeline and leaves entrepreneurs with fewer responsible options than ever. 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 and one early growth investment is in TrakNProtect, an employee safety services company based in the Chicago region. "Growing a mission-driven company as a woman of color is not a straight line," said Parminder Batra, Co-Founder and CEO of TraknProtect. "We had proven our model, we had the customers, and we had the pipeline - but the capital we needed to get to the next level was not available to us through conventional channels. Founders First understood our business, believed in where we were headed, and structured financing that actually worked for us. That kind of partnership changes everything."