FundBlackFounders

FundBlackFounders is a fintech SaaS platform that merges the concepts of crowdfunding and a Community Development Financial Institution (CDFI) to support early-stage Black-owned businesses and nonprofits. 

It works in two key stages: crowdfunding and funding match, followed by further financial support based on a character-based underwriting model. 

In the first stage, we utilize a crowdfunding approach where founders are invited to raise funds on our platform after they have completed on-demand training courses and demonstrated an engaged crowd/customer demand. The training program is designed to educate founders about customer acquisition strategies, financial management, marketing, and more. Our technology allows us to track and analyze data from these campaigns, ensuring we can assess the engagement level of the founders' crowd and the potential viability of their business ideas.

Once a campaign is fully funded, our platform then activates a matching process using philanthropy dollars from high net worth individuals and foundations. This means that for every dollar raised by the entrepreneur, we provide a matching grant, effectively doubling the founder's initial capital. 

In the second stage, after the successful completion of the crowdfunding and matching process, we continue tracking the founder’s progress and success. Using this data, we feed our proprietary character-based underwriting model, which is designed to identify founders who are ready for credit or debt capital. The data we gather looks beyond traditional credit scoring methods and instead focuses on character traits, business acumen, and demonstrated commitment and resilience.

FundBlackFounders utilizes a robust suite of technology to power our innovative solution. At the core is a SaaS platform that melds crowdfunding and elements of a Community Development Financial Institution (CDFI). Our technology infrastructure not only manages our crowdfunding service but also operationalizes our unique character-based underwriting model.

Our crowdfunding technology facilitates the creation, management, and completion of fundraising campaigns, enabling secure and efficient exchange of information and funds. It provides comprehensive analytics to assess campaign engagement and track progress.

The truly transformative aspect of our technology lies in our proprietary character-based underwriting model. By leveraging advanced data analytics and AI algorithms, we gauge the readiness of founders to receive further credit or debt capital. This model takes data from the crowdfunding stage, as well as data from founders' marketing and accounting tech stacks, to generate a holistic picture of a founder's readiness. This approach allows us to broaden the funding criteria, leading to a more equitable distribution of funds.

Our platform also serves as an e-learning hub, delivering on-demand training programs that use interactive tools and multimedia content to enrich the learning experience for founders.

All of this is wrapped up in a user-friendly, web-based interface accessible from any internet-enabled device. Our technology solution is underpinned by human-centered design, ensuring that our services are accessible and easy to use for a wide range of founders.

In essence, FundBlackFounders harnesses crowdfunding software, advanced data analytics, AI algorithms, and e-learning technologies to revolutionize funding for early-stage Black-owned businesses and nonprofits. By integrating data from various sources, we are set to redefine what it means to be 'ready' for funding, making the dream of owning a successful business a reality for more founders.

FundBlackFounders primarily serves early-stage Black entrepreneurs, a demographic historically underserved by traditional financial institutions. These individuals span all ages, genders, and income levels, and are united by a shared challenge: inadequate access to startup capital.

In the face of systemic hurdles, Black entrepreneurs often struggle to secure initial "friends and family" funding, a crucial stepping stone in most businesses' journey. Access to traditional credit can also be challenging due to systemic biases in traditional underwriting processes. By addressing these issues, FundBlackFounders contributes to generational wealth building within the Black community, often hindered by these financial barriers.

We've devised a solution specifically targeting these challenges. Our platform offers a space for Black entrepreneurs to raise funds, gain vital business skills, and possibly access further credit based on a more equitable, character-based underwriting model.

We have undertaken an intensive hands-on learning process to understand the unique needs of our audience. We've launched beta pilots, involving our customers in real-time product design and refinement, which has proved invaluable in shaping our services. Additionally, we maintain constant dialogue with our community through regular feedback sessions, user experience tests, and partnerships with organizations serving Black entrepreneurs. 

Our solution profoundly impacts the lives of Black entrepreneurs by making business ownership more attainable and thereby facilitating pathways to generational wealth. By providing access to crowdfunding, match funding, and education, we empower these entrepreneurs to launch and grow their businesses, stimulating economic growth in the broader Black community.

FundBlackFounders' mission and our technology-enabled solution align directly with the challenge, particularly targeting 'Financial Readiness' and 'Business Development & Procurement'.

The problem we address is the persistent disparity in financial readiness and funding access for Black-owned businesses. Many Black entrepreneurs face systemic biases, making securing initial "friends and family" funding and obtaining credit/loans difficult.

FundBlackFounders combines crowdfunding with a Community Development Financial Institution model, creating an accessible funding pathway. Founders raise funds on our platform, we match the amount, and we provide additional financial support based on our unique underwriting model. This model prioritizes character traits, business acumen, demonstrated customer demand, and founder resilience.

Our solution includes an education pillar focusing on building social capital. Through our 'Engage 10 People Per Day' system, founders expand their networks and build relationships with potential customers, champions, partners, and funders. This system has proven effective, with founders securing angel investment, board members, and corporate partners, leading to transformative business opportunities.

We serve Black entrepreneurs, traditionally underserved by financial institutions. Our solution aids in overcoming immediate financial hurdles and fosters pathways to generational wealth, improving both financial readiness and business development capacities.

Our innovative approach, designed to address the financial readiness and business development challenges faced by small business owners, is transforming their ability to conduct business, contributing to long-term growth and sustainability in the broader Black community.

FundBlackFounders' theory of change is rooted in direct and meaningful activities:

Activities: We employ a multi-faceted approach that includes crowdfunding, a matching funding model, character-based underwriting, and comprehensive training courses focused on crucial business skills and network expansion.

Immediate Outputs: With our platform, founders not only secure initial capital for their businesses but also gain invaluable knowledge and a strong network. This is made possible by our matching grants which effectively double the funds they raise.

Outcomes: With funding and newly enhanced skills, our founders are better equipped to scale their ventures and increase their creditworthiness, leading to more opportunities for future financial support.

Impact: Our solution aids in creating a thriving ecosystem of Black-owned businesses, fostering economic equality and contributing to generational wealth within the Black community.

Our evidence supporting this theory of change is derived from our beta platform's results. We've already funded over 151 founders with more than $4.4 million in funding. These founders have then gone on to successfully secure angel investment, win multiple grants, establish partnerships with top corporations, gain acceptance into accelerators, and one has even been acquired by a major corporation/celeb.

Our matching funding model works like a grant system, and research* indicates significant benefits for startups receiving grants: they generate one new job per $9,000 received; with a $10,000 grant, they raise an additional $100,000; they have a 64% higher survival rate; and they show three times better success metrics. This further validates our approach and demonstrates its potential for significant societal impact.

*Link to research referenced above https://static.younoodle.com/s...

Our solution currently directly and meaningfully serves 165 founders. This number comprises 45 new founders we've onboarded in 2023 and 120 founders from previous years that we continue to serve.

Looking forward to next year, we anticipate serving a total of 1,665 founders - this includes our current 165 founders and an additional 1,500 new founders that we aim to onboard.

Projecting five years into the future, with a conservative growth rate of 20% per year, we anticipate serving approximately 6,000 founders directly. 

It's important to note that while these are the figures for the founders we directly impact, our overall founder community is much larger, consisting of over 10,000 founders. We're constantly improving our pilots and optimizing our resources with the goal of eventually scaling to serve all these 10,000 founders. 

Moreover, every time we open an application cycle, we receive an average of 2,000-4,000 applicants, indicating the high demand and potential for our solution to scale and serve an increasing number of founders in the future.

Our community includes Black entrepreneurs and various stakeholders who support these entrepreneurs. Key stakeholders are:

1. Black Entrepreneurs: We directly serve and draw insights from their experiences.
2. Foundations and Corporations: They provide financial support and partnership opportunities.
3. High Net Worth Individuals and Celebrities: They contribute visibility, resources, and influence.
4. Ecosystem Partners: They offer resources, guidance, and opportunities to our founders.
5. Government Officials and Community Members: We engage with them to influence policy-making and legislative action.
6. Banks: We collaborate with them to improve lending outcomes for our community.
7. Local Communities: Our founders are creating businesses in specific communities, like our Louisville, Kentucky customer cohort focused on underserved zip codes.

Together, we aim to empower Black founders and foster equity.

Trust-building is central to our work at FundBlackFounders. Our approach includes:

1. Word of Mouth: Founders and funders we've worked with often recommend us within their networks, creating trust through their endorsement.

2. Consistent Communication: Regular dialogue with our founders allows us to understand their needs and challenges.

3. Delivery on Promises: We strive to fulfill our commitments, instilling confidence and reliability.

4. Advocacy: We openly support our founders on both public and private platforms, reinforcing our commitment to their success.

These methods foster trust and build enduring relationships within our community.

Our impact goals are aligned with scalability and transformative change:

Current Year Goals:

1. Increase Founder Impact: Support 165 founders, assisting them in launching or scaling businesses.

2. Community Growth: Expand our founder community to over 12,000 members.

3. Systemic Change: Advocate for legislation that supports Black entrepreneurs.

Five-Year Goals:

1. Exponential Founder Impact: Aid over 10,000 founders directly through our initiatives.

2. Community Expansion: Projecting a founder community of over 50,000 individuals.

3. Deepened Systemic Change: Work towards policy and legislative change favoring Black entrepreneurs.

To achieve these, our plan is to:

1. Leverage Partnerships: Collaborate with corporations, foundations, and financial institutions for resources and opportunities.

2. Expand Outreach: Utilize digital marketing, community engagement, and networking to reach more Black founders/funders.

3. Enhance Platform: Continually refine our platform to better serve our founders.

4. Drive Advocacy: Advocate at all levels of government for an equitable entrepreneurial ecosystem.

5. Measure & Refine: Regularly assess our impact, learn, and refine our strategies for effectiveness and relevance.

We are applying to the Truist Foundation Inspire Awards because we share a mission of uplifting underrepresented entrepreneurs. As a fintech SAAS company focused on funding early-stage Black-owned small businesses and nonprofits, a partnership with Truist Foundation and MIT Solve would add immense value to our solution.

Our revenue-generating model, centered on crowdfunding, matching funds, educational initiatives, and CDFI loan products, is well in progress. Our CDFI product is not yet live, and we recognize that building a successful CDFI is challenging. Direct guidance and support from the experts associated with the Inspire Awards will help us address the normal challenges CDFIs face and ensure effective capital provision to those who need it the most.

The Inspire Awards offer us an opportunity to refine our training programs into scalable products, enabling us to reach more entrepreneurs and communities. Additionally, the Challenge will assist us in overcoming financial hurdles and refining our business model for long-term growth and sustainability.

Furthermore, the expertise that the Truist Foundation and MIT Solve can provide will enhance our fintech SAAS platform, making it more efficient and user-friendly, providing a comprehensive funding solution for early-stage Black-owned businesses.

Finally, our aspiration goes beyond this grant. We aim to develop a strong, long-term partnership with Truist, working together to close the funding gap and drive sustainable growth for Black entrepreneurs. Our collaboration with the Truist Foundation and MIT Solve would profoundly impact the communities we serve.

Our partnership goals with the Truist Foundation and MIT Solve encompass four key areas where we seek help for our mission. Firstly, in the realm of the Business Model, we need guidance to ensure a strong product-market fit and a well-defined strategy for our fintech SAAS platform. Secondly, in Financial Forecasting, expert insights will optimize revenue generation and financial stability, aiding us in attracting investors and securing sustainable funding. Thirdly, we require assistance in Legal or Regulatory Matters to ensure compliance, user protection, and risk mitigation. Fourthly, expertise in Monitoring & Evaluation will help us measure impact, refine programs, and improve services.

Additionally, we aim to leverage Truist Foundation and MIT Solve's expertise to build robust character-based underwriting metrics. This will enable us to assess early-stage Black-owned businesses and nonprofits fairly for funding eligibility, fostering equitable access to capital and sustainable growth.

Through this partnership, we envision transforming the funding ecosystem, uplifting underrepresented entrepreneurs, and creating a lasting impact on the communities we serve.