Access to capital is one of the biggest hurdles for small businesses. Fundid founder and CEO Stefanie Sample recalls maxing out her personal credit card to purchase an expo booth for her first business, and when she saw similar things happening to friends, she knew she couldn’t just sit on the sidelines.
Sample started the business finance startup after more than a decade as a small business owner in Montana. While she admits her company didn’t face similar problems accessing capital because of real estate holdings related to her family’s franchise, she saw friends struggle to get capital from banks because they didn’t have similar property to leverage.
She was already working with a nonprofit group of women business owners, and the more she gathered feedback about the ease of accessing capital — 70% told her, “No, I’m not sure how to get funding” — the more she realized small businesses needed a more simplified way to get capital and business finance resources.
“We focus on business growth, and the moment they need capital is when they have a growth opportunity, bringing on a big client, for example, so they need to hire a new employee, but that comes with the initial costs of having a new employee, like buying a laptop,” Sample told TechCrunch. “We are able to provide just enough to smooth out their finances so they can say ‘yes’ to growth in that moment.”
Fundid is already working with over 16,000 businesses, mainly those with fewer than 10 employees, which Sample says make up 80% of the 31 million businesses in the U.S. The company provides three areas of support:
- Loans via Fundid Capital.
- Business building card. The company developed a proprietary underwriting model with Experian. This is launching in the summer, and Sample touts it as “the first business building card that extends credit to businesses with less than 10 employees and creates a clear path to business growth.” There are already more than 6,000 people on the waitlist.
- Business finance tools, including financial literacy and easier access to grants and programs available to small businesses. Last May, Fundid launched its grant-matching features that provides one access point for business owners to set criteria and be matched to grants to meet specific needs.
The addition of the credit card is one of the new features buoyed by the company’s first fund raise of $3.25 million in seed financing, led by Nevcaut Ventures. Joining in were The Artemis Fund (this is the second announcement they were involved in this week, including Upgrade) and Builders and Backers.
In addition to building the card product, Sample intends to use the new funding to acquire its first customers for the loans and card businesses — the majority of its customers are using the grant matching product — and onboarding new employees. Fundid itself has less than 10 full-time employees.
Meanwhile, though it was not her initial focus, Sample is finding Fundid’s approach is helping women and minority business owners, which often make up the majority of small business owners.
“We feel we have a unique angle for solving access to capital for businesses with 10 and under, and if we can do that, we can essentially solve for all marginalized founders with something that doesn’t make them feel marginalized,” she added.