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For startup founders, accessing capital is increasingly difficult. Investments from venture capital are harder to come by, with a 35% decrease in 2023 from the previous year, and more than one third of VCs disappeared from dealmaking in 2023. Without venture capital, many founders seek out bank loans, but in 2023 there was a 21% decrease in new term loans. Founders who can secure bank loans grapple with the looming threat of high interest rates. (Sandra Velasquez from Nopalera; Image Source: Nopalera)
For underrepresented startup founders, access to capital is even more scarce. In a scientific study by Harvard, MIT, and Wharton, 70% of VC investors preferred pitches presented by male entrepreneurs over those by female entrepreneurs, even though the pitches were identical. Black and Latine founders received only 1% and 1.5%, respectively, of total U.S. venture capital funding in 2022, women-only teams have received 2.4% of VC funding over a 30-year average, and disabled entrepreneurs are 400x less likely to receive venture capital.
The reality is that only 1% of new businesses ever raise venture capital, and only 16% secure traditional bank financing. The Kauffman Foundation reported that nearly 65% of new businesses will use personal and/or family savings to cover their start-up costs. In response, SIS Omni is joining others in establishing a thriving ecosystem of alternative sources of capital such as small business grants, social impact bonds, catalytic capital, equity crowdfunding, and more. This is especially important for founders who face outsized barriers accessing traditional venture capital – those “underestimated” groups that receive less than ~3% of VC funding (women, people of color, disabled, rural, veterans, LGBTQ+, etc.).
For its part, SIS Omni has launched the ARC Fund to work with underestimated impact entrepreneurs as they launch equity crowdfunding “Community Rounds.” Founders who run crowdfunding campaigns with the ARC Fund receive three months of fundraising and consulting services, along with potential capital investments from SIS Omni and our partners who may serve as Lead Investors to accelerate the Community Round. By increasing the utilization of equity crowdfunding in the impact space, we're also democratizing investing – making it more accessible – so that friends, followers, customers, and more can invest as little as $100 in their favorite companies and founders.
Landscape Overview

In an economic climate marked by uncertainty and the shrinking availability of traditional venture capital funding, entrepreneurs are facing significant challenges in securing the capital necessary for growth.

However, alternative financing sources, such as equity crowdfunding, present opportunities to bridge this gap and promote a more inclusive startup ecosystem.

By embracing a diverse range of funding channels, we can foster an environment that supports and empowers underestimated impact entrepreneurs, addressing the pressing need for equitable access to capital. The ARC Fund is providing an answer to today’s funding challenges by building alliances with organizations and companies committed to fostering innovation and championing alternative funding solutions.

Access to capital has become even more critical for early-stage impact entrepreneurs:

  • In 2023, 70% of VC investments went to companies that were already in the growth or expansion stage, leaving early-stage startups, particularly social impact-oriented ones, struggling to attract capital.
  • While there has been a growing trend of impact investing in recent years, the pandemic and economic uncertainties have somewhat slowed down its momentum. In 2023, impact investing is expected to decrease by 10%, compared to its peak in 2021.

Equity crowdfunding, through platforms like Wefunder, offers a powerful solution to this issue. It democratizes investing and access to funding, allowing a diverse range of investors, including individuals who believe in the mission and vision of the entrepreneurs, to participate in their success. It fosters a sense of community engagement and financial inclusion that traditional venture capital often lacks.

  • Start-ups with female founders represent between 10% and 15% of all investor crowdfunded deals since 2020, and startups with founders of color represent between 10% and 28% of all investor crowdfunded deals since 2020.
  • When looking at equity crowdfunding success percentages, campaigns run by women-only founders had an 87.5% success rate compared to 41% for men-only founders. Minority-only founders also had a higher success rate (46%) than men-only founders.
Benefits of the Alliance
The ARC Fund offers a unique opportunity to fuel startup growth by supporting underestimated impact entrepreneurs in their capital-raising journey, helping them overcome traditional VC funding challenges and enabling businesses to thrive and grow.

By working together and embracing innovative solutions, we can empower diverse entrepreneurs to overcome funding barriers and cultivate an entrepreneurial ecosystem centered on innovation and impact.
Positive Impact
By supporting these entrepreneurs, you will play a vital role in supporting the growth of impact startups and social innovation, leading to breakthrough solutions and increased opportunity in an otherwise challenging environment.
Leadership Role
You have the unique opportunity to deepen your position as an architect in the impact ecosystem by building an alliance to re-think capital raising that includes a cross-section of funders and entrepreneurship programs.
Brand Alignment
This initiative aligns with your commitment to social responsibility and innovation, enhancing your reputation as a leader in elevating entrepreneurs, particularly in positioning partners as leaders in reimagining financing models and promoting equitable access to funding.
Increased ROI
By supporting a wider range of impact-focused ventures through equity crowdfunding, and with a 2024 goal of 30 founders each raising a minimum of $250,000, the returns could yield $7.5MM+ in capital during the first year.
Program Overview
The ARC Fund is jointly supported by an alliance of companies, foundations, and organizations committed to elevating equity crowdfunding as an alternative source of capital for underestimated entrepreneurs and proximate founders. SIS Omni acts as the organizer and fund administrator working directly with impact entrepreneurs to implement equity crowdfunding rounds.
There are three options to get involved:
1
As a Patron Partner
The 2024 goal is to support 30 impact entrepreneurs in their three-month equity crowdfunding rounds. The aim is to partner with an alliance of financial supporters (Patrons) each funding three impact entrepreneurs. Each impact entrepreneur will raise between $250,000-$5MM, so your investment has the potential for at least a 10x of positive financial returns for the startup.
Patron Partners include:
2
As a Pipeline Partner
Each Pipeline Partner is asked to nominate a certain number of their portfolio impact entrepreneurs for consideration to move through a crowdfunding round. Broader community Pipeline Partners have the opportunity to support impact entrepreneurs going through crowdfunding rounds by acting as thought leaders, mentors, advisors, connectors, fractional executives, and more.
In collaboration with:
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Pipeline Partners include:
3
As a Promoter Partner (Ambassador)
Promoters and Ambassadors act as general supporters and evangelists in using the ARC Fund to highlight on social media, at convenings, in articles/op-eds, and elsewhere the importance of democratizing sources of capital and investing, and eliminating the gap that exists in funding entrepreneurs in order to force systems change in traditional VC. Promoters and Ambassadors also have special opportunities to come together virtually and in person as a powerful community of advocates for inclusive entrepreneurship and democratized investing and financing.
Meet the ARC Fund Ambassadors
Become a Partner or Ambassador
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