Fifth Star Funds

What Fifth Star Funds does

Fifth Star Funds is a registered 501(c)(3) nonprofit organization operating as America's first philanthropic Friends & Family venture fund, founded in Chicago in February 2021. The organization provides $25,000 catalytic investments to early-stage tech founders who have faced material barriers to accessing capital due to racial discrimination, with a primary focus on Black founders who receive only ~1% of U.S. venture capital. The $25K ticket is intentionally calibrated to match the average U.S. Friends & Family round benchmark of ~$23K. Its core product surface consists of the $25K investment program, a proprietary Entrepreneur Evaluation Rubric (a structured, bias-removal framework scoring founders across nine dimensions including problem understanding, solution validation, adaptability, unit economics, market sizing, product priorities, resourcefulness, fund usage planning, and grit), and published research on the racial wealth gap supporting its investment thesis.

The organization's business model is hybrid: as a nonprofit, it raises deployable capital through tax-deductible donations from individuals, companies, and foundations (including a $125,000 grant from the Richard L. Duchossois Foundation and backing from Goldman Sachs, Salesforce, and Chicago philanthropists), while operating an evergreen venture model in which 100% of portfolio returns are reinvested into subsequent founders rather than returned to donors. Distribution to founders occurs through a website application portal, supplemented by partnerships with 1871 (Chicago's tech hub) for educational resources, LongJump VC for coaching and coworking, and event-driven outreach including the Chicago Venture Summit. Across four years of operation, Fifth Star has invested in 24 portfolio companies spanning cybersecurity, events, e-mobility, insurance, health tech, e-commerce, AI/tax, and other verticals, and reports that 25% of portfolio companies raised $100K+ in subsequent funding, more than 10x the 2.4% national average. The organization is governed by a six-member board (Kyle Backer, Stella Ashaolu, Tim Huelskamp, Osa Osarenkhoe, Nate Pelzer, Tracey Suppo), with Samir Mirza serving as co-founder and Executive Director.

Name

Fifth Star Funds

Legal name

Fifth Star Funds, Inc.

Website

https://fifthstarfunds.com

Company type

Private

Founded year

2021

Operating status

Operating

Headcount range

1–10 employees

Short description

Fifth Star Funds is a Chicago-based 501(c)(3) nonprofit operating as America's first philanthropic Friends & Family fund, providing $25,000 catalytic investments to early-stage tech founders facing racial barriers to accessing startup capital.

Ownership category

akta.pro rank

Product category

Philanthropic Pre-Seed Venture Capital

NAICS

Grantmaking Foundations (813211)

SIC

Investment Advice (6282), Services-Social Services (8300)

akta.pro primary industry

Gender Lens / Diversity, Equity & Inclusion (DEI) Funds (FSANAJAM)

akta.pro secondary industries

Impact Investing & Social Finance (Funds, CDFIs, Microfinance) (BPAGALAA), Early-Stage Venture Capital (Pre-Seed/Seed) (FSANAAAA), Private Foundations (BPAGAKAA)

Keywords

• Pre-seed venture capital
• Philanthropic startup funding
• Friends and family fund
• Underrepresented founder investment
• Nonprofit venture fund

Headquarters

HQ city

Chicago

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2B

Offering type

Services

Cost components

Personnel, Operations, Marketing or Sales, Technology or R&D, Others

Revenue model

1. Donations and Grants: Fifth Star Funds operates as a registered 501(c)(3) nonprofit organization that raises capital through donations from individuals, companies, and foundations. All contributions are tax-deductible. The organization also receives grants such as a $125,000 grant from the Richard L. Duchossois Foundation. They have raised $1.4 million total to date.
2. Evergreen Investment Returns: The organization operates an 'evergreen' model where 100% of all investment returns stay within the fund. As portfolio companies succeed, they create opportunity to fund more underrepresented founders, creating a compounding impact.

Pricing tiers

Go-to-market motion2 records

Distribution channels3 records

Marketing channels10 records

Core offering

Fifth Star Funds operates as America's first philanthropic Friends & Family venture fund, providing $25,000 catalytic investments to early-stage tech founders who have faced material barriers to accessing capital due to racial discrimination. The organization uses an evergreen model where 100% of investment returns are reinvested to support the next generation of overlooked founders, with founders evaluated using a proprietary bias-removal rubric.

Product overview

Fifth Star Funds operates as America's first philanthropic Friends & Family fund, providing a single core offering: $25,000 catalytic investments to overlooked early-stage tech founders who lack traditional access to early capital. The organization uses a proprietary Entrepreneur Evaluation Rubric to assess founders based on criteria including problem understanding, solution validation, adaptability, unit economics, market sizing, product priorities, resourcefulness, fund usage planning, and grit. All investment returns are reinvested through an evergreen model to support future founders. The organization also publishes Racial Wealth Gap Research to support its mission of addressing the 22x wealth gap facing Black founders.

Differentiator

Problem solved

Functional benefit

Products and services

• Fifth Star Funds Investment Program A $25,000 catalytic investment program providing overlooked early-stage tech founders with Friends & Family stage capital to validate their ideas and create traction for future funding rounds. The investment is intentionally set to match the U.S. average Friends & Family round benchmark of $23K. Returns are 100% reinvested through an evergreen model to support subsequent founders. Recipients are founders who have experienced material barriers to accessing capital due to racial discrimination.

Quantifiable outcome

• 25% of Fifth Star portfolio companies have raised $100K+ in subsequent funding, outperforming the national average of 2.4% by more than 10x
• +3 more outcomes

Named customers26 records

Segments2 records

Ideal customer profiles2 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Feature1 record

Partnerships

Two partnerships are on record, tiered core and minor.

• 1871coreImplementation/ SI/ Consulting PartnerEducational resources provided by 1871 (Chicago's digital commerce hub) for portfolio company founders. 1871 is Chicago's technology hub and entrepreneurial center.
• Winston & StrawnminorStrategic or Co-development PartnerFeatured as a logo partner on the Fifth Star Funds website. Winston & Strawn is a major Chicago law firm supporting the organization.

Scale indicators10 records

Recent moves3 records

Expansion highlights5 records

Direct peers

• Backstage Capital: Backstage Capital is a venture fund focused on investing in underrepresented founders (women, people of color, LGBTQ). Like Fifth Star, it targets the gap in early-stage capital access for overlooked founders and shares the mission-driven pre-seed thesis.
• Kapor Capital: Kapor Capital is an impact venture firm that invests in early-stage tech startups closing gaps of access, opportunity, or outcome for underrepresented communities. Both funds prioritize early-stage investing with a social equity lens and target founders who lack traditional network access.
• Harlem Capital Partners: Harlem Capital is a venture fund specifically focused on investing in people of color, with a stated goal of investing in 1,000 diverse founders over 20 years. Direct overlap with Fifth Star's mission of addressing racial inequity in startup funding.
• MaC Venture Capital: MaC VC is a seed-stage venture capital firm investing in founders of color and technology companies that are transforming various industries. Closely aligned with Fifth Star's underrepresented-founder thesis at a slightly larger check size.
• SoGal Ventures: SoGal Ventures invests in diverse and female-led startups across the U.S. and globally. Similar pre-seed/seed thesis focused on overlooked founders, with both impact orientation and institutional venture backing.
• Collide Capital: Collide Capital is a pre-seed venture fund investing in tech companies founded by people of color. Directly comparable to Fifth Star's stage, target founder demographic, and mission-driven approach.
• New Voices Fund: New Voices Fund is a venture capital fund investing in women of color-led startups. Shares the underrepresented-founder mission and pre-seed/early-stage positioning with Fifth Star.
• Impact America Fund: Impact America Fund is a venture capital firm that invests in companies solving social and environmental problems. Shares Fifth Star's impact-investing orientation and early-stage focus on mission-driven founders.

Emerging players

• Echoing Green: Echoing Green provides fellowships and seed funding to social entrepreneurs. Comparable as a nonprofit philanthropic fund supporting underrepresented leaders with catalytic capital, though focused on social enterprises rather than pure tech startups.

Others

• Tides Foundation: Tides Foundation is a philanthropic partner and fiscal sponsor that provides backend infrastructure for donor-advised funds. Fifth Star already partners with Tides for nonprofit administration, making it a key ecosystem counterpart in the philanthropic infrastructure layer.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat4 records

Key risks6 records

Key highlights7 records

Customer concentration

• Xtwitter.com/fifthstarfunds
• Facebookfacebook.com/fifthstarfunds
• Instagraminstagram.com/fifthstarfunds

Revenue estimate

Valuation estimate

Number of profiles

Profiles8 records

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Fifth Star Funds