Measuring founder ‘wealth creation’ to track the impact of small business finance

At the root of America’s wealth gap is unequal access to ownership. While incomes and business revenues matter, they are not the endgame. The long-term prosperity of individuals and communities depends on the ability to build and hold assets that appreciate over time.

In my experience creating and leading Founders First Capital Partners, I have seen firsthand how important it is to help underinvested, service-based small businesses grow, create premium-wage jobs, and build stronger communities nationwide. We have pioneered flexible “equity-like” private credit products alongside wraparound advisory services, with no collateral, no dilution and no exits required. 

Since our founding, we have measured our success through well-established impact markers in small business finance — job creation, revenue growth, capital raised, and access to new markets. But in 2024, we took a step forward that I believe will reshape how impact is measured across our industry: we began tracking projected wealth creation among the entrepreneurs we support.

Why wealth creation matters

Traditional small business finance metrics — jobs and revenue — are vital, but they often miss the deeper story. A founder may employ dozens of workers, yet if she cannot grow the value of her business she may remain shut out of meaningful wealth accumulation. We believe closing that gap requires more than creating good jobs. 

“Measuring wealth creation is critical if we want to capture the real story of economic mobility. Revenues and jobs matter, but the ability of entrepreneurs to build appreciating assets is what shifts generational trajectories and strengthens our economy,” says Cynthia Muller of the W.K. Kellogg Foundation – an investor in Founders First Capital. 

Wealth creation requires giving founders the tools, capital and pathways to build wealth through ownership. This is how families achieve stability across generations and how communities break cycles of poverty. Wealth creation is not just a financial milestone. It is a structural change agent.

How we began measuring wealth creation

In 2024, we applied a methodology that estimated how our portfolio companies’ growth translated into increased valuations. We began by conducting baseline valuations at the time of funding, using third-party reports and revenue multiples by industry and borrower profile — ranging from 1.5x for professional services to 4x for tech and SaaS.

As companies grew their revenues, we applied those multiples to assess changes in value. The result: $31.6 million in projected new wealth created across our portfolio as of 2024, with an average of $877,000 per company. This number is not static, nor is it a perfect measure. Small business valuations are influenced by many external factors — such as market conditions, liquidity and sector dynamics — that we cannot fully predict. But what this exercise makes visible is the tangible link between our capital, our technical assistance and founders’ ability to grow an asset of lasting value.

A work in progress

I want to be clear: this is the beginning of an evolving journey. Wealth creation is a complex, multifaceted concept. Unlike revenue or job counts, it is not easily captured on a spreadsheet. It also represents unrealized gains, which may or may not be liquidated over time. Our current methodology is directionally accurate, but not definitive. It will be refined over time as we track outcomes, learn from external partners and respond to real-world conditions.

By being transparent about this evolution, we invite dialogue across the impact investing and small business finance ecosystems. Together, we can shape a more rigorous, standardized way of tracking wealth creation that reflects both financial performance and social progress.

Why this moment matters

Our decision to start measuring wealth creation comes at a time when supply chains are shifting, public and private sectors are investing in US-based suppliers, and impact investors are increasingly looking for strategies that deliver financial returns and build family and community wealth.

In this environment, underinvested small businesses have unprecedented opportunities to grow into mid-market enterprises. But without access to the right kind of growth capital — capital that is non-dilutive, patient and paired with technical assistance — these opportunities may slip through their fingers. This is also a major opportunity for investors looking for untapped markets who can also provide predictable, fixed-income, and often uncorrelated returns.

Through initiatives like our Supplier Innovative Finance program and our Passport to Funding Readiness Program, Founders First is equipping entrepreneurs not only to survive but to thrive. Our debt products address the capital needs of underinvested founders in growth markets such as the green economy and healthcare. And with the upcoming launch of our Change Catalyst Fund II, we plan to expand our ability to provide transformative growth capital at scale.

Looking ahead

The launch of our wealth creation metric is a milestone, but it is also a call to action. Measuring wealth creation acknowledges that economic mobility is not achieved through income alone; it requires ownership and the capacity to build assets that endure.

At Founders First, we are committed to refining this metric and sharing our learnings openly. We hope others in the impact ecosystem will join us in this effort. By measuring wealth creation alongside jobs and revenue, we can more fully capture the transformative power of small business growth.

Our ultimate vision is simple but monumental: to scale a shared success economy where underinvested entrepreneurs — alongside their investors — not only create jobs and revenues, but also accumulate wealth, pass down appreciating assets and transform their communities for generations to come. We hope you will join us in this critical effort for the success of the US economy and our society.

Kim T. Folsom is the founder, chairperson and CEO of Founders First Capital Partners.

Disclosure: The W.K. Kellogg Foundation is a sponsor of ImpactAlpha.