An early-stage investment fund out of North Dakota is championing women entrepreneurs with dreams of growing their businesses.
Founded by Kodee Furst with partners Chantel and Seth Murphy, Annie Capital launched in July 2018 in Dickinson, North Dakota.
“We’re really focused on the regional effort,” Furst said. “Not only are North Dakota and South Dakota great places to live, but they’re great places to build businesses that are doing new and disruptive things.”
Furst grew up on a ranch in western North Dakota and attended North Dakota State University. After graduating, she moved to Denver to work for a national nonprofit focused on women’s leadership.
“I had the opportunity to travel all over the country for that organization, and I saw women in a lot of different stages and saw how critical community and skill development could be for their individual growth stories,” Furst said.
After returning to North Dakota, Furst settled in Dickinson where she did business development and consulting.
“The one common theme I kept running into was that there weren’t enough women at the table, and I was lucky enough to find some partners that felt the same way,” she said. “We felt we had that perspective to design a fund by women and for women.”
Who does Annie Capital serve?
The focus for the fund is women-owned, or majority women-owned, businesses in North and South Dakota. More often than not, they will be in the early growth stage.
After looking at national data on funding for entrepreneurs, Furst says she noticed a significant gap when it came to women.
“We had a hunch that the capital landscape was trickier for women to navigate,” she said. “It can sometimes feel like women aren’t part of that network.”
While there are numerous positive networking opportunities for entrepreneurs, Furst says it can often be challenging for women to get involved.
“A lot of times, women feel they need to be invited into a space, and if you’re new to the market or to your own business, and you don’t know who’s running what, it can be intimidating,” she said. “Plus, much of the scene isn’t designed for women. Events happen around daycare pick-up time or late at night when it’s hard to show up for a networking event.”
Apart from those challenges, Furst also noted that many women are simply not speaking out about their businesses.
“Lots of the women we work with and talk to are just quietly working on their thing, and no one knows about them,” she said. “We thought funding was the missing piece, but we also have work to do in elevating the female founder story.”
What stage of business does Annie Capital focus on?
“Because our focus is pretty narrow with women and the region, we’re sector-agnostic,” Furst said, “But we’re always looking at the business’ growth potential.”
Furst says she typically wants to see some traction from a potential investee, such as a record of revenue and a customer base outside of friends and family.
“Sometimes, there’s great ideas that need funding before they can get that traction,” she said. “Reach out to us anyway. We’ve had people call who say they know they’re too early but they just want to be on our radar. We made up the rules so we can break them.”
Though the fund is sector-agnostic, Furst says she’s seeking women who are working on something new and disruptive.
“If you’ve got the idea that no one else around the corner has, that’s always interesting to us,” she said.
As far as growth is concerned, Furst recommends thinking about a customer base larger than your current city. A growth mindset opens entrepreneurs up to opportunities for growing their market and increasing their revenue stream.
“We like to see businesses who are looking at that growth mindset,” she said.
And ultimately when it comes to investment decisions, a lot comes down to the founder.
“Your grit is important,” Furst said. “We invest in the founder more than anything else.”
What’s the investment?
Annie Capital provides both financial support and coaching to its investees.
Currently, the two go hand in hand, says Furst.
“We really feel it’s important to have that coaching because small business can sometimes be a hard map to navigate,” she said. “Most entrepreneurs at this stage don’t have the resources to hire a coach, so we’re here to go alongside them in this journey.”
Annie Capital utilizes revenue based financing, a funding mechanism that functions as a hybrid of debt and equity financing.
Similar to debt financing, there is a monthly payback structure, but it’s flexible based on revenue. Like equity financing, the investor bears the risk if the venture doesn’t work out. The funding is non-dilutive, and there is no ownership stake for the investors.
“We didn’t want our success to be based on an exit stance, we wanted it to be based on profitability and growth,” said Furst. “With traditional equity financing you take a board seat, but we’re taking the coaching role instead.”
To get started, Furst offers an initial screening call.
“Our commitment is to say yes to every phone call if a woman inquires,” she said. “But the hard thing about investing is we’re going to have to say no a lot more times than we say yes.”
Still, Furst aims to provide guidance and connection to everyone she consults, and she says she often provides a connection to someone locally or regionally.
Beyond investment and coaching, Furst has spoken at a variety of local business events and breakout sessions. Annie Capital is also working on webinars and other resources to make available online.
“The state of entrepreneurship across this region is incredibly exciting, and we’re honored to be part of it,” she said. “All of North and South Dakota are rural. But we think it’s that grit that’s the hidden secret to success. Everyone living in North Dakota and South Dakota has a bit of it.”