Shutting down a startup can be a difficult decision for founders. In the case of Fundid, the business finance startup was impacted by rising interest rates and challenges with its cap table, according to founder Stefanie Sample.
Fundid attracted attention in 2022 when Sample secured $3.25 million in seed funding from investors such as Nevcaut Ventures, The Artemis Fund, and Builders and Backers.
Prior to founding Fundid, Sample had a successful track record as the owner of multiple franchise businesses in Montana. With her firsthand experience of the difficulties in accessing capital for businesses, she launched Fundid to provide lending solutions and finance resources tailored to women business owners.
Despite securing a debt facility partner to support its operations, Fundid faced challenges when the Federal Reserve raised interest rates multiple times between 2022 and 2023, leading to financial constraints for the company.
As the cost of capital outweighed the revenue potential, Sample made the tough decision to remove the credit card product from the market in the summer of 2023. Despite raising additional capital, Fundid's board advised Sample to pivot, but the financial landscape and ownership structure posed significant obstacles for the company's future.
Ultimately, the closure of Fundid in April 2023 marked a turning point for Sample, who opted to launch a new investment company named Pailor Capital. With a focus on empowering women entrepreneurs through acquiring and growing existing businesses, Sample's journey with Fundid has inspired a fresh start in the business world.
For more insights into the challenges and lessons learned from Fundid's closure, you can read Sample's postmortem shared with TechCrunch here.
