Fifth Star Funds, a Chicago nonprofit that funnels early-stage capital to founders of color, is turning up the volume on its next move: backing at least six local tech startups in the near term. To get there, the group plans to pull together a $450,000 friends-and-family pool while leaning on new partners and grant dollars to beef up hands-on founder support. Leaders describe the effort as a hybrid of investment fund and community accelerator, with the money and the mentoring meant to move in lockstep.
According to the Chicago Sun-Times, Fifth Star was about halfway to that $450,000 target in the fourth quarter of 2025 and has raised roughly $1.4 million since launching. The outlet also reports the organization received a $125,000 grant from the Richard L. Duchossois Foundation in February to help founders validate ideas and prepare for pre-seed investment. Fifth Star leaders say the new money will help fund $25,000 checks and follow-up programming for selected companies.
LongJump Partnership Adds More Than Just Cash
The fund says its collaboration with LongJump, a Chicago founder-led first-check fund, is designed to stack the deck in favor of portfolio companies after the initial wire hits. The tie-up promises operators and founders hands-on coaching, discounted coworking space, and other vendor perks. Fifth Star leaders say access to LongJump's existing network and programs should help startups move faster once that first check clears.
Friends-and-Family Model and Who Runs It
Fifth Star bills itself as the nation's first friends-and-family fund for founders of color, pooling grassroots donations, individual backers, and foundation support to recreate the early capital that many entrepreneurs do not have, according to Fifth Star Funds. The group lists six co-founders and describes an evergreen 501(c)(3) model that recycles returns back into new founders. On its portfolio, Fifth Star Funds shows investments in companies ranging from consumer marketplaces to energy and AI startups, including ThrowbackBuys and Banyon Power. The organization also lays out a typical $25,000 check size and emphasizes education, mentoring, and network access as core pieces of post-investment support.
Why This Matters for Chicago Founders
Venture funding in 2025 became more concentrated, with larger AI-heavy rounds capturing a growing share of capital while total round counts fell. That shift has made catalytic first checks harder to come by for many founders. A report from Carta shows capital flowed into fewer, bigger rounds last year, underscoring why local, mission-driven programs that provide early checks are critical for more equitable startup growth in Chicago.
Fifth Star's leaders say they are looking for a transformational capital partner to scale the model nationally and multiply the number of founders they can support each year, as the Chicago Sun-Times reports. If that expansion comes together, Chicago founders who lack wealthy personal networks could see more consistent access to the first checks that often decide whether a startup ever gets off the ground.
