Stacey Abrams Startup Receives $9.5M in Funding
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“In 2010, we created NowAccount because we were sick of waiting for our customers to pay.” That’s the headline on this startup’s website. One of its founders is a notable figure in another arena: politics. Stacey Abrams.
The 48-year-old politician, lawyer, voting rights activist, and author served in the Georgia State House of Representatives for 10 years. Three years ago, she founded Fair Fight Action, an organization that fights against voter suppression. The public has widely credited her advocacy efforts with increasing voter turnout in Georgia for the 2020 election. Joe Biden narrowly won the state, and both of Georgia’s U.S. Senate seats went to Democrats.
Stacey Abrams Startup Founder and Fundraiser?
In addition to her many interests in law and politics, Abrams also has another role: that of startup founder and fundraiser. Her financial services company, Now, recently obtained $9.5 million in Series A funding. Series A funding, also called “Series A financing” or “Series A investment,” is the initial venture capital funding for a startup. The Series A funding round comes after a startup’s seed round. Series A refers to the class of preferred stock. Subsequent funding starts with the Series B Funding.
Virgo Investment Group led the Series A round for the startup, joined by Cresset Capital Partners.
Fast Company reports that Abrams has been a startup entrepreneur for some time. Now is her third startup, which she costarted back in 2010 with Atlanta entrepreneur Lara O’Connor Hodgson.
About Stacey Abrams Financial Services Company Now
Simply put, Now helps B2B companies collect invoices more quickly.
Hodgson said that Now is solving a problem that she experienced in growing her small business about 14 years ago, which is how to grow a business without growing to death. She also has helped launch an innovative footwear and apparel brand in Los Angeles called DUNK with Shaquille O’Neal.
Stacey Abrams and Lara O’Connor Hodgson saw stagnant growth in their spill-proof water bottle company Nourish, which they started in 2009. That was due to late payments from other businesses, which made it difficult to grow. Hodgson said that if restaurants and retail brands were paid immediately through consumer credit card transactions, that process could be applied to business-to-business transactions.
Small Businesses Key
Hodgson said that Now’s innovation is similar to the growth of national grocery store brands. In the past, stores managed their credit tabs for customers. When credit cards became popular, they could get paid immediately and use that cash to expand their stores. She went on to explain in a 2014 Atlanta Business Chronicle article:
“Small businesses are the engine of our economy, but the engine cannot run without fuel, and that fuel is capital. Most people assume that the capital small businesses need to grow is debt or equity, but it’s not. Small businesses can grow if they are paid on time — and ‘on time’ means when they deliver the good or service, not 30, 60, 90-plus days later.”
Now has more than two dozen employees with five open positions. Cofounders Stacey Abrams and Lara O’Connor Hodgson say that they are seeking new office space in the south Buckhead area after her team spent a year working remotely. The startup boats more than 350 active clients, mostly businesses relating to services, such as consulting or architectural firms. In addition, Now has a partnership with Coca-Cola to help the small businesses the beverage giant works with reach their revenue goals.
Company Created from Experiences at Another Firm
NowAccount grew out of the experiences the two startup cofounders had running Nourish, which made baby and toddler beverages. They were forced to close the company after they received a large retailer’s order but were unable to obtain a loan to their upgrade equipment.
Stacey Abrams explained that in commerce, small businesses commonly lend huge amounts of money to big companies for one to four months at a time. “Small businesses are the largest source of lending due to delivering products and waiting 30 days or morometimes much more) for payment,” she says.
The company plans to use their recent influx of cash to scale Now’s tech platform, which aggregates risk data from 10 years of invoice payments to more than 1,000 businesses.