‘We wanted to be the solution’: New Kansas City startup is getting national acclaim
As a consultant for small businesses in the Kansas City area, Jannae Gammage heard story after story of startups being denied loans. She wanted to find out why and discovered something surprising.
“When I first began researching, my assumption was something needed to be done on the lenders’ side,” says Gammage. “I found most times it was the small businesses not having the supporting documents or having financial reports in several different apps and bank accounts, and these things led to them being denied.”
So Gammage created her startup Foresight in September 2022 to help lenders make better assessments of small businesses. Foresight is set to formally launch next month after raising $2 million in seed money — and garnering acclaim from the national business community.
She started by speaking with people in every step of the process and began to dissect the common issues why banks deny loans. She found that many lenders wanted to invest in small businesses but lacked a criteria to judge them.
“For most of these owners the only interactions they had with banks prior to starting a business was setting up a checking or savings account,” she says. “There are so many small businesses that don’t understand the infrastructure or documents that they need in order to attain the funds.”
In its first year, Foresight captured lenders’ attention by becoming a finalist in the NXTSTAGE Financial Tech Pilot Competition, where Intrust Bank chose the company to be its pilot customer.
The local startup also received $100,000 from Northwestern Mutual under its Black Founders Accelerator program, and a $50,000 grant from Launch KC. Foresight is working with several local banks and has 200 banks from around the country signed up on the waiting list, according to Gammage.
Gammage, who moved to Kansas City in 2019 for a previous business endeavor called Market Base, saw firsthand as an entrepreneur how outdated metrics like credit scores could paint an inaccurate picture of a borrower. Applicants with good finances can get dinged for having no established credit history or if they’re still paying off student loans.
“Credit scores are taken into account, which can be super biased and eliminate a lot of business owners, especially Black and brown business owners,” she says. “We saw a problem and we wanted to be the solution.”
Foresight’s solution is an app that draws on artificial intelligence to gather data and provide lenders with a score based on the business and not the personal financial history of the owner.
It works within minutes instead of the usual weeks. The report not only allows a bank to see any red flags but also provides entrepreneurs the information they need to move forward instead of a simple denial with no details as to why.
Brandon Calloway, who co-founded the nonprofit GIFT KC to help close the gap in Black-owned startups receiving funding, is excited that an app could even the field.
“Unfortunately, you need to have more than a dream,” says Calloway, whose organization has given 63 grants totaling over $1 million since 2020. “Creating an outside score that is representative of your business progression and not a credit score would be vital in the minority business sector because the traditional credit score is also biased.”
“There are so many trends and small challenges that small businesses face and none so much as getting funded. Being denied can be a soul crushing experience, so to have a program where a lender can tell them exactly why and what they need to do to be viable is a major asset to new businesses.”
Gammage says the technology includes safeguards against system errors or outside manipulation. It can search online databases and assemble incomplete information as well as verify the information applicants provide.
“We only need the owner’s name, their business name, their business address and their tax ID,” says Gammage. “With that we can create a complete profile that a lender can use to make a decision very quickly without having a full credit score or having to go back and forth with the business owner to get information.”
The app price starts at $250 a month, but Foresight offers a discount for lenders who sign up for a year, and plans vary depending on the volume of applicants.
Gammage, though not a Kansas City native, believes this was the best place for Foresight to start. With organizations like GIFT and Porter House KC supplying new minority businesses with funding, more people are turning their hobbies into fully functioning businesses.
“I have been in a lot of startup ecosystems in my life and Kansas City is very unique because of the support I have seen for small businesses,” says Gammage. “It has been really inspiring for me and it has definitely contributed to my own mission of accelerating financial inclusion.”
