On this episode of The Roadmap, Michael Davis, CEO and co-founder of Homegrown, reveals how his company offers a fresh approach to funding for brick-and-mortar businesses. Davis shares his personal journey growing up in an entrepreneurial family, the struggles of securing capital, and how Homegrown provides much-needed, non-dilutive financing to help entrepreneurs grow their businesses—without risking their personal assets.
Michael Davis, founder of Homegrown, underscores that undercapitalization is the leading reason most businesses fail—a lesson he learned firsthand from observing his parents’ entrepreneurial struggles. He explains that many business owners underestimate the financial resources needed to grow and sustain a company. To solve this, Homegrown provides capital without requiring entrepreneurs to risk personal assets or give up equity, helping them scale while maintaining full ownership and control.
Homegrown focuses exclusively on brick-and-mortar businesses—defined as any business where customers physically enter a location, such as yoga studios, medical offices, gyms, and restaurants. Davis intentionally excludes tech companies from this model, emphasizing that brick-and-mortar operations represent a substantial share of U.S. consumer spending and play a crucial role in supporting local communities. By zeroing in on these businesses, Homegrown aims to empower a traditionally underserved segment with growth capital tailored to their needs.
A key feature of Homegrown’s approach is its use of “non-dilutive expansion capital.” Instead of requiring equity in return for funding, Homegrown utilizes a revenue-sharing model. Entrepreneurs repay a small percentage of their revenue over time, allowing them to grow without taking on heavy debt or sacrificing ownership. This structure supports long-term financial stability and aligns well with the interests of founders looking to preserve their stake in the business.
Davis also contrasts Homegrown’s model with traditional loans, which often involve personal guarantees that can jeopardize an entrepreneur’s home, vehicle, or savings. Reflecting on his family’s own experience with bankruptcy, Davis explains how Homegrown eliminates this risk. By removing the threat to personal assets, Homegrown enables business owners to make strategic investments and take calculated risks with greater confidence.
The repayment system is designed to be flexible, adjusting with a business’s monthly revenue across all locations. If a business earns less in a given month, it pays less; if it performs well, it pays more. This variability ensures that repayments remain manageable and directly tied to the company’s success. Davis notes that this shared-risk model creates a true partnership between Homegrown and the entrepreneur—one that supports sustainable growth, especially in industries often affected by fluctuating market conditions.
“Our model allows proven entrepreneurs to access capital without taking their ownership. And that’s one of the most powerful things we do. It enables entrepreneurs to grow their businesses without putting everything they’ve worked for at risk.” – Michael Davis.
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