There are many high-potential companies focused on growing through revenue...and more startups would be wise to follow in their footsteps.
This was our hypothesis when we launched RevUp, the first accelerator for companies where growth through revenue is the primary goal. We focus the program and our investment on actions that increase customer acquisition and stimulate revenue growth.
The mechanics of RevUp make it easier for us to work with a broader spectrum of high growth ventures. We do not take equity in the companies we accelerate. Instead, we earn our return as revenue scales. Because we aren’t unicorn hunters, our model doesn’t depend on exits. This enables us to work, and work differently, with ventures across industries and sectors.
When we launched in June, we set out to validate this hypothesis and select 6-8 companies to join our first cohort. After 60 days, here’s what we’ve learned and a preview of what’s to come.
1. New England is a target rich environment. The corridor between Boston and New York--where we concentrated our first round of company evaluations--is a rich environment for finding high-potential revenue-first companies. Duh. But an important point to validate nonetheless.
2. Equity investors did not freak out. The RevUp model is complementary to early-stage equity, especially if a company has raised part or all of a seed round with angels or small funds. Our revenue acceleration approach increases market traction, which makes the company more attractive for Series A funding OR gives them more survivability through revenue. Either way, that’s good for their investors. (P.S. being non-dilutive is a bonus).
3. People are into it. We knew RevUp would be attractive to Internet and SaaS companies, but we are seeing interest from a much wider group, including consumer products, ecommerce, and niche verticals. Companies that aren't a perfect fit for venture still need capital and support to grow. Startups often figure out a first path to revenue but need help to significantly bend the growth curve. These companies don’t get much love from venture, and because most accelerators are tied to the VC wagon, they are underserved and yearning for help.
4. We can focus on helping companies sell stuff and make money. Founders are often encouraged (in some ways forced) into artificial beliefs about their market size in order to justify the prospect for an equity driven outcome. In our collective obsession with unicorns, we are obscuring the worthy goal of creating profitable companies that create new value in the world.
5. When it comes to growth marketing, cliff notes don't cut it. Growth marketing is a skill. It requires effort to learn, practice to master, and constant experimentation to optimize. This is a hard skill to teach to founders who aren’t digital marketing natives. We will build better companies as we learn how to train more entrepreneurs to use the new tools we have to find, engage and sell to customers.
To support this, RevUp built and internal growth team that is on-hand to share the load with our companies.
6. We get by with a little help from our friends. Launching RevUp also reminded us that the power of the network is still the most important power of all. In June, we wondered how the community would react to the new platform. They reacted by sending us high-quality leads and enthusiastically referring top-notch founders to our doorstep. Not every referral was a fit, but working with ambitious entrepreneurs in any capacity is always a pleasure. Thanks for that.
We have company screening days coming up in Boston, Providence, Detroit, and New York. Drop us a line at firstname.lastname@example.org to find a time to connect.