Betaspring’s model is different than most early state equity funds and accelerator programs. How does it work?
RevUp by Betaspring is a non-equity funding and support platform for fast growing, revenue-driven companies. While cash investment is an important part of our model, we pair our dollars with direct support from the Betaspring executive team and a heavyweight series of development opportunities, including an in-house growth team that our portfolio companies access for free. Rather than take equity, RevUp uses a revenue-based model where companies return investment as a percentage of revenue over time. So we win when our companies win. We invest on a rolling basis and in multiple cities at the same time and in both B2B and B2C companies.
What do you look for when selecting companies for investment?
We look for early stage companies that are moving fast up a revenue-fueled growth curve. In prospective candidates, RevUp likes to see a solid MRR with month-over-month growth, a high-quality team with proven executive ability, and companies that have room to run in the market they serve. We select companies where we believe our resources will bend the growth curve; if we can’t create significant uplift inside the business, then it’s not a good fit for us. Most importantly, we look for founders we like and companies that we believe in. Ours is a high touch model and feeling good about each other is a pretty critical piece of the puzzle.
Tell us more about your growth team. How do they work with companies in the Betaspring portfolio?
Our in-house growth team is a unique resource. Trained across the full stack of contemporary growth tools, the team ensures that our portfolio companies have the capacity to act fast on growth boosting opportunities. They are extra hands to help with digital marketing, site monitoring, analytics, content creation, brand positioning and funnel development – all of the things you need to transform how you find and interact with prospective customers. The team works with each portfolio company for a 3-6 month period following investment, free of charge. After that, the team can be deployed on an as-needed basis to provide booster services at critical times in a company’s growth.
Betaspring has been investing in startups since 2009. What’s changed the most in terms of how successful ventures launch and grow?
When Betaspring launched in 2009, we were the 8th accelerator in the world to come into existence. By 2014, there were 1000+ organizations in the world that called themselves accelerators. There’s been a massive proliferation of programs aimed at very early stage ventures, lots of it good, some of it bad and much of it confused about its end goal. Conversely, there has been less development, and less innovation, in how we fund and support companies that are “graduating” from these platforms. There aren’t many tools in the funding toolkit, and investors are still myopically dependent on the equity system. There are other ways to capitalize a business, but we seldom discuss or analyze them in the startup press. We should. So while the world is hatching startups at a remarkable rate, we have not improved our ability to usher them into adulthood, where they can create the jobs, economic value and new solutions that the world so desperately needs.
What trends in the startup world are you most excited about for 2017?
The world is awakening to the value of revenue for early stage companies. Even if you can raise successive rounds of financing, knowing that people will pay for what you do is a powerful benchmark that more and more companies are being challenged to meet. I think it’s a healthy and long overdue shift in how we evaluate a company’s growth potential.
What else would you like to share?
We are selecting investments for 2017. There’s more information on our website and we encourage interested companies to fill out a pre-screening form to see if there’s a fit. I’d also encourage founders to chew on this: 93% of the companies on the INC 5000 list have NOT raised venture. They’ve grown through small rounds, revenue, bootstrapping, and mostly by stitching a few of these things together. It’s not a sexy story so you won’t read about it on TechCrunch. But it’s real. And chances are, it’s what you’ll have to do if building a company from scratch is on your agenda.
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