It's easy to feel bad about 2016. The world saw too many tragedies to respectfully acknowledge. The U.S. presidential election was one of the ugliest (and most disruptive) in recent memory. Syria is in ruins and its people abandoned in ways I never dreamed possible. Bonus: the realities of climate change came home hard, with global weather patterns about as predictable as Donald Trump's tweets.
All of this makes celebrating professional and personal triumphs bittersweet at best. But last week, when Michelle Obama made her final address as First Lady, she urged us to remember that hope is what makes—and keeps—us human. While the haze of bad news hangs heavy on the dawn of 2017, Mrs. Obama's words reminded me that I work with early stage ventures because 'hope' is my preferred currency. For better and worse, I dream about the future more than I reflect on the past.
Through this lens, 2016 was a banner year. On the investment front, we welcomed some amazing new companies into the Betaspring portfolio via RevUp, the non-equity investment and support platform we launched in late 2015. It was incredible to bring a new model for supporting early stage companies into the market. With it's unique blend of cash and growth services, RevUp lets us work with a diverse spectrum of companies and in a high-impact way. RevUp draws from our history as one of the first (and best) startup accelerators in the world, while shifting our focus toward companies that we are wildly excited about: those where revenue is the primary driver of growth.
Why these companies? Because they are exciting, make and deliver things that people want and need, and are often underserved by the equity-only model. Oh, and there's a lot of them. More than 90% of the companies on the INC 5000 list of fastest growing companies aren't venture funded. Many got big by going full throttle on revenue. We like that.
We designed RevUp specifically for that kind of company and it's why we use a non-equity model where companies return investment as a percentage of revenue over time. It's also why we amplify our cash investment with a carefully curated set of growth services, invest on a rolling basis, and operate in multiple cities at the same time. It's our formula for building successful, revenue-driven companies that make founders AND investors happy.
So now what? With the new year comes new investments, and we are actively evaluating candidates in several cities. By-in-large, RevUp in 2017 will operate much as we did in 2016 but we did make a few adjustments based on our experience working with our inaugural investments. Here they are in brief:
- We increased the cash component of our investment.
- We expanded the timeframe in which portfolio companies access our in-house growth team from 3-6 months. Sometimes more really is better.
- We created a new "booster shot" framework to help companies beyond the 3-6 month window access growth services on an as-needed basis.
- We are now investing in companies beyond the Boston to NYC corridor. We thank Pittsburgh for breaking the seal on our expansion and helping us prove that RevUp works beyond our home range.
- We are no longer accepting applications but do have a pre-screening form on our website that interested founders can use to get in touch.
As we scan the universe for new investments, please help us spread the word and encourage companies that might be a good fit to fill out the pre-screening form on our website. Not sure what we look for or how it works? Scroll down a few lines to the "Brass Tacks" section of this post for more.
So, that's the New Years news from me. I'll end with a huge round of thanks to the advisors, investors, alumni, friends and partners who helped us in 2016. GIANT props to the founders we work with, who have parlayed our investment and support into some impressive growth numbers. Without you, I'm just a lady with a bag of money and a hankering to build great companies. XO.
The Brass Tacks: How RevUp Invests
RevUp is a non-equity investment fund and services platform for companies moving fast up a revenue-driven growth curve. Betaspring has been investing since 2009 (90 companies, $65M follow-on funding raised, four exits). The team launched RevUp in 2015 to serve companies where revenue is the primary driver of growth and to work beyond the constraints of equity-only financing.
- Solid MRR with month-over-month growth (companies entering portfolio with annual revenue in $250K-$3M range)
- High quality team with proven execution ability
- Room to run in the market they serve (B2B and B2C)
- Cash investment of $75K-$150K
- World-class service component includes access to Betaspring's in-house growth team, trained across the full stack of digital growth tools
- High touch support from Betaspring executive team
- 36-month return period with revenue royalty ranging from 4-8%.
Melissa Withers is Betaspring Managing Director. She leads selection for the RevUp program and can be found at firstname.lastname@example.org.