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The Diversity Stack

Why getting more women into investing matters for equality in entrepreneurship

by Melissa Withers

Prior to September 2020, the investors in RevUp Capital’s funds (Limited Partners, or LPs) were 94% male. Until recently, I accepted this as an inevitable consequence of socio-economic factors and inequity far beyond my control.

If you’d asked me 6 months ago about increasing diversity in investing, I’d have describes a two-pronged strategy: appoint more women fund managers and write more checks to women-led companies.

This changed last spring when a non-investor friend asked (glibly), “Why are the people who give you money all dudes? I thought you were all about getting the ladies involved?”

When faced with this question about the absence of women LPs in the RevUp fund, I saw, in a new light, how our diversity efforts were incomplete. They didn’t reach into the core of what’s behind every fund: the Limited Partners whose money we invest. Like it or not, the fund managers are beholden to the LPs. They may not be visible, but neither is the DNA that made my eyes brown. If you change the investors, you change the DNA of your fund…and DNA begets the future.

Lack of representation across all aspects of early stage investing has stifled American entrepreneurship in immeasurable ways. It has done so by systematically excluding women, people of color, and those not lucky enough to be born into networks of privilege.

This is profoundly devastating in how it effects who gets funded (VC dollars to women recently dropped to a three year low). But the lack of diversity in the investor pool goes far deeper. Early stage investors are often mentors, advisors, and kingmakers in the startup community. They are the popular kids: they ignore what they don’t like and those who emulate them follow suit. We celebrate what we see. And frankly, kingmakers don’t often make queens.

This is why recruiting new fund managers and writing more checks is not enough to change the game, to create the lasting change so many of us crave. We need to see the “diversity stack” in startup investing differently. It’s not a two-part problem. The Diversity Stack is a three-part opportunity: who manages the money, who gets the money...and whose money is getting put to work.

The shortage of women investors reflects a lot of things: the disparities in wealth between men and women, how familial/household wealth is managed and who gets to decide where dollars are directed, and the boys-club-like feel of early stage investing platforms just don’t speak to the interests and preferences of many others who DO want to invest. For people of color, these issues are amplified beyond measure.

Was this the only reason why we had so few women investors in our fund? No. The truth is that we hadn’t tried.

When we wanted to invest in more companies founded by women and people of color we had to change almost everything about our recruiting and selection process. It took years of dedicated effort to get to where we are today (In 2019, 60% of companies in our portfolio are women-led. Since 2018, 30% of our investments have been in founders who identify as brown or black).

Had I built and executed the same kind of focused campaign to “break through” to women who might be good fund LPs? Nope. I needed to do real work to make the fund accessible and attractive to the women I wanted to have as LPs—work made hard by the reality that it is a smaller part of the overall population.

This summer, when raising our most recent fund, I sent different communications and dug deeper into our network. We worked with an institutional partner who had unique access to women with wealth to invest, and listened carefully to their guidance on how to speak to these investors in a manner that resonated. I re-thought how we described our model and the benefits it offered our investors.


I am pleased that in our most recent fund we increased gender diversity A LOT. We increased racial diversity A LITTLE. As of October 1, 2020, 30% of our current fund was contributed by female LPs. 22 out of 37 investors.

Take away: like all work to create equality, this was a real effort. A good example of where talking the talk wasn’t enough to make the change I wanted to see. But I can tell you from experience, it was worthwhile. We WILL do it again.

Not all of these new women LPs will be actively involved in advising and supporting our companies, but some will. Not all of these women will take an active role working with me and my partners, but some will. They will make me, and our fund, so much stronger.


Melissa Withers

Founding Partner, RevUp Capital

More About RevUp Capital

RevUp Capital invests in B2B and B2C companies that are revenue-driven and ready to double down on growth. We deploy cash and capacity to help companies grow from $1-3M to $10-30M, quickly and efficiently, using a non-equity, revenue-based model. Since 2016, we have used our battle-tested cash and capacity model to move companies up the growth curve, and together, break free from the constraints of equity-only funding.

Companies enter our portfolio with $500K-$3M in revenue, a strong growth rate, and a team that’s ready to scale.

Our typical investment range is $300K-$500K. We invest into a company's market-facing activity using a cash and capacity model. We pair our cash investment with 12-months of dedicated support from the RevUp Growth Platform: a powerful resource to build a data-driven growth engine, delivered by people who get the work done. Rather than take equity, companies return investment through a small percentage of revenue over time.

Still want more? Read this for additional information on how we invest here.

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