When we started RevUp in 2016, using revenue-based funding with earlier stage companies was a new idea. Today, it’s one of the fastest growing forms of capital on the market. Adapting quickly is a benefit of pioneering a new model, and each year has brought changes to how we invest. 2021 is no exception.
Aside from changes to our deal structure—always important to founders!—we have changed how we deploy the RevUp Growth Platform. The Growth Platform is a significant part of our investment model and strategy. It’s been invaluable through the years and it’s not going anywhere. But, we are changing how it figures into each investment we make.
Summary: Until recently, the platform was delivered across a 12-month process that companies absorbed in “one bite.” We have broken this process into modules that can be deployed as stand-alone units or sequenced together. This changes the total volume of support that a company receives and the timeline on which it’s delivered. This also changes the investment mechanics around the resource, giving us greater flexibility to customize each investment to best match a company’s needs and capabilities.
RevUp invests into companies as they strive to grow from ~$1M to $10-15M in revenue. Aside from being two distinct phases of growth, this curve is the great equalizer in business building. While stats show that ~4% of businesses make it to $1M in revenue, an abysmally small number ever make it to $10M. Some assessments put the number as low as .4%.
At the bottom of this curve companies must tackle the day-to-day demands of running a business while simultaneously deciding what to do NEXT. This is especially true with marketing and sales, where layering in new/next strategies is essential to driving growth. Holding steady can easily consume all of a company’s focus, meaning that decisions around what to do next become more speculative and sporadic...if they get made at all. The best outcome is a growth plateau. The worst is a slow descent to company death.
Injecting cash and capacity into marketing and sales at the bottom of this curve hits this problem head-on. With the Growth Platform and its team on the ready, companies don’t guess about what to do next. They don’t make unnecessary mistakes fumbling with new tools or approaches. Most importantly, they experiment, rapidly and cost-efficiently, to produce real data that drives better decisions around what’s market-facing strategies are most worthy of time, effort and money.
Beyond providing the framework for this effort, the Growth Platform provides the people and tools to get the work done. Ask a RevUp founder and it’s be the people, not just the process, that made the biggest impact on their company.
In years past, the platform was delivered across a 12-month process that companies absorbed in
“one bite.” In 2021, we have broken this process into modules that can be deployed as stand-alone units or sequenced together. This changes the total volume of support that a company receives and the timeline on which it’s delivered. This also changes the investment mechanics around that resource which gives us greater flexibility to customize deal structures for a broader spectrum of companies. How it breaks down:
1. Module 1: Assessment and Enabling Infrastructure
This module is all about creating a strong foundation for the future. Oftentimes what a company ends up with after its first phase of growth is a messy hodgepodge of people, approaches, and assets. For this module, the RevUp team conducts a top-to-bottom assessment of a company’s growth engine, current capabilities, and enabling infrastructure to identify gaps, strengths and opportunities. From there, we work with the team to make smart and efficient decisions on how to sequence improvements and get that work done quickly and cost-effectively. Most important, this work produces 3-5 Growth Hypotheses—big impact ideas that can significantly bend the growth curve and inform what comes next.
2. Module 2: Design / Test / Measure
When a team is ready and able to move into active experimentation, the RevUp team designs experiments to test each hypothesis established during the assessment phase. Using deep domain expertise, best-in-class tools, and a science-driven methodology the RevUp team works in tandem with a company’s marketing and sales resources to execute these experiments and provide the data and insight needed to act fast on growth opportunities and effectively resource them moving forward.
3. Module 3: Scale / Transfer
Confidently knowing what to do is only as good as a company’s ability to put that knowledge into action. In this module, the RevUp Team takes the lead on helping investees build scale and execution capability around winning ideas. From raising capital to making a new hire, we make sure companies build on what’s been done and keep growing.
As we head into a new year, we are excited for the flexibility to deliver this resource in a more segmented, customized way. For more on what we've learned along the way and other changes we made for 2021, check this out.
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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.
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