Happy ReveNew Year 2023
8 years and 7 funds later… what’s good?
To watch or to read? It's viewer's choice! In this video letter, Managing Partner Melissa Withers talks about RevUp's investment approach, outcomes for investors, and why RevUp's work to support founders from all walks of life is just beginning.
Rather read? Here is a transcript:
Happy ReveNew Year 2023! I’m Melissa Withers, managing partner and cofounder of RevUp Capital.
It’s hard to believe that it’s been 8 years since my partners and I created RevUp. For context, 8 years ago my son was in second grade. This morning, just a few hours ago, he drove himself to school. CRAZY. Where does the time go?
Today I am excited to announce the formation of our 2023 Fund, our 7th since 2016.
My partners and I created RevUp after working for many years as equity investors. We wanted to break free from the "exit or bust" constraints of the equity-only model and develop a way to invest successfully into a much broader spectrum of companies.
I’m grateful (and probably also a little lucky) that it worked. And it worked well. After 6 funds and nearly 50 investments, we’ve delivered excellent results to our investors.
More Importantly, we've invested into an incredible portfolio of companies, run by Founders who I couldn't be more proud to support.
We have done well by our investors. RevUp funds have a blended IRR of 20%+ across six funds. Because of how our model works, these are actual results, not speculative aspirations for what might lie ahead.
But that's not the only thing that got me excited to talk about our new fund today.
As a female fund manager, and as the first person in my family to graduate college, it's so important for me to do what I can to fight against the bias and inequities embedded into the venture system.
Since 2018, 70+% of RevUp investments have been into companies led by a woman or person of color. And many of those that weren't, were investments into founders who are building their businesses outside networks of privilege.
These are founders that don't have the benefits of pedigree. They aren't building their companies in top-tier markets. They don't have access to a network of wealthy friends and family, and they can't self fund with personal wealth. But that has not stopped them from building big, successful companies. These are our people and it's an honor to be a small part of their journey.
None of this would have been possible without our investors. Especially those who took a risk on us years ago a before we had proven results to prop ourselves up with. it's incredible to think that 70% of rev up investors have invested into more than one fund. you know who you are and I am grateful everyday for your support.
Effective immediately, Fund 2023 is open and will accept a small number of new investors through the end of february. If you're interested in learning more about that opportunity you can just skip ahead and find some links on our site that will set you up with info you need.
But if you've got an extra minute and you'd like to know a little bit more about how we operate then keep watching cuz that's what i'm about to do
So how does the rev up model work?
It's pretty simple: Rather than take equity in a company, we use revenue contracts to generate investor returns. Post investment, companies return a small percentage of revenue over time, until reaching a predetermined cap.
Every kind of capital has pros and cons, and revenue-based funding is not a silver bullet to solve every funding problem that a company may face. But for where we fit in the market, our model is a great way for Founders to get world class strategic support, an infusion of cash, and to get it without facing dilution in the ownership of their company.
For investors, our model also has unique benefits, including a quicker turn on capital and more rapid liquidity. RevUp funds show actual cash returns much earlier than alternatives, with cash beginning to return to investors in year 2.
For Founders and investors alike, this model has special benefits during times of economic uncertainty. times like the ones we face now.
The flexibility of our model enables us to invest into a broad range of companies, secure high-quality deal flow, and perform well even during turbulent times. The RevUp model trades “shoot for the moon” opportunities for a more predictable return curve, while still delivering a high IRR and competitive cash-on-cash returns.
And as valuations drop in the market, our model gives Founders access to vital resources at a time when the cost of equity has skyrocketed.
And not to be forgotten, our mission to invest into founders overlooked and underserved by Venture Capital is more important now than ever. We create lasting economic impact by supporting founders who are building their businesses outside networks of privilege. These founders produce excellent results for investors while delivering products and services the world wants and needs. And in many cases produce wealth for themselves and their families.Something that is often long overdue
I conclude by saying thank you. If you are already an investor, or considering becoming one, thank you for supporting a women-led fund. Thank you for supporting me. And thank you for empowering us to invest into companies and founders we can all be proud to support.
I hope that 2023 is a good one for you and your family and your business and your dreams and everything else that comes with being a human, alive on this fragile earth at this moment in history.
Thank you.
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For more information about RevUp's Athena Growth Fund 2023, check this out.
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 revenue-based model. 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 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. More at www.revupfund.com