By: Rebecca Strong
Betaspring has a long history of helping to fuel the growth of early-stage companies. Founded in 2009, the Providence, R.I.-based program has served 89 companies in total—at least half of which have Boston roots—and its portfolio has raised a total of $50 million in follow-on funding. Over the years, the team identified an overarching trend in the philosophy of startup investing: that it basically boils down to “go billion or go home.” Moreover, Betaspring noticed that a fixation on exits can lead to a lot of missed opportunities to nurture high-potential ventures. So they came up with an alternative approach: RevUp, a new accelerator in Boston’s Financial District designed specifically for companies where growth through revenue is the main goal. Unlike most accelerators, RevUp doesn’t take equity: Instead, participating companies return the investment as a percentage of their revenue as it scales over a 36-month period.
Unlike most accelerators, RevUp doesn’t take equity: Instead, participating companies return the investment as a percentage of their revenue as it scales over a 36-month period.
“The world is missing something big by using a model that requires outsized exits to drive returns,” said Betaspring co-founder Allan Tear in a press release. “There’s more than one way to build profitable companies that make founders and investors happy. “
All companies who take part in the three-month RevUp program, which is focused on increasing customer acquisition, receive $75,000 in investment. And there are a number of factors that make RevUp unique. For one, this program deals with companies that are already generating revenue. But this has nothing to do with unicorn hunting. Since the model doesn’t depend on exits, RevUp can expand the types of companies it works with. And RevUp creates more options for early stage companies that have chosen to delay or forgo equity-based investment, or that have been underserved by VCs.
“Not every company nor market opportunity is compatible with angel or venture funding,” said Dyn founder and CEO Jeremy Hitchcock in a press release. “The world needs additional flavors of funding, and I'm glad to see Betaspring help make it happen."
Managing director Melissa Withers told BostInno in an email that another differentiator is that RevUp is accelerating the first cohort on a rolling basis. The six to eight companies accepted will interact with one another, Betaspring alumni, RevUp mentors and the Betaspring leadership team as a group as well as solo in both Boston and Providence. The RevUp accelerator adheres to a six-step process to help companies build internal and external resources necessary for growth. Withers added that RevUp is conducted more in a one-on-one format than big group sessions. One thing that won’t change, though, are Betaspring’s Boston startup showcases, for which the company usually gets space at District Hall or the CIC.
RevUp creates more options for early stage companies that have chosen to delay or forgo equity-based investment, or that have been underserved by VCs.
Additionally, RevUp has the potential to be beneficial for investors eager to engage with fast-growing companies free of the equity system’s limitations.
“RevUp’s model opens investors to a new stream of companies—those with the potential to be very profitable, but don’t rely upon an exit to generate a return,” said investor Bill Cesare, who is partnering with Betaspring to bring RevUp to the market, in a news release. “RevUp is a major innovation to how investors seek return on early stage investments, and a powerful way to help more founders be successful.”
RevUp is currently accepting applications for the program, and will be accepting companies on a rolling basis between June 2015 and January 2016. The program is seeking technology-enabled companies—including in SaaS, software, e-commerce and consumer products— that are generating $10,00 to $15,000 per month and show significant growth potential.