With Venture Capital Investing as a Hammer, Every Startup Looks Like a Nail. Melissa Withers and RevUp Capital Offer a New Way to Build.

When Melissa Withers began her career in professional investing, she didn’t have any role models. Sure, she had mentors and advisors—men who offered advice and guidance—but there was no one in whom Withers saw herself, no mirror in whom she could see her own future. Almost a decade later, there still isn’t, really. But now, she’s in a position to do something about it. 

The field of professional investing is infamously male-dominated, and the founders who win funding from such firms even more so. Women comprise less than 20 percent of C-suite positions in private equity and alternative investment companies, and companies founded by women receive less than three percent of venture capital funding spent in the U.S. (While venture capital isn’t the only form of investment funding available to startups, it represents a significant portion of the financing poured into new companies in the country.) 

“When I went into professional investing, there were not many women at all—and that’s only just begun to change,” says Withers, who graduated from Northeastern University’s College of Science in 2002. “As a consequence, I’ve always been able to use that as a motivator.” By 2016, Withers says she was fed up “with the ways that the field was reinforcing gender and racial inequity.” 

Withers created RevUp Capital, a revenue-based investing firm, to change all that. And, since 2016 when it launched, RevUp has funded more than 50 companies, close to three-quarters of which are ventures led by women or people of color. 

RevUp was groundbreaking for its time, among the world’s first revenue-based venture companies, says Withers, who serves as one of its managing partners. Rather than offering one lump sum in exchange for shares of the company, as most venture capital funds operate, Withers designed RevUp to be a partner for the long haul. 

The model works like this: RevUp invests in business-to-business (B2B) and business-to-consumer (B2C) companies that are ready to scale up. RevUp invests cash and capacity to take a company from its first million dollars in revenue to $10, $20, or $30 million—a period of growth that often requires different skills and strategies from the road to the first million. In exchange, RevUp investors receive a small percentage of the venture’s revenue over time until it reaches a predetermined cap. 

This means that small- and medium-sized business owners get an infusion of cash and strategic support without giving up ownership of their companies. It also means that RevUp investors are truly invested in the health of the company because its wins are their wins.

It’s a drastically different model than the reigning venture capital structure, which favors fast-growing, so-called “unicorn” companies that can be sold off quickly to make a fortune above all else. Venture capital investors get their returns when the companies in which they invested sell to the highest bidder—and the value of their shares skyrockets. Withers describes this as the “exit-or-bust constraints of equity.” 

“The venture system is pretty notorious for benefitting investors over owners,” she says. “We started RevUp to do it differently.” 

Withers’s success in doing it differently won acclaim from the judges of this year’s Women Who Empower Innovator Award competition, organized by the Office of University Advancement at Northeastern. 

This year, organizers recognized 28 innovators (out of more than 100 who applied) with financial and entrepreneurial support. The winners received a portion of the organization’s largest total prize ever—$500,000—as well as a place among a global network of women who are creating, running, and iterating on ventures across myriad disciplines and business sectors.

To date, Women Who Empower has recognized 69 entrepreneurs with Innovator Awards over the course of three years, and has dispersed close to $1 million to three cohorts of incisive, creative entrepreneurs.

For other female founders, Withers’s guidance, and indeed her mere presence, is a source of support. Amy Jackson, CEO and co-founder of the healthcare provider compensation platform Statera, counts herself among those whom Withers has impacted. 

“Without her, I don’t know if our company would be around today,” Jackson says. The women met during the two years that Withers was mentor in residence at TechStars Boston—a role she held while running RevUp. Jackson says Withers (who now sits on Statera’s board of directors) offered hard-earned advice and guidance from day one, more than once helping Jackson avoid pitfalls she might never have otherwise seen coming. 

“You don’t know what you don’t know,” Jackson says. “I knew that starting a company would be a lot of work, and that I would have to be gritty and determined, but there’s so much more that goes into it. And Melissa offers tough love—she’s not going to tell you the easiest things to do, but what she says is going to get you over those potholes and onto the right path. Every step of the way, I would’ve been lost without her.” 

For Withers, who admittedly stumbled over many of those early potholes herself, helping to guide other women in the startup and investment fields has been worth the struggle. 

“I’ve lived long enough to see that change, and I do get a special kind of gratification and fulfillment from helping to fill in the gaps where I spent a lot of time flopping around,” she says. “It’s nice to be able to point out a pothole to another female entrepreneur before she runs into it. Because otherwise, you’re just faking it until you make it, and as someone who’s had to do that, I really can’t overstate the effect it has on a person over time.”