I was faced with this issue while switching between Mac and Ubuntu develpment environments. After switching to Ubuntu I recieved the RVM is not a function message.

Someone mentioned that the issue had to do with text editor settings. I was using Guake, so I switched to standard the Ubuntu terminal. This did not solve the problem.

I checked Run command as a login shell in the standard terminal, restarted the terminal, and it worked.

I repeated this process with Guake and continued working.

REMEMBER: You must restart your terminal for the changes to take effect.