What Makes a Startup Ready for Investment

On this episode of the Private Equity Value Creation Podcast, Shiv Narayanan interviews Mark Buffington, CEO at BIP Capital and Managing Partner at BIP Ventures

Learn why the concept of permanent capital from a multistage fund might be a better long-term approach to funding a startup. Mark explains how not all measurements of success are based on the financials, and how that might look different for different companies. Plus, learn how financial engineering might negatively affect a business for long-term thinkers.

What Sets BIP Capital Apart as a Partner for Founders

When founders are evaluating potential partners, one of their core considerations is whether an investor can truly help create value. At BIP Capital, creating value is about more than just providing capital—it’s about solving real business problems side by side with the founders. That’s why BIP Capital approaches every relationship as a partnership rooted in problem-solving. While no investor can claim to have every answer, BIP prides itself on tackling challenges with founders, particularly in the critical early stages of growth when obstacles can seem daunting and setbacks inevitable.

The firm places great importance on the human element of partnerships. During the diligence process, BIP Capital carefully assesses not only the business but the people leading it. They seek founders who approach challenges with resilience, adaptability, and a willingness to learn. When both parties are committed to finding solutions, even the most difficult challenges can become opportunities for growth and innovation.

BIP Capital’s strongest differentiator is their experience and track record. Having “been there, done that” for over 20 years, they bring deep expertise and a history of successful investments. Their high “batting average” demonstrates their ability to guide businesses through complex growth paths and deliver lasting results.

Beyond their experience, BIP Capital offers flexible capital. Unlike firms that are limited by large fund sizes requiring them to make only huge investments, BIP Capital adapts their investment size to fit the unique needs and growth trajectory of each business. This flexibility ensures that their support is customized and aligned with the founder’s goals.

Identifying Inflection Points for Follow-On Investment

When helping a business mature and progress through key growth stages, BIP Capital looks for inflection points that indicate a readiness for follow-on investment or another leap in scaling. The journey of growth isn’t linear; there are critical milestones that signal a business is ready to move to the next level. These moments of progression guide BIP Capital’s strategy, ensuring that their support aligns with the company’s evolving needs and potential.

A primary goal for BIP Capital is to recognize these signs of progress before the broader market does. Once a company demonstrates delighted customers and a predictable revenue model, it’s a clear indication that it’s maturing into a strong, scalable business. Predictability might come from metrics like repeat customer behavior, low churn, or consistent revenue growth tied to specific customer acquisition activities. For instance, in the case of a healthcare-focused company, BIP Capital might see clear traction when signing up physician offices translates predictably into tool usage, generating assessments and, ultimately, downstream treatment revenue.

When all the pieces of the revenue engine are working in harmony—customer acquisition, product usage, and revenue generation—BIP Capital moves quickly to inject further capital into the business. The aim is to accelerate growth and seize the opportunity while the business is still under the radar of broader markets. Waiting too long to act could mean that others catch on, driving up the valuation and cost of further investment.

This proactive approach to identifying inflection points allows investors to help founders capitalize on momentum, scale more effectively, and strengthen their market position—all while ensuring that they continue to be strategic partners in their growth journey.

Building Foundations Before Scaling

Growth-driven companies often feel the urge to move quickly, diving into revenue-generating activities before laying the groundwork necessary for long-term success. Skipping crucial steps, or “putting the cart before the horse,” can lead to failed initiatives and missed opportunities. Worse yet, it can cause an entire domain of activities to be dismissed as ineffective, when the real problem was a lack of preparation. Success is as much about the order of operations as it is about ambition.

This is why patient executives and investors are critical partners in growth. They recognize that value creation takes time and that foundational work must be completed before scaling can occur. As Mark explains, it’s a bit like building a house—you need to install the plumbing and electrical systems before putting up the drywall. Ignoring this sequencing can lead to rushed, poorly thought-out decisions that require costly fixes later on. The journey to understanding this balance isn’t always easy. At times, it involves hard lessons born from real-world challenges.

When traction seems slow, it’s often a signal to reexamine whether the fundamentals are truly in place. Are we measuring what really matters? Have we built the underlying systems to support growth? Over time, BIP Capital has developed a framework that helps track progress against strategic bets and ensures that foundational work is prioritized when necessary.

Sometimes, the first step isn’t about financial growth—it’s about creating the structure that makes growth possible.

Check out the full conversation with Mark👇

Private Equity Value Creation is a podcast about the innovative approaches leading investors, operators, advisors and bankers employ to drive sustainable growth and create enterprise value. Hosted by Shiv Narayanan.

Follow us: Apple Podcasts | Spotify | Amazon Music | YouTube