Our Investment Process

Our Investment Criteria

Battery Point Capital is an investment-oriented family office, formed to make control-oriented buyout investments in established lower middle-market U.S. companies as well as earlier stage, fast growing companies that are not yet profitable.

We prefer to make growth equity investments, both minority and control, in the following company types:

  • Companies in the following sectors: Manufacturing & Distribution, Business Services, Food & Beverage, Software, Technology and IT Services and Digital Media & Advertising.
  • Software Companies: we invest in growing (generally bootstrapped) software companies with developed business models and demonstrated growth potential. We look for a high percentage of recurring revenue, high gross margins, high customer lifetime value (CLV) and low customer churn.  We focus on growth potential rather than company size, but we generally require that a company has achieved product-market fit and has a clear plan to scale.
  • Traditional Companies: for established companies in other sectors (manufacturing & distribution, food & beverage, business services etc.), we seek a minimum $2 million of adjusted EBITDA and $5MM of revenue, but we will also consider fast growing but still unprofitable companies
  • While we prefer a management team prepared to work with us for a period post investment, we do have the ability to staff complete executive management teams in most cases.

Building Sales & Marketing

By far, the leading reason companies raise capital is to invest in sales and marketing. Once product-market fit is established, companies should be focused on building a great sales and marketing process.

In our experience, this requires companies to leverage the most relevant marketing channels and marketing technology in order to scale.  Whether this is executed via outsourcing or by building teams and processes internally is company specific – both approaches work, though we prefer outsourcing.

  • Companies should be building a company-specific sales process supported by strong software platforms that make closing sales, onboarding salespeople and scaling much easier
  • Companies should be building a company-specific marketing process that is measurable, scalable, and focuses on the most important channels and sources of customers
  • Companies should have a very clear idea of their various customer journeys and build a marketing plan that addresses every step of that journey

Sales & Marketing – Frequently Asked Questions

Most of the companies we speak to spend far too little on sales and marketing (between 0 and 5%).

Your spend will depend on the opportunity – larger markets with good opportunities and low competition demand a budget of 20% or more of revenue for sales and marketing.

The rule of thumb for established and/or smaller companies ($5mm or less in revenue) is 5-10% of revenue should be allocated to sales and marketing efforts.

For faster growing companies (30% or more YOY growth), it is not uncommon to see budgets of 30-50% of revenue.

  • SaaS companies often spend anywhere from 80 to 120 percent of their revenue on sales and marketing. It then plateaus around 50 percent from year five on.

  • High-growth technology businesses spend 25 to 45 percent of revenues on sales.

  • A new product launch can boost sales and marketing costs to 30 percent for a small business, while the steady state spend is 10 to 20 percent of revenues.

  • High revenue/low margin companies can plot their spend goals against cashflow.

We are major proponents of outsourcing sales & marketing for most of our portfolio companies, at least in the early stages. The complexity and execution risk in the modern go-to-market effort is substantial, and the requisite talent to execute is simply too hard to find.

Even for larger companies with substantial revenue, we have pushed out the horizon on bringing sales and marketing in house.  Better to allocate that capital to professional support, onboarding, training new clients etc.

For marketing to be effective, it needs to be innovative and engaging, so relying on your own staff will only get you so far. Outsourcing connects you with marketing agencies that can stay on top of new technology and trends.

In a perfect world, a company would have a clear idea of how they would allocate the capital we might provide.  The level of detail in your plan will vary by industry, but here are our general views:

  • Have a plan for which positions you will seek to fill over the investment cycle, how you will hire them, what those people are expected to deliver, how you will measure their success, etc.

  • Website should be ready to serve as an assistive platform for your go-to-market efforts and facilitate a robust and rapid customer journey.

  • Have some experience with the basic elements of the sales tech stack and martech stack that are relevant to your go-to-market efforts.

  • Have a firm grasp of your key metrics – CLV, CAC, Churn Rate, etc.

  • Know which marketing channels you plan to invest in, based on direct experience.

  • Have a game plan for investing in a content strategy based on experience and/or reasonable predictions.

  • Be able to discern between your top-of-funnel and bottom-of-funnel marketing efforts and attendant budget need.

  • Have a proven sales process that enables/accelerates the purchase cycle.

In 2020, after countless interviews with external agencies, we decided to create a joint venture with a leading database company and a leading paid media company to deliver services to our portfolio clients. 

We now have substantially more control over the fate of our investments and can deliver best-in-class services to our companies. The specialists working with our clients have decades of marketing experience.

This joint venture is focused on delivering value in the core tasks and marketing channels as we see them – SEO & content marketing, web redesign, email marketing, paid search and social media marketing.

Growing via Acquisition

At Battery Point, we often provide capital for acquisitions and we have extensive career experience in increasing the valuation of a business via M&A driven growth strategies. We are able to help our partners drive value via acquisition through the following advantages and experience:

M&A execution is our core skill. Because acquisitions are our expertise, we often focus on acquisitions to add on to our existing portfolio companies whenever possible. We have extensive in eliminating overlapping costs post acquisition, allowing our portfolio companies to concentrate on growth opportunities.

We understand the need for thorough due diligence & research. We understand that much of our return on investment in an acquisition-based strategy is based on an ability to acquire businesses in the best way possible from the start and to minimize their risk. We are aggressive in sharing our M&A experience with our portfolio companies, providing them substantial help in identifying acquisition targets that fit their criteria.  Prior, we help perform substantial industry and competitor research as well as generate valuation estimates. We can also help our companies identify underperforming businesses that can be improved through better management and proper investment in critical areas.

We are experienced in the upgrade. As soon as an acquisition is completed, we help our partners establish strong financial controls, internal reporting, eliminate unprofitable units, streamline operations, and help management to identify operational inefficiencies. We also know the importance of having excellent software and IT operations and encourage our partners to move quickly to upgrade to the best available solutions that provide enhanced business analytics to support better decision making.

We can help with use of appropriate leverage. We help our partners access debt capital to fund an acquisition strategy, as leverage sets up a much higher internal rate of return (IRR) in the long run while also allowing our companies to consider large, transformative acquisitions.  As important, we understand how to leverage the balance sheet of the target acquisition to close larger acquisitions.

Minority Equity Investments

As a growth equity investor, minority positions are more the rule than an exception, so we are prepared to work with companies to create investment structures that fit best with their objectives.  In fact, we see minority investments as potentially more advantageous than control stakes for the following reasons:

Better investments: Companies selling minority stakes often have more attractive growth prospects, specific expansion plans, and clear roadmaps for investing the capital raised

Confidentiality and reduced execution risk: Sellers often don’t want to publicize their desire to attract a third-party partner and sell a minority stake, fearing adverse publicity and customer fallout if the transaction fails. Unlike the vast majority of control deals, minority deals are typically not consummated through formal auctions.

Competitive advantage for patient capital: Minority stakes usually provide early participation in the growth of companies, and allows us to build relationships with owners rather than simply participating in a public auction. Investing in building relationships with family owners and senior managers takes time and effort, but we have learned that all the calls, meetings, and industry conferences eventually pays off.


We do consider a variety of factors and take certain steps when making minority investments:

When they work: Minority ownership interests can work well when the key means of value creation are related to top-line growth and governance. These include facilitating organic or inorganic cross-border growth, professionalizing management teams and processes, enhancing governance, and consolidating fragmented sectors.

When they don’t: Minority investing can become problematic, however, when the investment thesis hinges on activities such as creating value through restructuring, improving operational performance, cost cutting, and supply chain initiatives. In these instances, majority ownership and a hands-on, control-oriented approach are often more appropriate.


Recruiting Talent

Don’t let business strategy be developed absent a thoughtful conversation on what talent needs you will have over the next months and years to execute on the strategy. In our experience, HR is too often trying to catch up to the staffing needs rather than having a measured plan in place to achieve hiring targets.

We have a process – We can conduct a thorough review of the hiring needs required for scaling

    1. Identify Organization Goals & Requirements
    2. Sourcing And Attracting The Talent
    3. Recruiting And Selecting The Talent.
    4. Employee Retention
    5. Promotion
    6. Performance Appraisal


Giving an unbiased view of your current team – We can see things that you cannot and can help identify key positions to be filled

Using our Rolodex – Recruiting specific players from our existing contacts and relationships to fill key posts

Getting your compensation scheme right – we can help create and implement a robust compensation program for your existing and potential C level executives

Evaluating leadership at add-on acquisitions – Due diligence of the C suite talent at potential acquisitions

Scaling the Business

When companies grow, they are increasing their revenue equally as fast as they are adding resources to enable that increase. When companies scale, on the other hand, they add revenue at a faster rate than they take on new costs. When establishing a scaling strategy for your business, you should have the following long-term goals in mind:

  • An established value ladder of products/services
  • Available subscription packages
  • High customer retention rates
  • Diverse income streams
  • Predictable revenue


Standardizing your processes: Scaling requires you to move beyond the start-up phase and standardize workflows so that they’re able to cope with increased market demands.  Leveraging technologies and full-suite solutions (i.e. QuickBooks) can help business owners grow their company while saving time and keeping upfront costs low.

Aside from automation, standardizing your business processes is another essential element of scaling. When you bring in new team leaders and middle managers, you must document and distribute a clear set of instructions to the personnel responsible for handling a certain activity.  These instructions should be repeated regularly and will ultimately convert an otherwise complex task into a structured regimen. Whenever confusion arises within the team, they can refer to the process checklist rather than you.

Identifying core competencies: To operate at scale, business leaders need to concentrate on mastering the company’s core competencies. For example, in every company, there are daily or weekly tasks that generate more leads and greater revenue than others. These are the tasks that must be prioritized on your business’s schedule, as they are the ones that stimulate growth.  Knowing how to scale a business begins with being able to identify where you offer the most value to clients and customers and aggressively ramping up those specific operations. We can offer a fresh perspective and key insights in this regard.

Leveraging equity: To execute your plan, you need funding to leverage and complement your equity capital. We have extensive experience in securing funding for small businesses, some that are standard, some that are new to the market – traditional term loans, short-term loans, business lines of credit, SBA loans, invoice financing, recurring revenue loans (based on MRR or ARR), etc.