Scale What Works Today
Back proven profitable solutions that need capital to reach mass adoption
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 7
- Confidence
- 92%
This framework focuses impact investing on solutions that already work but remain too small to affect system-level targets. The investor starts with an urgent outcome, such as emissions reduction or soil restoration, and identifies profitable mid-market businesses with proven products or techniques. Commercial validation and sound unit economics reduce technology risk, while founder intent confirms that the company needs expansion capital rather than a buyout. The investor then takes a minority position, strengthens the balance sheet, and funds a defined scaling plan. Success is judged by both business expansion and the mass adoption of the underlying solution, eventually positioning the company to access broader bank or capital-market financing.
Origin
Extracted from Masters in Business, where Mathieu Chabran explained TKO Capital's minority growth investments in profitable climate and regenerative-agriculture companies whose proven solutions needed capital to scale.
Core principles
- 01Prioritize deployable solutions over distant technological promises
- 02Require evidence that the concept works
- 03Use profitability as a signal of commercial viability
- 04Supply growth capital without forcing a founder exit
- 05Target sectors where scaling produces material real-world impact
How to run it
- 1
Define the urgent outcome
Specify the environmental or social result that requires materially broader adoption.
Pro tip Choose an outcome with measurable system-level relevance.
Watch out A fashionable theme is not a substitute for a defined result.
- 2
Find proven solutions
Search for businesses whose products or operating techniques already work in commercial settings.
Pro tip Look beyond highly financed technology categories to overlooked small and mid-cap operators.
Watch out Do not confuse a promising pilot with a repeatable solution.
- 3
Validate commercial strength
Review profitability, unit economics, customer demand, and the durability of the company's advantage.
Pro tip Use profitability as evidence that scaling can reinforce rather than consume economic value.
Watch out Impact claims cannot repair structurally weak economics.
- 4
Diagnose the growth constraint
Confirm that additional capital, rather than absent demand or poor execution, is the principal barrier to expansion.
Pro tip Map capital directly to capacity, distribution, hiring, or geographic growth.
Watch out Funding the wrong bottleneck will not produce scale.
- 5
Align with the entrepreneur
Structure a minority investment for founders seeking expansion rather than a sale or leveraged change of control.
Pro tip Agree on governance and growth milestones while preserving entrepreneurial ownership.
Watch out A mismatch over control can derail the scaling partnership.
- 6
Fund mass adoption
Deploy capital against a concrete plan for expanding the proven solution into more sites, customers, or markets.
Pro tip Stage capital against observable execution milestones.
Watch out Growth without quality controls can degrade both economics and impact.
- 7
Graduate the business
Build the scale, reporting, and financial profile needed to attract larger bank or capital-market funding later.
Pro tip Prepare institutional data and governance before external financing becomes urgent.
Watch out Dependence on repeated specialist equity rounds can limit long-term scale.
In the wild
TKO targeted profitable mid-market companies in low-carbon mobility and building energy efficiency. These businesses were not being acquired through leveraged buyouts; they received minority growth capital to expand solutions already capable of reducing emissions.
→ Proven climate solutions gained the balance-sheet capacity needed for broader adoption.
The firm looked for profitable small-cap companies with proven soil-fertility techniques that sat between land investing and heavily funded agri-tech. A minority investment could help them reach a scale where bank and capital-market financing became available.
→ Specialist growth capital bridged an underserved financing gap for soil-focused businesses.
Common mistakes
Funding only distant breakthroughs
Long-horizon innovation matters, but exclusive focus on future technology can neglect solutions capable of producing results now.
Assuming every constraint is capital
Additional funding will not solve weak demand, poor economics, or execution failures.
Forcing a buyout structure
Entrepreneurs seeking growth capital may resist control transfers or leverage that conflicts with their objective.
Is it for you?
Best for
It is best for profitable founder-led companies with validated solutions, measurable impact, and a clear capital-constrained route to scale.
Not ideal for
It is not ideal for speculative concepts without commercial proof or mature businesses whose growth is constrained by demand rather than capital.
From the transcript
“it's more important to find what works today and needs to be massified,”
“Those guys are not looking to sell the company, they need the capital in to scale.”
“these small cap businesses with the proven concept and profitability, and they need this capital, you know, to scale.”
From the episode
Mathieu Chabran on Using Creativity to Compete
Mathieu Chabran