Is it a startup or small business ? In my book a startup expects to scale and hosting bare metal HW in an office with 5 people means you have to figure everything out again when you get 20/50/100 people - IMO not worth the effort and hosting hardware has zero transferable skills to your product.
Running on managed bare metal servers is theoretically the same as running any other infra provider except you are on the hook for a bit more maintenance, you scale to 20 people you just rent a few more machines. I really do not see many downsides for the build server/test runner scenario.
Every business wants to scale, not many do. There's no real difference between a startup and a small business, except perhaps how strong or realistic the dreams are.
Consider that even VC-backed Google started out with lots of cost saving measures in place. Once they brought their second datacenter online, the way they uploaded the index to it was Lucas putting a big stack of hard drives in the boot of his car and driving across the USA to plug them in. This continued for a while until they were able to strike a special deal on bandwidth.
That was just one of the unconventional things they did to save money. Using Linux was another. Although we now think of what Google did as obvious, at the time it was considered bizarre and radical that a search engine company - a software company - would rack bare motherboards onto corkboard bases, just to save money. All their competitors were running on commercial UNIX big iron.
Running on managed bare metal servers is theoretically the same as running any other infra provider except you are on the hook for a bit more maintenance, you scale to 20 people you just rent a few more machines. I really do not see many downsides for the build server/test runner scenario.