The HoldCo playbook

Roll-ups like Thrasio use debt to buy already-profitable businesses

Shaan explains the capital efficiency of e-commerce roll-ups: Thrasio reached a planned $10B exit in ~3 years by financing acquisitions with large amounts of debt, which works because the target companies are already profitable and producing revenue.

“3 years old and very capital efficient how they went there because they used a lot of debt to buy these companies because the companies already are profitable or producing a lot of revenue. So they're able to use big debt to do this. And so Open Store is doing the same thing without the Amazon style. It's for Shopify..”

$25K in Blockbuster's 1987 IPO became ~$1M at sale

Sam notes that a $25,000 investment in Blockbuster when it went public in 1987 would have been worth about $1 million by the time Huizenga sold it to Viacom in 1994 for $8.5 billion.

“And if you would've invested $25,000— and so he would let some friends invest— and if you would've invested $25,000 into Blockbuster when it went public in 1987, it would've been worth about $1 million when they sold.”

The roll-up: buy the guy with 3 or 4 trucks instead of building

Sam quotes Huizenga's biography on the consolidation playbook: it's easier, faster, and cheaper to buy an already-established small operator in a market than to organically build there, then layer your own salespeople on top for internal growth.

“We made small acquisitions in different states around the United States. It was just easier, faster, and cheaper to go in and buy out a guy who was already established in a market, even if it was very small. Then I'd hire a bunch of salespeople to go out and do the internal growth.”

Steal thisTo enter a fragmented market, buy a small established operator there rather than building from scratch, then bolt on your own sales engine.

Roll up fragmented local businesses to build a billion-dollar empire

Shaan argues a roll-up of fragmented local businesses (vets, pet cremation, rural wireless ISPs, self-storage, landscapers, pool companies) is one of the more intriguing and lower-risk paths to a huge company, far easier than building the next Facebook from scratch.

“And so I think this roll-up strategy is one of the more, I would say, intriguing ways to build a monstrous empire. Otherwise, you kind of got to build a, you know, build a Facebook, build a YouTube. It's very hard to build a multibillion-dollar individual company from scratch. I think it is far easier to execute one of these rollups and create, you know, $100 million, create even a billion dollars of value in, you know, 5 to 10 years.”

Steal thisPick a fragmented local industry with no trusted national leader and roll up dozens of mom-and-pop operators into one brand.

Billy of the Week: Wayne Huizenga, the three-empire roll-up king

Shaan crowns Wayne Huizenga the Billy of the Week for an extraordinary career building Waste Management, Blockbuster, and AutoNation plus owning the Miami Dolphins and Florida Marlins.

“Yeah, this guy's definitely the Billy of the Week. Extremely impressive career. You know, shout out to this guy. He looks like he passed away a couple years ago at age 80.”

The secretive Brazilian billionaire who owns Burger King, Budweiser and Heinz

Andrew Wilkinson's Billy of the Week is Jorge Paulo Lemann, the press-shy Brazilian behind 3G Capital, who buys old, simple, multi-generational brands using piles of debt and runs them better.

“if you think about the businesses that he owns, uh, you would know them. So for Burger King, Budweiser, Tim Hortons, Kraft Foods, Popeyes, Heinz Ketchup, right? So he basically goes out, he finds these amazing, you know, multi-generational businesses that have been around for 50+ years that do something very, very simple. It's just going to grow over time. He goes out, he usually raises a ton of debt, and then he goes and buys them and takes them over.”

The third-generation buyout: catch a great brand once it gets sloppy

3G's playbook: target proven, simple businesses run by a complacent third generation that has gotten rich and lost discipline, then buy with debt and tighten the operation.

“When they bought Budweiser, it was on the third generation. They'd gotten super rich, right? So it was like the first generation built it. The second generation, like, were amazing. They went to Harvard, they grew it. The third generation took over. They got sloppy, didn't really care about growth. They had fancy offices and private jets and stuff. And so when they bought it, they just look at it and go, oh, it's been run in a kind of a sloppy way and they've lost their discipline. We can buy it with a lot of debt and then we can just make it way better, pay off our debt, and then we own Budweiser.”

Steal thisHunt for proven brands run by a complacent third generation, buy with debt, and win by simply restoring operational discipline.

Deals are easy; finding leaders to run them is the bottleneck

Wilkinson says the hard part of a holding company isn't doing deals — he could do one a month — it's finding and validating enough amazing people to run each business. The real skill is being a 'leader of leaders' (the Warren Buffett playbook).

“The hardest part is recruiting the amazing people. Like, our biggest challenge isn't doing deals. It's like, we could do a deal every month. It's How can we find enough amazing people to run all these businesses? And then how can we validate that they're going to be able to do what we need from them?”

Brad Jacobs: the man who started 5 billion-dollar companies

Sam profiles Brad Jacobs, who started his first company at 23 and built five companies that went public or topped a billion dollars, running the same acquisition playbook across oil, waste, equipment rental and logistics while buying 600-700 companies.

“And this person is super interesting because they have started, uh, 5 companies that have either gone public or are worth over a billion dollars. He started age 23, he's 64 now. Uh, Google him, Brad Jacobs. He's worth somewhere in the range of $3, $4, $5 billion, and he's bought or in both. He doesn't like invest passively like a venture check. They buy companies and he's bought something like 600, 700 companies and he's done it across a variety of industries and he's done the same strategy over and over and over again in different industries.”

The four types of entrepreneur: innovator, remixer, scaler, optimizer

Andrew Wilkinson breaks founders into four archetypes using Chipotle: the innovator who rolls the first burrito, the remixer who builds the brand, the scaler who rolls it out to 100 locations, and the optimizer who maximizes an existing machine. Jacobs is the classic scaler.

“I always think there's like, um, 4 different types of entrepreneurs, right? There's the innovators. So let's just take, let's take, um, Chipotle as an example, right? So there's the innovator, there's the guy who rolled the first burrito and was like, oh shit, this tastes really good. Um, then there's the remixer. There's the person who creates Chipotle. They take the burrito, they package it up, they create a brand around it. Then there's the scalers, the person who scales Chipotle to 100 locations. And then there's the optimizer, the person who just sits on top, makes sure it doesn't blow up and gets as much as possible, gets as much juice out of the lemon as they can.”

Steal thisFigure out which of the four founder types you are, then build or buy in the lane that fits you.

Jacobs' rollup recipe: buy a $30M business, add 30-40 bodies, double revenue

Jacobs' template: find a huge fragmented industry of small, profitable businesses starved of capital, buy a brokerage doing ~$30M revenue, add 30-40 salespeople, and double revenue over time, supplying the capital the founders never had.

“in a nutshell, this is how you ramp up a business. You buy a brokerage or some type of small business with $30 million in revenue and you add 30 to 40 bodies to it and you double revenue in time. I've looked into companies that have executed this plan, but most of them don't have the capital to sustain it. I try to find those businesses and I bring all the capital to do it.”

Steal thisBuy a ~$30M profitable business in a fragmented industry, inject capital and 30-40 salespeople, and double revenue.

Mark Leonard: the anonymous $2B SaaS roll-up king

Andrew names Constellation Software founder Mark Leonard his Billy of the Year: worth ~$1.9B from acquiring boring vertical-market software businesses with high switching costs since 1995, while remaining almost completely anonymous online.

“He founded Constellation Software, which is like the OG SaaS acquirer. So over the last 5 years, I think every single person in the world has realized software businesses are good businesses. Everyone's trying to buy them, paying crazy prices. This guy's been doing it since 1995 from up here in Canada. He's been focusing on super boring verticals with low competition.”

Small-scale private equity for SaaS: buy, scale 10x, flip

Rahul Vohra's runner-up idea to Superhuman: buy bootstrapped SaaS companies past the hard early phase (making $10K-$100K/month) for $500K-$10M, scale them 10x using a centralized resource pool, and sell them on for far more once ARR grows from $1M to $10M.

“So I think there is a very good business model to be had, and I do know some people pulling this off, where you find companies that have done that phase. Maybe they're making $100,000 a year— sorry, a month, or maybe they're making $10,000 a month, and you spend anywhere in the region of $500,000 to $5 million $10 million to buy these companies outright. You own all of them.”

Steal thisAcquire post-product-market-fit SaaS companies outright, scale them with shared dev/sales/support, then sell at a higher multiple.

Roll up Rite Aid with a dead retailer's real estate

Shaan pitches buying Rite Aid (the 'poor man's CVS' at a ~$500M market cap) and merging it with the real-estate footprint of a brand that died during COVID, then bolting on DoorDash-style mobile delivery of prescriptions to modernize it.

“We're going to take Rite Aid the brand, and then we're going to pick up real estate, uh, footprint of some brand that just died during COVID And they, like, you know, some dollar store, or like, you know, Sears. I don't know who— somebody's going out of business but has the same— Sears too big. You need somebody with the same footprint as a Rite Aid. We're gonna do a roll-up of those two, and we're gonna offer the, um, sort of mobile ordering delivery DoorDash-style service for prescriptions and, uh, and products from Rite Aid.”

Steal thisAcquire a brand with a wide real-estate footprint in a sector you care about, absorb a dying competitor's locations cheaply, and layer modern delivery on top.

Wayne Huizenga: from one garbage truck to Blockbuster and the Dolphins

Sam celebrates Wayne Huizenga, who scaled Waste Management from a single garbage truck (started at 21) through roll-up acquisitions, then founded AutoNation and Blockbuster and owned NFL teams.

“This dude's name's Wayne Huizenga. He's dead now, but he originally started Waste Management as a young person, like 21. It was a truck, one truck that he like scaled to like many trucks. And then eventually Waste Management, the plot of that story is that it's the greatest acquisi— one of the greater acquisition companies of all time.”

The SBA playbook: buy a $1M business for ~15% down, pay it off in a year

Shaan lays out the buy-a-business math: a $1M SBA-backed deal needs ~15% down (5% you, 10% seller carry), the SBA can cover the first 6 months of payments, profits pay off the loan within ~12 months, and basic operational fixes can 2-3x the asset's value.

“Um, you know, what most people fail to realize is that for, um, either no money down or like kind of like, you know, you could put down 5 to 10%, you can buy a million-dollar business with an SBA loan. And by the way, if you buy it before September 27th, either first 6 months are going to get paid for you by the SBA.”

Steal thisUse an SBA loan plus 10% seller carry to buy a profitable $1M business for ~15% down, then improve operations to 2-3x its value.

The McDonald's structure: hold the brand, raise capital per location

To build a multi-location concept without venture, own a holding company 100% that owns all the IP, brand, and systems; spin up each new location as its own LLC that raises its own capital and licenses the brand for ~5% of revenue. Investors bet on a single location while you compound value in the holdco — like McDonald's or Marriott.

“And so you make, make each location its own LLC with its own investors, but, but you ultimately own 100% of the holding company and you're making a percentage of revenue off of every single location.”

Steal thisPut brand and IP in a holdco you own 100%, then fund each location as a separate LLC that licenses the brand for ~5% of revenue.

Mark Leonard: the mysterious $31B software roll-up king

Billy of the Week is Mark Leonard of Constellation Software, a company worth $31 billion that buys software companies and holds them forever for the cash flows rather than flipping them like private equity. Shaan calls him a 'Satoshi Nakamoto of boring businesses.'

“His company's worth $31 billion. What they do is they buy software companies and they roll them up and they try to be a perpetual owner. So they're not private equity where they're doing the leveraged buyout and trying to flip, cut it, skin it, and flip it or whatever. They try to just own the thing for a long period of time and have the cash flows. And so what I like about this guy, what I thought was cool was this guy's like a Satya Toshi Nakamoto of boring businesses. So nobody knows shit about this guy.”

Thrasio raised ~$100M at a $750M valuation buying up Amazon brands

Thrasio, a two-year-old company that acquires Fulfilled-by-Amazon brands and improves them, raised close to $100M at a $750M valuation. Sam frames it as a fast-growing roll-up of FBA businesses.

“On Tuesday, Sean and I talked about Thrasio. It's a company that raised money. They raised, uh, $100, $200 million at a $750 valuation.”

Thrasio: $200M+ revenue, $35M EBITDA, $780M valuation in 2 years

Shaan breaks down Thrasio, the Amazon FBA roll-up. The holding company reports over $200M gross revenue and $35M trailing-12-month EBITDA, with the $780M valuation being 30x what it was 18 months prior.

“So the holding company, uh, they say their gross revenue is over $200 million. And they have $35 million in trailing 12-month EBITDA. So $35 million of EBITDA in the last 12 months”

Why Amazon FBA brands aren't durable or defensible

Shaan's core critique of the FBA roll-up model: these businesses lack a moat because competitors can easily clone products, you only win by ranking at the top, and Amazon itself enters categories with Amazon Basics brands.

“The but is Amazon FBA businesses are not durable or defensible. Now maybe I'm wrong. Maybe these guys have a contrarian point of view. That's correct. But the conventional wisdom here is It's very easy for a competitor to come in and compete with you. It's very hard to build any kind of moat because you're just hoping to be at the top of the rankings. On top of that, Amazon themselves is going into different categories and creating Amazon Basic Brands.”

Steal thisBefore buying a cash-flow business, stress-test its durability: can a competitor clone the product in days, and does the platform you depend on compete with you?

Follow the ownership trail to find fascinating operators

Sam's research method for discovering business stories: when something interests him (e.g. Guinness World Records), he scrolls to the far right of the Wikipedia infobox to find the parent company and owner, then opens tabs tracing the full chain of who bought and sold it.

“So like Ripley's Believe It or Not has always interested me, so did Guinness Book of World Records. You and I one time talked about the business behind like certifying and like giving like a seal of approval. I got interested in that and I thought, what, what out there is kind of like that?”

Steal thisStart from any brand you find interesting, trace its parent company and ownership history, and you'll surface the operators and playbooks behind it.

Incentive-caused bias: share buybacks line the CEO's own jeans

Wilkinson explains incentive-caused bias using buybacks: CEOs paid in stock options benefit when share price rises, and buybacks shrink the share count to lift price — so a 'return capital to shareholders' move can really be self-enrichment.

“a lot of CEOs are compensated based on share price because they get stock options. So their stock options become more valuable when the share price goes up. And what makes the share price go up but share buybacks? So when you buy back shares, there's fewer shares and each individual share is worth more. So it's actually a way for the CEO to put money in his or her own jeans.”

Andrew Wilkinson zigged: charge SF rates, pay local rates, buy don't build

Shaan breaks down Andrew Wilkinson's two contrarian bets: living in Canada while charging San Francisco prices and paying staff local rates (making his agency wildly profitable), then using that cash flow to buy businesses instead of building them.

“And he was like, no, I'm going to live where I want to live, and I'm going to take advantage of some of the arbitrage opportunities of He charged San Francisco rates to his companies he was doing designs for, but he paid his people local rates for doing the work that they were doing. And so his agency was wildly profitable, and that compounded over like a decade, which is great. So Canada was one contrary decision. The other one was buying businesses versus building them.”

Steal thisSell into a high-cost market while keeping your cost base local, then redeploy the spread into buying cash-flowing businesses.

Buy boring: Tiny acquires simple, profitable, durable internet businesses

Andrew Wilkinson describes Tiny's thesis: a long-term holding company that buys majority stakes in profitable, simple, often boring internet businesses from bootstrapped founders. He deliberately avoids sexy categories like drones, AI, and VR in favor of predictable cash flow.

“So we go out and we find profitable, simple, often boring internet businesses, and we acquire majority stakes and we take over ownership. And we usually buy from founders. Often they're bootstrapped., and usually the businesses have been around for, you know, 5, 10 years. These are longer-term things, and we don't go for sexy stuff. We're not doing drones and AI and VR and all that kind of stuff. We look for businesses that are simple and predictable and boring.”

Steal thisHunt for simple, boring, cash-flowing internet businesses that have already survived 5-10 years instead of chasing sexy categories.

The Buffett-style 7-day term sheet that founders actually love

Wilkinson contrasts the miserable, drawn-out private equity process (months of diligence, last-minute renegotiation, earnouts) with Warren Buffett making multibillion-dollar deals in 7 days. Tiny copies Buffett: fast decisions, no renegotiation, founders get to leave and Tiny takes over management.

“And when we started reading about Warren Buffett, we were like, what the fuck? Like, Buffett makes deals in 7 days and he's doing multibillion-dollar deals. Why can't we just do the same thing? And the businesses we're buying, they're way less complex, way less complex than what Buffett's buying. He's buying factories and stuff. We're buying like these tiny little internet businesses with, you know, 10 to 20 employees. And so we started doing it and people love that. Because founders are high-paced. They want to make a quick decision and get a deal done, and they don't want to waste a bunch of time on it, and they don't want to be renegotiated and dragged through the mud.”

Steal thisWin deals against private equity by promising founders a fast, no-renegotiation close instead of months of diligence and earnouts.

Tiny's hands-off CEO playbook: a monthly P&L and a quarterly SWOT

When Tiny buys a company it installs a trusted CEO, hands them a growth playbook, and asks for only two reports: a financials-only update monthly and a SWOT analysis quarterly. No board meetings; some CEOs go six months without contact unless there's a crisis or big investment.

“All you have to do is send us two things. Once a month, you're going to send us a financial-only update. So we get no information about the operations of the business, just the, the numbers, the P&L and the balance sheet. And then on a quarterly basis, you're going to send us a SWOT analysis. So strengths, weaknesses, threats, opportunities in the business. And if there's anything that's really important, you got to call us quickly.”

Steal thisManage portfolio CEOs with just a monthly financials-only update and a quarterly SWOT, escalating only on crises or big bets.

MetaLab threw off ~$7M/year in profit before Tiny started buying

Wilkinson reveals MetaLab was generating roughly $7 million a year in profit when he began acquiring other companies, starting with Designer News in 2013. That free cash flow became the engine for Tiny's acquisitions.

“I think we were doing about $7 million a year in profit or something like that when we started buying businesses.”

PE dental roll-up: buy at 1-2x EBITDA, centralize marketing and billing

Private equity firms buy dental practices from near-retirement dentists at roughly 1-2x EBITDA, let the dentist keep their salary and a small stake, then centralize Facebook ad spend and billing across many offices to boost efficiency.

“So they'll go buy 10 of these dentistry and then they'll put— they'll be like, okay, we'll have one central office that's doing Facebook ads driving traffic to all these. We'll bring all your billing stuff into one central place, because why do you need 4 people doing billing?”

Steal thisRoll up fragmented local practices at 1-2x EBITDA, keep the operator on, and centralize marketing plus back-office to expand margins.

Tiny Capital: buy profitable companies and live off the dividends

Sam describes Andrew Wilkinson's Tiny Capital, whose portfolio collectively does about $100M in revenue, taking dividends and using the cash flow to buy more companies—a buy-and-hold-for-cashflow model versus chasing exits.

“He owns tiny capital, and they do— they've been doing this. Uh, the companies that they own collectively, I think, do about $100 million in revenue, and he, I think, takes dividends and buys companies with the cash flow, right? And, uh, it's an awesome model.”

Steal thisBuy profitable companies, take dividends, redeploy the cash flow into more acquisitions.

Buy a business instead of starting one; a job is a flawed path to freedom

Shaan argues two underrated ideas: buying an existing business is a much faster path to success than the glorified act of starting from scratch, and working a job is a flawed route to financial freedom because the deck is stacked against employees.

“So I think that, uh, buying a business, buying an existing business, uh, should be way more common than it is. 'Cause I think the media, investors all glorify starting a new thing, but there's so much value in buying a business and actually just increasing the value. It's a much faster path to business success.”

Steal thisConsider buying an existing profitable business rather than starting one from zero.

The roll-up arbitrage: pool $200K businesses into a $2M one and double the multiple

Valley describes how private equity and search funders buy small 90%-Amazon businesses at 2-4x discretionary earnings, then pool them. A bundle doing $2M in SDE commands a much higher multiple (a 3x can jump to 6x) than the individual sub-$1M businesses did separately.

“And they're buying them at 2 to 4 times discretionary earnings. But when you pool them all together, you don't have a business doing $200,000 in discretionary earnings anymore. You've got a bigger business doing $2 million in discretionary earnings. And that 3x multiple might immediately jump to 6x multiple, or depending upon how defensible it really is, maybe even more. So they're buying them up low, and just by pulling them together, they're becoming much, much more valuable.”

Steal thisRoll up several small Amazon businesses bought at 2-4x SDE into one larger entity to re-rate the combined cash flow at a higher multiple.

The roll-up: raise a big check, buy the top players, combine for more value

Shervin Pishevar's strategy was a roll-up: he raised $15M from VCs, then bought the top 5 players in the Facebook-apps space, combining companies that cost ~$10M to create $50–100M of value.

“So what Shervin was doing was a strategy that's called roll-up. So you get somebody to back you and give you a big check. In this case, he'd gotten venture capitalists to give him $15 million. He was going to use that $15 million to buy up the top 5 players in the space, combine them all together with a goal of, you know, that costs $10 million but creates $50 million or $100 million of value.”

Steal thisRoll up the top players in a fragmented space: combined, they're worth far more than the sum bought separately.

Phantom equity over real equity to keep a conglomerate clean

Wilkinson avoids giving real equity in his ~40 corporate entities because it blocks him from moving assets and merging companies for tax purposes. He uses phantom equity instead, and only gives any equity at all when the plan is to eventually sell the business.

“We're moving towards doing more phantom equity if we do do it, because it's really complicated in a conglomerate like we have where you have, you know, 40 or so corporate entities to not be able to move stuff around and, you know, slam companies into one another for tax purposes and stuff. So we're moving more towards phantom equity if we do it. But if a company is at scale, you know, already doing tens of millions of dollars of revenue and profitable, I wouldn't give equity unless the plan is to sell the business.”

Steal thisUse phantom equity instead of real shares so you keep the freedom to restructure and merge entities for tax purposes.

One operator, four ventures: BizNow, Summit, Powder Mountain, and a $30M fund

In the same week he sold BizNow, Begelman co-founded Summit (which became a ~$20M revenue business), bought Powder Mountain, and built a $30M venture fund plus a nonprofit — all run as an operator without outside capital.

“we, uh, co-founded Summit, which became also like a $20 million revenue business with, you know, thousands of customers. And, um, and as you mentioned, we bought Powder Mountain, which is the largest ski resort by acreage, 10,000 acres of skiable terrain in Utah with 7 lifts and hundreds of employees in the winter and a development team. And, and we've sold, you know, I think, uh, like $160 million worth of real estate at the project. We also built a $30 million venture fund called Summit Action”

The capital-call headache that pushed Wilkinson to phantom equity

Wilkinson illustrates why outside shareholders are painful: if a CEO owns 3% and Tiny has to inject $100K into the business, you have to ask the CEO to chip in $3K, they balk, and then you have to dilute them. Phantom equity sidesteps the complexity.

“Let's say we have a CEO and they own 3% of the business and Tiny has to inject money into the business, like loan the business money or something. There's a lot of complexity when you have outside shareholders where you go to the shareholder, like the CEO, and you say, hey, we're loaning $100,000. Can you chip in 3% or, you know, $3K? And they're like, what the fuck? And then you have to dilute them and it just gets kind of complicated. So that's why we're moving towards phantom equity.”

Wayne Huizenga: Waste Management, Blockbuster, CarMax, the Dolphins

Sam spotlights serial operator Wayne Huizenga, who started Waste Management (worth $10-20B, publicly traded), then Blockbuster, then CarMax (largest US used-car seller), then bought the Miami Dolphins.

“There's this guy named Wayne Huizenga. Look him up. Super interesting person. He started Waste Management. That's a company. It's worth like $10 billion or $20 billion, like some crazy number.”

The roll-up: combine the top players to manufacture value

Shervin's playbook was a roll-up: raise a big check ($15M from a VC), buy the top 5 players in a space, and combine them so the $10M spent creates $50M-$100M of combined value.

“So you get somebody to back you and give you a big check. In this case, he'd gotten a venture capitalist to give him $15 million. He's going to use that $15 million to buy up the top 5 players in the space, combine them all together with a goal of, you know, that costs $10 million but creates $50 million or $100 million of value.”

Steal thisRoll up the top players in a fragmented space so the combined entity is worth far more than the sum of the acquisitions.