The Anti-VC Billionaire

GM! It's Friday, March 17th - Today, we're covering an anti-vc billionaire whose holding company has grown into a $50B behemoth by acquiring boring companies in hyper-niche markets.

Should you care? Well, people like Andrew WilkinsonNick Huber, and Michael Girdley are using the same principles to build their own empires.

 - Callum


Hunting For "Sticky" Businesses Made Him A Billionaire

Mark Leonard is the elusive bearded billionaire behind the $50B constellation software (CSI). And you've probably never heard of him.

You'll never hear him speak (he's scrubbed himself off the internet), but he does publicize extremely detailed annual letters showing exactly how his hold co. has acquired 600+ companies.

We did the legwork to unpack it for you. Let's dig in!

So, What’s the Business?

Mark Leonard founded CSI in the mid-90s after working in venture capital for 11 years. He didn't like the erratic upside of VC, so looked for something more stable.

Then he discovered Vertical Market Software (VMS) - the perfect business to create massive wealth.

In short, VMS businesses sell software tailored to specific industry verticals like education, healthcare, and real estate.

Unlike VC-backed businesses that need big markets, VMS software can be super niche, for example, a company that sells software for managing bowling alley reservations, or medical supplies software for dental practices.

Here’s why these companies are so lucrative

  • They're "Sticky": VMS businesses generate recurring revenue by selling their software through subscription services. Also, companies rarely switch their VMS providers because these systems are so embedded into their day-to-day operations.

  • Build It Once, Sell It Forever: Recurring-revenue software businesses are the holy grail of businesses. You build them once and can sell them thousands of times with zero, or minimal, marginal cost per additional customer. Because of this, these companies have extremely high margins (can be 60-80%).

It works well. In 2022, CSI hit $4B in revenue across 125k customers.

How Constellation Software Wins

1) It Buys Long-Term "Sticky" Businesses

CSI targets small VMS players with an average price of $2-4M. With each VMS business CSI acquires, it increases the company's total cash flow and allows it to acquire companies at an even faster rate – it’s a positive feedback loop.

Here’s what CSI looks for when making acquisitions:

  • Experienced and committed management (they want them to stay on post-acquisition)

  • Consistent profitability ($1M+ in free cash flow)

  • Above average growth (20% + YoY)

  • First or second-ranked players in their verticals (aka the market leader)

2) 6 Independent Teams Have Full Autonomy To Buy Businesses 

Leonard structured CSI to eliminate bureaucratic overhead and incentivize ownership and entrepreneurship as much as possible. 

This autonomy and ownership is also what’s turned CSI into an acquisition machine. Let me explain:

  • The 600+ companies are divided up between six operating groups that service specific verticals like agri-business, edu, healthcare, real estate, hospitality.

  • Businesses acquired by CSI run almost as if they were never sold, except Business Unit Managers receive coaching from Operating Group Managers

  • Leonard has trained his Portfolio Managers, Operating Group Managers, and Business Unit Managers in capital allocation, so each of these three leadership levels can conduct their own roll-ups.

3) Like Warren Buffets Berkshire Hathaway, Compounding Is The Key

Constellation software has grown by 30% YoY since its inception. 

Warren Buffett is known for finding undervalued companies and holding their stock long-term. Buffett invests heavily in dividend stocks and his company Berkshire Hathaway is making $4.83B in annual dividend income.

This is basically what Mark Leonard has done with VMS businesses as he never sells his acquisitions.

 By acquiring small software companies with very consistent, long-term, growth and never letting them go, Leonard has created a VMS conglomerate that sees consistent and steady returns year after year.


The Ultimate Planet Saving Investment

EthicStream sells carbon offset credits directly backed by forestation and carbon sequestration on indigenous lands. 

They purchase premiums from their partner, CarbonEthic, and now they’re getting ready to sell them to corporations that need them at a markup.

Before they do, they want investors like you to join their community.

Here’s why EthicStream is such a rare investment opportunity.

Hundreds of brands like Apple and Shell, along with 190 countries, have committed to reaching net-zero carbon footprints between now and 2050. 

And many of them will soon be legally required to publicly disclose all their carbon emissions The market is expected to grow 50X. 

EthicStream is helping them do that by solving the carbon offset market’s biggest problems: greenwashing and the lack of trustworthy credits.

The Problem:

Greenwashing. Many companies have been caught  “greenwashing” by putting out false or misleading information about their sustainability activities so governments around the world are requiring tighter rules on these activities.

At worst, greenwashing means knowingly using carbon credits that aren’t backed by carbon-offsetting activity. At best, it’s using carbon credits without any clear way of knowing their impact.  

But even well-intentioned companies have a hard time finding enough trustworthy credits to balance their emissions.  

How Is EthicStream Improving Carbon Credits?

EthicStream solves these issues by providing large volumes of reliable carbon credits that actually do what they are supposed to do - and they prove it with technology.    By partnering with CarbonEthic and their indigenous partners, EthicStream is protecting 4.2M hectares of forest (about the size of Switzerland!). And to prevent “greenwashing”, they use their own technology to closely monitor every tree in the area and track all the carbon that each tree removes in real-time. 

This makes their carbon credits trustworthy and  “premium” quality compared to the rest. 

*Disclosure: This is a paid advertisement for EthicStream’s Regulation A+ Offering. Please read the offering circular at

Please support our partners ❤️


Adept AI Raises $350M!

David Luan’s start-up Adept AI is making an AI assistant that can answer text-based requests and take over your computer to complete them. 

The startup raised $350M during a Series B round after demonstrating a very basic prototype to investors eager to get in on the AI wave.

The Take Aways:

  • Luan previously served as VP of Engineering for Open AI, the company behind ChatGPT

  • Adept is collecting data on how people use the internet and software tools to model an AI that can take a written request and perform a series of actions

  • In total, Adept AI has raised $415M in funding and has a post-money valuation of at least $1B

Adept AI has secured a billion-dollar valuation despite not having much to show for it. Are VCs jumping the gun on the AI wave, or are they on to something? Lemme know!