Last Updated on March 27, 2026 by Jason Andrew
The most interesting tech-enabled rollup you haven’t heard of?
Teamshares.
The platform has quietly grown from inception to one of the largest independent owners of small businesses in the United States in a handful of years.
0 -> 87 portfolio companies.
Teamshares goes where most buyers aren’t looking, in the underserved $0.5 -> $5m EBITDA range, using software to turbocharge their deal process.
And they just filed their S-1 to go public at a ~$750m valuation at a punchy ~15x forward EV / EBITDA.
Where many private equity funds promise sunshine and rainbows, only to walk away in DD, Teamshares delivers a 95% close rate on LOIs.
But it’s not all sunshine and rainbows.
The platform has high operating costs due to its tech-enabled model, and it has historically suffered from high interest rates and flattening returns.
Is the model broken? Or could we see another generational programmatic acquirer in the public markets soon?
Let’s break down the story of Teamshares.
Portfolio Breakdown
I can tell you’re dying to know.
What assets is Teamshares actually buying? And at what prices?
Teamshares has decided to adopt a generalist model from the outset, unlike many of the listed serial acquirers like Constellation Software and Teledyne (Aerospace), which focus on verticals first. I tend to think specialisation leads to stronger advantages in terms of the ability to both accurately price and operate these assets. That being said, there is relatively significant exposure to the consumer / food and beverage sector, which collectively accounts for ~47% of their 87-company portfolio.
Among these companies, Teamshares has a hard and fast rule that they won’t buy a company younger than 10 years old, with the median company age at acquisition being 35 years old. Teamshares also has a rule that there must be at least 2 middle managers in the company.
Teamshares is also targeting the very bottom of the market with a committed capital fund, going after companies from $0.5 – $5m in EBITDA, so most of their competition can’t guarantee high close rates like traditional PE would. On top of this, Teamshares prides itself on high close rates, with a 95% close rate after issuing LOIs, significantly higher than industry averages.
Some of these companies include:
- Brad’s Service Center, an auto service business in Western Massachusetts
- Boxes4U, a packing material distributor in Plano, Texas
- Central Texas Plumbing, in Waco, Texas
- Don & Millie’s, a fast-food restaurant chain in Nebraska
- Horn Photo, a specialty retailer in Fresno, California
- Julia’s Homestyle Bakery, in Murfreesboro, Tennessee
- Maggie’s Organics, a sock and apparel company in Ann Arbor, Michigan
- Runkle’s, a notary, tag, and title retail chain in Central Pennsylvania
- PlanForce, an architecture and design firm in Minneapolis, Minnesota
- Select Sand & Gravel, an aggregates distributor in Texas
- Thielen Meats, a butcher shop with nationally famous bacon in Pierz, Minnesota
- Wright Way Cleaning & Restoration, in the Seattle-Tacoma, Washington area
- Mumma’s Pizza
From a multiples standpoint, it’s hard to tell what Teamshares has been paying for these businesses, as there have been no public announcements of acquisition prices.
Pivoting the In-House Tech Strategy
Something else to note about Teamshares is that their vertically integrated software capabilities have taken a back seat.
At inception, Teamshares initially decided to build software to handle banking and insurance in-house across its portfolio of SMEs. They had a team of ~70 internal software engineers (50% of total corporate headcount) to make this a reality, which was very large for a holding company of its size and showed a genuine commitment toward tech enablement.
“We built a neobank, we’re soon to launch credit cards, and we’re building an insurance business as well, so there’s a secondary layer of financial products that will basically replace the vendors that the companies used to use.” – TechCrunch, 2023
Interestingly, Teamshares has since abandoned this strategy of building their fintech stack in house, in place of simply being a ‘tech-enabled’ acquirer, focusing on software to improve the sourcing process, diligence process, and cash management across the portfolio. The company hasn’t explicitly stated why this was the case, although we can infer from their financials that the cost burden of developing this capability in house did not translate to the benefits necessary.
The business was still unprofitable at the corporate level in 2024 due to this ~$43m cost burden.
This shows the challenge that going tech-native can have, and should serve as a warning to the ‘AI rollup’ strategy that has recently come into vogue. Building technology is hard, and very costly.
There still seem to be advantages that the business can accrue by building better software, though. In particular, Teamshares has shown its plans to automate the movement of cash from the portfolio companies to the holdco level in their recent investor presentation, which, as Kyle Tucker notes, was one of the challenges of rollups in the 90s.
Moving forward, there is still a lot to be bullish about in retaining this software capability. This is something that the Teamshares CEO has spoken extensively about, allowing them to be far more tech-forward in their approach, where previous owners have been unwilling to adopt software.
“We’ve looked at 15,000 small businesses over the last few years. I think we’ve seen Stripe once. We’ve seen Salesforce zero times. We’ve seen HubSpot twice. It’s very hard to get software into these small businesses.”
Details of the Listing
Teamshares is set to go public with an Enterprise Value of ~$746m. The reason for listing this early in the lifecycle of the business is to access cheaper debt capital (the business has currently been accessing debt financing at a ~15% interest rate), with the view that a publicly traded entity could access debt financing at closer to ~10%, showing sensitised historical returns at 12%, 10%, and 8% interest rates.
Interestingly, 23% returns to date haven’t been stellar considering the size of the businesses they are acquiring (i.e. low returns relative to the hassle), which potentially points to a flaw in the business model, but only time will tell.
Does it make sense for a business of this size to go public? Alex Prokofjev has broken down some of the issues of subscale serial acquirers going public, notably a lack of liquidity in the stock making equity raises difficult without long-term, committed shareholders. This can have a cascading effect, where targets won’t see shares in the listed company as M&A currency.
In the case of Teamshares, given that several of their existing shareholders are institutional venture capital / private equity funds (Spark, Khosla Ventures, QED) with deep pockets, this shouldn’t be a major concern.
So what will the business trade for?
The IPO has been priced on an 11.2x EV / 2027 EBITDA basis (assuming that the business deploys the equity capital raised from the IPO into new businesses), although on a 2026 basis, it is significantly more expensive at 15.0x. It’s also relatively rare to see an IPO priced on a 2-year look-forward basis, which possibly shies away from some of the near-term risks with the business.
Looking at the comps set here, most of the businesses chosen are significantly larger than Teamshares, which is important given that corporate overheads are spread over a much larger revenue base, and these peers would also likely have a notably lower cost of capital given their scale.
Employee Ownership Strategy
A big focus of the Teamshares model is on employee ownership. In the long run, Teamshares aims to only own 20% of the businesses that it acquires, with employees owning the other 80%. This is very different from traditional holding companies, which typically try to retain majority, if not 100%, stakes in the businesses they own. The CEO has also publicly stated that their broader mission is for the default for small businesses to be issuing equity to employees.
So how does this math work?
At closing, Teamshares buys a 90% stake in the business, with the previous owner retaining 10%. Then, immediately at close, Teamshares issues new equity to the employees and incoming president equal to 10% of the company, diluting their existing ownership down to 81%, with the previous owner retaining 9% equity. Over time, the free cash flows of the business will be used to buy out Teamshares’ ownership, increasing the ownership of the employees by 2 – 3% per year. In addition, other stock grants will be given to the employees based on hitting operating growth targets over time.
This is obviously great for their employees, and a good ethos generally, but will it be good for returns?
Interestingly, some of the best available data on the subject from this meta-analysis of 102 studies across ~56,000 businesses seems to indicate that there is a small but significant positive correlation between employee ownership and firm performance, and the presence of an ESOP. That being said, I suspect there is selection bias here. The types of companies that historically decided to issue equity to employees are probably more forward-looking in other ways, like being more willing to invest in technology or being first to move into new markets.
Funds like KKR have adopted a similar default of having broad-based employee equity ownership with their portfolio companies after the success of deals like CHI Overheads, but again, there isn’t that much data available to support a robust conclusion here.
Interestingly, several other holdco operators like Andrew Wilkinson choose to take the opposite approach with their presidents / CEOs, preferring to only give cash to executives and not give equity by default in order to reduce equity dilution.
If you are going to issue equity to employees, the increased growth of the company needs to outweigh the cost of dilution to the business to have a positive ROI.
Presidents Model
Another interesting aspect of the Teamshares model is that they almost exclusively bring in an individual from outside of the company to take the reins as president, preferring this to internal succession. This model was pioneered by Alpine Investors, famous for bringing in young, hungry individuals from corporates and MBA programs to run small businesses within their rollup platforms.
The advantage of this strategy is that it opens up significantly more businesses to be acquired, which otherwise would not have a logical successor. From first principles, it makes sense that this is the default, as if these businesses did have a logical successor, they would likely not be for sale. To date, Teamshares has hired presidents from places like the US military, BCG, Walmart, and other Fortune 500s.
Looking Forward
So what’s next for Teamshares going forward? The business needs to show that it can deliver higher returns on its acquisitions after raising cheaper debt in the public markets. They also need to focus on gaining operating leverage as their portfolio grows larger relative to the size of their management group, given they aren’t likely to be free cash flow positive until FY27.
I can’t say I’ve ever seen a serial acquirer quite like Teamshares, and for the hope of local employees who have spent decades working in small businesses, you can’t help but want their model to win, giving more equity to the people putting blood, sweat, and tears into local economies.
But only time will tell, and they’re certainly taking on lots of dilution. They join Tiny Capital as another small-cap serial acquirer in the public markets.
If you’re building, investing in, or evaluating a rollup strategy and want to understand how your economics really stack up:
