The software acquisition landscape is crowded and confusing

Not everything I do has a point. This is one of them.

Because I talk to a lot of founders and sort of early growth companies, I keep hearing people lump Private Equity, permanent-capital holdcos, search funds, strategic acquirers, and even VCs into the same bucket — as if they all buy and operate software businesses the same way. They don’t. Each plays a completely different game, with different incentives, timelines, and outcomes. So I put together a simple taxonomy to clarify how these models actually work in the real world. This is how I understand the landscape — if I’m off on anything, feel free to tell me I’m wrong.

The Four Major Archetypes of Software Acquirers 

1. Private Equity (Buy → Improve → Sell)

Alias: Buy-and-Improve / Buy-and-Flip / Value Creation

Model:

• Buy a company (usually majority ownership)
• Optimize it (cut costs, implement playbooks, accelerate growth)
• Sell it within 3–7 years

Typical moves:

• Replace or augment leadership (interim executives are very common)
• Merge companies (platform + tuck-ins)
• Efficiency + EBITDA expansion is the religion

Examples:

• Thoma Bravo
• Vista Equity Partners
• Silver Lake
• Hg Capital
• Francisco Partners

These folks don’t want to run software forever. They want to sell or IPO after proving significant value. These funds are so big - and there's so many of them. There's simply so much capital looking for big growth outcomes.

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2. Buy-and-Hold Software Conglomerates

Alias: Permanent Capital, Buy and Never Sell

Model:

• Acquire vertical market SaaS
• Run them forever for free cash flow
• "Decentralized autonomy": keep the brand, team, and product.
• No expectation of resale

Examples:

• Constellation Software (the poster child)
• Topicus (Constellation spin-off)
• Valsoft

This is the Warren Buffett model applied to SaaS.

These companies aren’t chasing hockey-stick growth — they’re chasing predictable recurring revenue and low churn. “Autonomy” is real, but conditional. They run disciplined playbooks for driving EBIT/EBITDA, and financial outcomes always shape operational decisions. If the numbers don’t track, autonomy evaporates. Expect price increases, cost controls, and aggressive efficiency measures.

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3. Buy-and-Operate Product Companies

Alias: Strategic Acquirer / Roll-Into-Platform / Synergy Extractor

Model:

• Buy products that fit into an existing platform
• Consolidate onto corporate stack
• Rationalize product overlap & synergies 
• Cross-sell into the existing customer base

Examples:

• Autodesk (market consolidation)
• EverCommerce (semi-hold)
• OpenText (information management rollups)
• Kaseya (MSP tools consolidation)
• Salesforce (platform expansion)
• Cisco (networking / collaboration expansion)
• And a thousand other names ...

I think this is just normal industry consolidation. These acquirers buy to expand their product portfolio, eliminate competitors, or absorb technology that fits into their existing platform. Every single industry on earth have consolidation operators hard at work. Autonomy is not the goal — integration is. And it’s rarely graceful. In today’s inflated public markets, we’re seeing massive deal volume from this group because an overvalued stock effectively becomes discounted currency: they use their inflated share price to acquire real companies at a relative bargain.

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4. Search Funds / Entrepreneur Operators

Alias: ETA (Entrepreneurship Through Acquisition), Independent Sponsor, CEO Buyer

Model:

• Small group or individual raises capital to buy one business
• Steps in as CEO and runs it
• Typically holds mid-term (5–7+ years)

Examples:

• Tiny search funds (1–5M EBITDA companies)
• Relay
• Chenmark (similar ethos)

These buyers are for true owner-operators, not financial engineers. They’re experienced executives who want to own and run a business — not take a job. For these investors, it’s a way to back proven operators acquiring established, profitable companies without the risk and chaos of a startup.

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Bonus Category : Micro SaaS Aggregators

Alias: Buy and Cashflow Small SaaS Businesses

Model:

• Buy <$5M ARR SaaS products
• Minimal integration
• Monetize via low-touch operations

Examples:

• Tiny Capital
• SureSwift
• Scaleworks (sort of between PE + Holdco)
• Calm Company Fund (funding + acquiring)

I’ve heard people call this an “emerging category,” but to me, they’re essentially smaller versions of the buy-and-hold model — just operating at micro-SaaS scale. It’s like the intersection of indie hacking and permanent capital. I probably need to talk to a few of these funds directly to fully understand how they operate.

This post exists so I have something to point people to when the terminology gets muddled. And if I’ve gotten anything wrong, I’m sure someone smarter will happily tell me.

 

I work with SaaS scale-ups and acquirers to:

• Make technology strategies make business sense
• Fix gross margins
• Optimize tech orgs for exit readiness

👉 Book a call: https://darcyreno.com/booking

About the Author

Darcy Reno — executive technology leader, career CTO, exited-founder.
25+ years improving SaaS efficiency and value creation for software scale-ups and portfolio roll-ups.
Not afraid to kill bad ideas.

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