#082: The Story of Teamshares, Financial Arbitrage, 2024 Vertical SaaS Top 50
#082: The Story of Teamshares, Financial Arbitrage, 2024 Vertical SaaS Top 50
One vSaaS breakdown. One biz story. One 'how to'. In your inbox once a week.
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Alright friends, let’s get to it…
One Biz Story
The Story of TeamShares:
This guy plans to buy 10,000 small business & give each of his employees a significant amount of equity ownership.
It is NOT a charity. It is an INCREDIBLE business.
This is the story of Teamshares:
Michael Brown, the co-founder and CEO of TeamShares, began his career in investment banking. During this time, he advised corporations on buying and selling businesses.
After leaving the banking industry, Michael embarked on the path of small business ownership.
His first venture involved purchasing an electrical contracting business in Western Canada. Although successful, it came with tough lessons. The most interesting one?
By giving ALL employees ownership, Michael saw his business performed much better.
As his journey progressed, Alex Eu, one of his first investors, and Kevin Shiiba, a CTO, joined him. Together. they acquired 8 small businesses and implemented an employee ownership model.
Not only did it improve the businesses, it also transformed the lives of it's employees.
They knew they were onto something...
So they mapped out a simple but effective strategy.
Identify retiring small business owners.
Purchase the business at a fair price.
Bring in a new President
Make every employee an owner in the business.
What if they could massively scale this model? The market tailwinds were behind them.
Over 300K business owners are retiring each year.
70% of businesses owners fail to sale.
In October 2020 the group raised $2.7M to aggressively pursue this model. Seeing it's success, only three years later ent on to announce a $124M round led by QED investors and Khosla.
They have now raised over $245M dollars...
To raise that type of moolah the model has to be working well. They've built out a criteria of what to look for in companies they acquire:
Teamshares has built out a whole suite of software to support the companies that it buys, including:
Employee Ownership Platform: Facilitates transition to employee-owned companies.
Financial Literacy Tools
Insurance & Payments Products
TeamShares is scaling insanely fast. They've acquired 90+ mall businesses that employ 2,100 employees across 29 states.
Revenue has grown from $10M in January 2021 to over $400M today.
Their vision for the future is incredible.
To build a network of 10,000 financially durable, employee-owned small businesses across America.
The result? Empower generations of business owners to retire confidently and narrow the wealth gap through employee stock ownership.
TeamShares transforms small-business norms, preserves legacies, and creates stock wealth for hard-working employees. It's a win-win for sellers, employees, and investors.
Given how fast its scaling, I'd expect it will be a public company in the next 5 years.
Excited to see it all unfold!
One ‘How To’:
Brad Jacobs (Founder of 7 different billion dollar businesses) on financial arbitrage:
One vSaaS Breakdown:
BCV & Headline released there Vertical SaaS 50 second edition.
They didn’t list out all the companies and explain what they did / why they made the list (at least that I saw) so expect me to do that for you all shortly.
Here’s the list / link if you’d like to check it out.
My favorite so far is Squint.ai — doing some really cool stuff with AR/AI for heavy industry.
Have a product or service that would be great for our audience of vertical SaaS founders/operators/investors? Reply to this email!