Constellation Software’s business model is like that of an investment firm, specializing in cash-generating, asset-light vertical market software operators. The software niche presents attractive economics, including negative working capital, as cash is often received before services are provided. The company’s playbook is to identify, acquire, manage and grow operators through a highly decentralized model with a small corporate office and six operating groups. As Constellation has grown over time, capital allocation decisions have become increasingly decentralized, with the exception that rare large deals require head office approval. The acquired businesses are independently managed, held indefinitely, and Constellation increases cash flow by redeploying excess cash to acquire additional businesses.