Reading the Letters: Why We Hold Forever.
Between 2007 and 2021, Mark Leonard, founder and former president of Constellation Software, wrote a series of shareholder letters during a period of transformative growth for the company.
What stands out most is our steadfast dedication to the principles Constellation was founded on, and how that has created an irreplicable home for vertical market software.
Most acquirers plan their exit from the day they buy. Reading the letters closely shows what it takes to build a company around the opposite assumption, and what that means for the founders who sell to it.
A Buyer Without an Exit Date
In the letters, Leonard described the objective early on as being a perpetual owner of the businesses it acquired, meaning to make sure the general managers running the businesses are the right people to grow them over the very long term. The company has operated that way since. It carries no fund life, no investors expecting a return by a fixed date, and no eventual sale.
The letters also describe what that ownership looks like day to day. Leonard characterized the company's approach to its operating groups as delegation taken to the point of abdication, meaning decisions stay with the people closest to the product, the customers, and the team.
Small by Design
Leonard has described this decentralization as a deliberate preference. He's written that his personal preference is to keep teams across Constellation small, and push most decision-making down to the business level rather than up to head office. The reasoning traces back to two things: his own experience running small, high-performing teams, and an observation about the markets Constellation buys into. Across most of the vertical software niches he's studied, he found several viable competitors sitting side by side, with almost no relationship between how big a business had gotten and how profitable it was.
Scale wasn’t the only thing he ruled out. Leonard has written about a trade-off he's watched play out across the software industry: founders, left to their own instincts, tend to chase growth even when it costs profit, while private-equity-owned software businesses often go in the other direction, protecting margins at the expense of growth. Constellation's own aim sits between the two, treating growth and profitability as a single number to optimize rather than a choice between them.
Leonard built the incentive structure to reward that balance. General managers are paid based on a combination of return on invested capital and revenue growth, not growth on its own. A General Manager who wants that compensation to be worth anything has a direct stake in decisions playing out well over years, not quarters. Long-term thinking wasn't just something Leonard asked for. It's something he built the incentives to require.
Patterns in Practice
The letters are equally clear about which businesses Constellation prefers to buy: companies still run by the people who founded them, on the reasoning that a founder's long-term orientation shapes how a business hires, builds, and serves customers, and that this orientation is worth preserving.
Vertus Group inherits that standard directly, Magnusmode is a recent example. Nadia Hamilton founded the company, inspired by her autistic brother, to make everyday places more accessible through its MagnusCards platform, which offers step-by-step visual guides for tasks like banking, transit, and travel. Hamilton was Founder and CEO when Vertus acquired Magnusmode in May 2026. The company continues to operate as an independent business within Vertus Group.
What a Long Horizon Makes Possible
Without a buyer's clock running, the questions a team asks about any decision change. A product investment doesn't need to pay back before the next sale. A hire can be made for the next decade rather than the next valuation. Customer relationships can be built on the assumption that they will outlast any single ownership cycle. Teams get to think about the long-term implications of each decision, because the business is expected to be around, and run by the same people, to live with the results.
That horizon also changes the relationship between the business and its owner. Autonomy and buy-and-hold forever go hand in hand. With no next sale to prepare for, there's no reason to manage the business toward one. That creates a rare kind of trust, and that trust gets decades to develop. An owner working to a fixed holding period rarely has the time to build it.
Holding forever is also what keeps autonomy alive. Trust takes time to earn, and a permanent owner can give it the time it needs. As that trust builds, decisions stay with the people closest to each business, and each business has more room to run on its own.
The same permanence makes a third principle possible: the sharing of best practices. Because no business is ever sold, what one learns stays inside the group. General managers share what's worked, learn from what hasn't, and carry those lessons across verticals. Over decades, that has built a set of best practices for vertical market software that is truly one of one. You can't buy it, and you can't fast-track it. Anyone hoping to replicate it would have to work just as hard, and for just as long.
That expectation isn't only for the teams working under it. It was tested at the top of the company itself this past year.
Leonard no longer runs Constellation’s day to day. But the practices built during his tenure are perpetually ingrained in the company. Mark Miller, who took over as president, said Leonard's approach to decentralized leadership and long-term value creation will endure as the standard the company runs on.
What This Means for a Founder
The letters describe a buyer built around a different objective than most. For a founder weighing a sale, that structure is worth understanding before an offer is on the table. Vertus is one of the buyers built this way, the same group behind the Magnusmode deal above. If you're weighing a sale, we're glad to talk through what that looks like.
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