The Stewardship Model

One of the things I’ve been spending a lot of time thinking about lately is what I actually want Filterbuy Ventures to become over the next twenty or thirty years.

Interestingly, the answer didn’t start with organizational structure or technology. It started with acquisitions.

For years, I repeated a piece of conventional M&A wisdom that I’d heard from just about every investment banker and lawyer I’d ever worked with: It takes just as much work to buy a small company as it does a large one, so you might as well buy the large one.

Honestly, it made complete sense to me.

Larger businesses generally have cleaner financials. They’re often more professionally managed. Due diligence is easier because there’s simply more information available. And if the amount of work is similar, why wouldn’t you pursue the acquisition that moves the needle the most?

I believed that for a long time.

But over the last year, I’ve spent a lot more time studying businesses like Constellation Software, TransDigm, HEICO, and Berkshire Hathaway. The more I studied them, the more I realized they largely ignored that advice. They didn’t become extraordinary by consistently buying the biggest businesses they could afford. More often than not, they bought smaller companies.

At first, I thought the lesson was simply that small acquisitions compound.

I don’t think that’s actually the lesson.

The real insight is why those acquisitions worked.

The businesses they acquired already had something valuable: strong management teams, loyal customers, decades of accumulated expertise, and a reputation that couldn’t easily be recreated. Rather than centralizing everything, these companies preserved those strengths. They provided capital, systems, technology, and long-term ownership while allowing the people closest to the customer to continue running the business.

That philosophy resonates with me more every day.

Today, so much of the business world revolves around centralization. Technology has made it possible to consolidate functions, standardize processes, and manage enormous organizations from a single headquarters. In many situations, that’s absolutely the right approach. Companies like Amazon have shown just how powerful that model can be.

But there’s another model that has quietly produced incredible long-term returns.

Instead of centralizing everything, these businesses decentralized almost everything. They trusted local operators. They preserved the cultures that made each business valuable in the first place. Rather than trying to prove they were smarter than the entrepreneurs they acquired, they focused on giving those entrepreneurs better resources, better information, and a permanent home where they could continue building.

That’s becoming the vision I have for Filterbuy Ventures.

I don’t want to build a collection of businesses where every important decision gets pushed up to a corporate headquarters. I want to build a home for great businesses—businesses with capable management, deep customer relationships, and expertise in the markets they serve. Our job isn’t to replace what made them successful. It’s to help them become even better.

That’s why we’re increasingly focused on smaller HVAC and industrial distribution businesses. We’re looking for companies that already know how to serve their customers exceptionally well. What we hope to bring is infrastructure, technology, purchasing power, data, capital, and a long-term perspective. If we do our job correctly, the businesses should still feel like themselves. They should simply become stronger versions of what they already are.

Of course, saying that is much easier than actually doing it.

Buying one company isn’t particularly interesting. Building a repeatable system that can source, evaluate, acquire, and support dozens—or eventually hundreds—of businesses over several decades is an entirely different challenge. In some ways, I think it’s actually harder than doing one large acquisition because you’re not simply executing transactions. You’re building an operating system that has to work repeatedly, while respecting what makes each business unique.

I certainly haven’t figured that out yet.

But I do think that’s where the compounding lives.

One thing I hope these newsletters become is a place where I can share how my thinking evolves over time.

I’m not writing because I think I have all the answers. I’m writing because I’m curious. I enjoy studying great businesses, great investors, and great operators, challenging my own assumptions, and documenting what I’m learning as I build. Some of these ideas will become convictions. Others I’ll look back on five years from now and realize I was completely wrong.

If there’s a common thread, I hope it’s an honest exploration of how I’m trying to become a better builder, investor, and steward of capital. Sometimes that means reinforcing beliefs I’ve held for years. Other times, like this week, it means admitting that something I once accepted as conventional wisdom may not have been right for me after all.

That’s really the intention behind this newsletter.

Today, I believe the future isn’t about finding the biggest acquisition I can afford. It’s about becoming a great steward of many smaller businesses and creating an environment where each one can continue to flourish on its own.

We’ll see if I still believe that ten years from now.

But it’s the problem I’m most excited to solve today.