Constellation Software’s business model is akin to that of an investment company, with a specialization in asset-light, cash-generating vertical market software operators. The software niche has attractive economic characteristics, including negative working capital, as cash is often received before services are rendered. The company’s playbook is to identify, acquire, manage and develop operators through a highly decentralized model with a small headquarters and six operating groups. As Constellation has grown over time, capital allocation decisions have become increasingly decentralized, with the exception of rare large transactions that require approval from corporate headquarters. The acquired businesses are independently managed, owned indefinitely, and Constellation increases cash flow by redeploying excess cash to acquire additional businesses.