It is a well documented fact that the majority of large corporate entities trade, and therefore valued, at a higher multiple of earnings than their smaller, more fragmented competitors. Spectrum Equity Fund will either participate or invest in roll-ups or consolidations (combining several smaller businesses into one larger entity).

In order to be considered an industry should be largely fragmented with few dominant market leaders. Once the integration process begins the target companies should stand to benefit from cost reduction strategies, economies of scale, new technologies, improved operating systems, better access to capital, board expertise, professional management and strategic direction. Combining strong standalone businesses needs to yield efficiencies, marketing synergy, buying power and provide access to more affordable expansion capital. In the end the customer must benefit from such a roll-up or consolidation in order to generate the necessary returns on equity and assets deployed.

Spectrum Equity Fund can also provide the components necessary to accomplish the consolidation including industry executives and management team members, platform company candidates, equity funding and debt financing as well as an exit through a private sale or IPO of the larger entity.