Set talented people free through the power of ownership.

Bloomberg

Podcast M&A — Rococo Punch acquisition by Audily

The Hollywood Reporter

Coverage of Rococo Punch and the Audily network

99 / 100

Quarters private equity has outperformed public markets

↑ Institutional Investor — Why Private Equity Wins

3×

More assets at retirement for investors with private market exposure

↑ Institutional Investor — Why Private Equity Wins

#1

Growth equity ranks highest among all PE strategies — above VC, buyout, and infrastructure

↑ CAIS — Introduction to Growth Equity

On employee ownership

Incentive alignment works. It has always worked. A person who owns what they build behaves differently from a person who is paid to maintain it. The research — from academic institutions, institutional investors, and the federal government — says the same thing. Ownership changes behavior. Behavior changes results.

On fund size

J.P. Morgan and PitchBook analyzed 1,690 private equity funds across two decades. The finding is unambiguous: first-quartile performance is overwhelmingly concentrated at small fund sizes. Above $10B, it nearly disappears. We are deliberately small, and we intend to stay that way.

Investment focus

Fund structure

Invest for the long-term.

Compounding rewards patience. We commit capital the way an owner would — measured in decades, not quarters — and resist every pressure to trade short-term optionality for long-term value.

Minimize fees.

Every dollar lost to management fees is a dollar that doesn't compound for investors. We carry no management fee, no carried interest until a 6% hurdle is cleared, and no cost structure built to justify itself.

Ensure proper – but not excessive – diversification.

Diversification eliminates company-specific risk. But over-diversification merely mirrors an index at a higher cost. We hold enough positions to protect the portfolio without diluting conviction into meaninglessness.

Straightforward businesses.

We don't invest in things we don't understand. Simple models, recurring revenue, high free-cash-flow conversion. No moonshots, no black boxes, no businesses whose results depend on a single customer or contract.

Passionate, effective, high-integrity managers.

Strategy is cheap. Execution is everything. We back people who care deeply, operate well, and do what they say. Character is not negotiable — and it's the hardest thing to audit, so we start there.

We don't theorize about employee ownership — we practice it. Every company we've built grants meaningful equity to its frontline operators from launch. Our portfolio companies absorbed two failing businesses, protected their investors, and generated $336K in earnings for four principals who own those companies. KKR's Ownership Works coalition validates the playbook at scale — $1.7B distributed to frontline workers across 90+ companies — but we've lived it from the start.

Most funds raise capital and then hunt for deals. We built our portfolio companies ourselves, so we know their unit economics, talent pools, and growth constraints from the inside. Each platform is a natural landing pad for bolt-on acquisitions — adjacent services, shared overhead, customers who want more. We source deals others never see because we're already operating in the space.

Private equity has grown enormous — and so has the competition for deals. Hundreds of funds chase the same pool of $50M+ EBITDA businesses, and multiples reflect it. A company with $500K in earnings might trade at 4× in a private small-business sale; the same cash flow commands 12× or more in the PE market. By staying deliberately micro-cap, we access an arbitrage before institutional money can follow. No lavish offices, no army of analysts, no management fees to justify. Capital goes to work.

The Government Accountability Office is the supreme audit authority in the United States — the investigative arm of Congress, independent of every agency it reviews. Our principal trained there, conducting financial audits of the SEC, the Department of Defense, and the U.S. Treasury. That background means we rebuild the books from source documents, stress-test every assumption, and look for what sellers hope you won't find.

2021 — The venture studio

Built from a $10,000 check. We launched our first companies from scratch — granting meaningful equity to every operator from day one, not just the people at the top. No fund, no management fees, no outside capital. Just the thesis in practice.

2022–2023 — Proof of concept

Over three years we launched and scaled a portfolio of employee-owned companies — growing from $5K to $1.3M in revenue while absorbing two struggling businesses and protecting their investors. Every company remained employee-owned. The model worked. We wrote about it honestly in annual letters that didn't hide the failures alongside the wins.

2024 — Co-Owner Fund LP

We formalized our track record into the Co-Owner Fund LP — a Texas limited partnership seeded with ~$1M in equity transferred by the founder for $1. The fund brings in aligned outside capital to accelerate a strategy already generating results: acquiring small businesses at single-digit multiples, with employee ownership baked in from day one.

Sam Sawhook

Co-Founder