Why Startups Are Rolling Up Old Industries, and Why Two-Thirds Still Fail: PMI in Legacy Sectors, Succession, Debt vs. Equity, Acquisition Criteria, Post-Deal Trouble, and a Pre-Deal Checklist
In 2026, startups that acquire small companies in legacy industries one after another, the "roll-up," are raising money in both the United States and Japan: a $6.3 billion take-private backed by General Catalyst, Thrive Holdings at a $12 billion valuation, Hinoki's 3.1 billion yen round in Japan. Yet a study cited by HBR found more than two-thirds of roll-ups create no value for investors, and Japan's SME Agency found 24 percent of SME acquisitions fell short of expectations. This article covers why the model is in fashion, why it fails, how to see PMI through in old industries, what it means as business succession, how to split debt and equity, how to raise money and decide on deals, the trouble that follows closing, and a 20-item pre-deal checklist, all from primary sources.