Tom Shannon - Alumni Profiles - People - Batten Institute

Bowlero Corp CEO (MBA ’92) Tom Shannon had only taken two business classes in his life—both undergrad requirements—when he first sat down in a Darden classroom.

“I knew very little about the mechanics of business, but at Darden, the curtain was pulled back,” says Shannon, who, at the time, had a foreign policy degree and thoughts of government work. “I realized that business was going to provide a greater opportunity [than government work] for freedom and creativity, and certainly more money.”

In his second year, Shannon had another lightbulb moment. In an entrepreneurship class taught by the late C. Ray Smith, the legendary Darden professor “asked for a show of hands on who wanted to own a business and who planned to start one,” Shannon recalls. “After almost every hand went up, he told us that for those of us who would eventually own a business, nearly all of us would end up doing it by acquiring a business as opposed to starting one.”

A prophetic moment for Shannon. “It opened my eyes to the possibility that acquisition was the more likely path to success and there was no shame in that,” he says. “Founding a company is really sexy, but the problem with the founder model is that the failure rate is really high.”

Since that Darden class, Shannon has built a billion-dollar business through entrepreneurship through acquisition (ETA), a strategy characterized by savvy purchases of under-the-radar businesses. In 2024, the company Shannon has built–Bowlero Corp. —is on track to throw off more than $400 million in EBITDA on gross revenues of $1.2 to $1.3 billion, according to Shannon.

It started small, though. In 1994, seeing potential in a rundown Times Square bowling alley, Shannon put down $3,000 of his own money, borrowed $2 million, and purchased the business. He ran it himself for the first four years, bringing it upscale and attracting a well-heeled clientele. Revenues leapt from $1 million to $10 million in that period, far surpassing his expectations.

In 2001, Shannon pounced on a deal for a shuttered bowling alley in Bethesda, MD. He reopened it as Strike Bethesda and that property, another homerun, “proved the thesis that upscale bowling works,” he says. “I didn’t need a Times Square location for the business to succeed.”

Other deals followed. Shannon watched AMF, then the world’s biggest operator of bowling alleys, teeter for years on insolvency and built a relationship with Cerberus Capital Management, the largest stakeholder. He hoped to land a consulting role, but when AMF ultimately filed for bankruptcy in 2012, he bought the business. When the deal closed, Shannon suddenly owned 272 properties overnight. “It was one of the most exhilarating things I’ve ever done, running a huge leveraged turnaround,” he says.

Shannon says ETA is an art and a science; those who do it successfully learn to take a hard look at numbers, but also heed their intuition. Thirty years after he acquired that Times Square bowling alley, Shannon still builds a discounted cash flow model for every potential deal, a skill he learned “day one” at Darden.

“I still do all the modeling for the company because it’s the basis for decisions,” he says.

He also still flies all over the country looking at potential deals and if the financials seem “too good to be true,” he won’t touch the deal.

“You’re buying based on your expectations of the future, which is unknowable, so it comes down to intuition too—can you look at something and know if you can make it a lot better, a little better, or not better at all,” he says.

In the case of the company’s most recent acquisition, a $49 million purchase of a 60-acre waterpark outside of Chicago, Shannon expects to double profitability within two years.

As for what advice Shannon would give entrepreneurial Darden students, he says look for gems in “unsexy” businesses.

“Avoid going where the crowd is,” he says. “I was fortunate to start out in an industry that was completely overlooked by nearly everyone in the financial universe—it probably still is—so I’ve been able to buy really good assets at really low multiples of cash.”

Entrepreneurs also need to source their own deals, he says, and can do it by cultivating contacts, being curious, persuasive, and observant.

“Proprietary deal sourcing is really important,” he says. “If a deal is brought to you by an intermediary, chances are you’re going to have to overpay to get it.”

Finally, he says Darden students should feel good they will emerge prepared with both hard skills and soft skills needed to buy and run companies, no matter what industry. He recalls the transformation from his first days as a Darden student tackling his first case, pleasure boat manufacturer Yellowtail Marine. “My first-year classmates and I fumbled our way through the case in a pathetic way,” he says. “But then in the last class of our second year, there we were, back in the same classroom and here comes the Yellowtail Marine [case] again. We ripped the case apart and put it back together again in a masterful way.”

It was, he says, “complete validation that Darden had prepared me and all my classmates to run any business. It didn't matter what the business was or what the challenges were, we were prepared with a skill set to handle any problem and deal with it in analytical way.”

Not only that, he adds, “we also had the confidence to be able to go into situations with a high degree of uncertainty knowing that no matter what happens, we can figure it out.”