Michael Arrieta – Building the World’s Best Holding Company – Ep.117

My guest on this episode is Michael Arrieta. Michael is the founder of Garden City and has raised $51 million in permanent capital to acquire family-owned businesses across the country. The raise was completed in March 2020, and already they have three wholly-owned companies and minority stakes in two.

Michael came highly recommended by Brent Beshore, and I can see why from our conversations. It’s clear that Michael is a student of business and has mental models of hundreds of companies floating around in his head. He also has a remarkable sense of empathy and mission at Garden City, a mission which we discussed throughout the episode extensively.

During our conversation, we talk about raising without a private equity background, how to involve investors in your portfolio companies as mentors, how they recruit, the technology and systems they implement at their companies, and all things Chick-fil-A, a business Michael has studied extensively. Please enjoy my episode with Michael.

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Links:

Michael on LinkedIn

Garden City Companies

Why it only costs $10k to own a Chick-Fil-A Franchise

Topics:

(4:42) – Michael’s background and career

(7:27) – What was it about VC that caused you to hesitate to pursue your career in that world?

(8:59) What memories stick out from your time as a chief of staff that have helped you in your current role?

(12:00) – What’s the thesis behind Garden City?

(13:39) – How did you go about fundraising?

(17:12) – What started to become possible once you saw an increase in capital interest and were there any tradeoffs you had to make in order to secure more funding?

(22:14) – Where are you seeing your deal flow come from?

(24:55) – What are some of the companies that you own?

(28:52) – How do you approach implementing technology in your acquisitions?

(31:42) – How do you find great people to bring on to your companies?

(34:11) – How much advice do you get from your investor base?

(36:25) – What do you view as your role within Garden City?

(39:21) – How do you build relationships with leaders in the companies you acquire?

(41:26) – What companies inspire you?

(47:46) – What college class would you teach if it could be about anything?

(48:25) – What strongly held belief have you changed your mind on?

(49:41) – What’s the best business you’ve ever seen?

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