My Guest
Michael Girdley is an entrepreneur and investor who has spent the past 30 years building a personal holding company boasting over $100M in annual revenue, comprised of 12 businesses across software, technology, consumer retail, and education, among others.
Outside of managing his holding company, Michael is deeply involved in the North American SMB ecosystem: He co-hosts Acquisitions Anonymous, a podcast that reaches over 10,000 listeners weekly, where he and his co-hosts dissect real businesses currently up for sale. He also offers two online courses, educating prospective entrepreneurs on the Holding Company model, as well as best practices on how to find and acquire a great small business. He is also an active investor in small- and medium-sized software companies through another holding company, Dura Software, that invests in mission-critical B2B software companies spanning multiple niches.
Michael is also active on social media, having built a base of 170k+ followers on X (formerly known as twitter), and publishing a newsletter with over 20K readers.
Listen in Your Browser
Michael Girdley on The Rise of Holding Companies – In The Trenches
Listen on Other Platforms:
Apple | Spotify | Breaker | Pocket Casts | RadioPublic
Questions Asked
Holding Companies 101
- Tell us about yourself, your career, and what has led you to what you are doing today
- What is a holding company? How do they differ from private equity firms, who also own portfolios of individual operating companies?
- What, if anything, connects the 12 companies that you own within your Hold Co.?
- Why did you choose to build out a holding company as opposed to pursuing other entrepreneurial models, like a start-up or entrepreneurship through acquisition?
- Hold Co.’s seem to have become quite popular among aspiring entrepreneurs over the past ~1-3 years. Why do you think that is?
- How might you advise a prospective entrepreneur who is considering each of these 3 entrepreneurial avenues (hold co, start-up, or search fund) for their own career?
- Is the owner of a Hold Co. more of an investor, or more of an operator? Why?
- What is the benefit to portfolio companies of being housed within a Hold Co.?
- When trying to appeal to a seller, how do you position Holding companies as being a better alternative to other types of acquirors like PE, strategics, or even search funds?
- Do you need to make controlling investments in your operating companies? Why or why not?
- How do you balance the benefits of industry specialization within your Hold Co. versus the benefits of industry diversification?
- What types of operational best practices apply equally well to a fireworks retailer as a software company? How transferable is your “playbook” across unrelated industries?
- How does one effectively spread their time across 12 completely different operating companies?
- What separates a great Hold Co entrepreneur from a good one? What mistakes should Hold co entrepreneurs avoid making in their early years?
- What have you learned about hiring experienced CEOs vs. inexperienced ones? Do certain industries or business models lend themselves more to one vs. the other?
- How do you test for “grit” when hiring a CEO?
Acquiring Small- to Medium-Sized Software Companies
- What is your view on the state of SMB software valuations as we record this in December, 2023?
- Does a software company automatically command a revenue multiple just because it is a software company? Why or why not?
- What “archetype” of a software deal do you tend to pursue most frequently?
- How do you think about software companies where service revenue is relatively high as a percentage of total revenue?
- There has been an emerging thesis around “Venture Orphans” over the past 12-18 months. Is this a thesis worth pursuing for prospective acquisition entrepreneurs?
- To what extent are you considering AI in making investment decisions? How do you think about whether AI is a net-positive to net-negative for any given target company?
Download a Written Transcript of Our Conversation
Access a text-based version of our discussion to highlight, copy or take notes by clicking on the button below
Thanks to our Sponsors
This episode is brought to you by The Profit Line. The Profit Line is a boutique finance and accounting firm that provides a wide range of accounting services to small and medium businesses generating anywhere between $5M to $50M in revenue. On a fractional, outsourced basis, they do day-to-day bookkeeping, bank reconciliations, month-end accruals, tax compliance, and financial statement preparation, among countless other things. I was a customer of theirs for 7 consecutive years while running my own company, and am speaking as a happy customer. Book a call with Founder and CEO, Fern Gordon (Ferngordon@theprofitline.com) or visit their LinkedIn page to learn how they might be able to help you exactly as they helped me.
This episode is brought to you by Oberle Risk Strategies, the leading insurance brokerage and insurance diligence provider for the search fund community. The company is led by August Felker (himself a 2-time successful searcher), and has been trusted by search investors, lenders, searchers and CEOs for over a decade now. Their due diligence offering (which is 100% free of charge) will assess the pros and cons of your target company’s insurance program, including any potential coverage gaps, the pro-forma insurance pricing, and the program structure changes needed for closing. At or shortly after closing, they then execute on all of those findings on your behalf. Oberle has serviced over 900 customers across a decade of operation, including countless searchers and CEOs within the ETA community.
Discover more from
Subscribe to get the latest posts sent to your email.