Exploring the rise of holding companies with Michael Girdley, a successful entrepreneur. Insights into managing a diverse holding company and the opportunities it offers. Discussing the benefits of cross-pollination, resilience, and value propositions within a holdco model. Navigating time management, delegation, and the qualities of great holdco entrepreneurs. Exploring software valuations, AI impact on investments, and the changing dynamics of business acquisitions.
Understanding the activities and lifestyle of a holdco CEO is crucial before embarking on the entrepreneurial path.
Grit, passion, and hard work are essential for success in holdco entrepreneurship regardless of experience level.
Valuations of software companies in acquisitions are not solely based on industry; factors like growth rate and margins play crucial roles.
Deep dives
The Profit Line: A Boutique Finance Firm for SMEs
The Profit Line provides comprehensive accounting services to small and medium-sized businesses generating $5 to $50 million in revenue. Their services include bookkeeping, bank reconciliations, tax compliance, and more.
Exploring Holding Companies with Michael Gurdley
Michael Gurdley, a successful entrepreneur, shares insights on holding companies in various industries, particularly software, technology, consumer retail, and education. He emphasizes the importance of understanding the activities and lifestyle of a holdco CEO before choosing this entrepreneurial path.
Key Factors in Holdco Entrepreneurship
Grit, passion, and the willingness to work hard are identified as key factors for success in holdco entrepreneurship, regardless of the CEO's level of experience. Michael Gurdley highlights the significance of individuals' drive and determination in achieving long-term entrepreneurial goals.
Valuing Software Companies and Industry Diversification
Software companies do not automatically command a revenue multiple solely based on being in the software industry. Valuations can vary based on factors like growth rate, EBITDA margins, and business model complexity, urging investors to consider industry-specific nuances in their acquisitions.
Challenges of Venture-Funded Orphan Companies
Venture-funded orphan companies, businesses with venture capital funding but suboptimal performance, present challenges in the acquisition landscape. Michael Gurdley expresses skepticism about the potential success of turnaround strategies for these companies, citing historical difficulties in finding quality opportunities.
Importance of Technological Adaptation in business Acquisitions
Evaluating the impact of emerging technologies like AI is crucial in assessing the long-term viability of target companies. Michael Gurdley emphasizes the need to consider how advancements in AI and technology may influence a company's competitive edge and operational efficiency in acquisitions.
Today I'm joined by Michael Girdley, 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.
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