The FORT Podcast: Michael Arrieta – Founder of Garden City – Buying & Growing Great Companies with Permanent Capital
Michael currently serves as the Founder and CEO of Garden City, a purpose-driven holding company that buys, grows, and permanently holds family-owned companies. Once acquired, Garden City seeks to grow them through culture, technology, and sales.
Most recently, Michael was an early employee & executive at DocuSign, serving as Global Vice President, General Manager, and Chief of Staff to the CEO. DocuSign has now achieved a $30B market cap with 5,000 employees. In 2016, he founded MAV Ventures, a venture capital group that has invested in over 100+ companies and multiple funds. Michael also co-founded New Story, a non-profit that has built 2,000+ homes in developing countries and is recognized for creating the world’s first-ever 3D Home Printer.
He graduated from the University of Alabama with a Bachelor of Arts degree in Business Management, and he lives in Atlanta with his wife and three children. Mike is a follower of Jesus and seeks to honor God in everything he does.
On this episode, Chris and Mike discuss:
- His story and how he learned to be world-class at sales. (He was the #1 CutCo Knife salesman in the US)
- How Garden City values and ultimately transacts on businesses.
- How Garden City creates value for the companies they acquire.
- Why he chose a permanent capital structure.
Listen on:
Spotify
Apple Podcasts
YouTube
(2:10) – Michael’s career and background
(4:51) – What did you do that made you the top Knife salesman in the country?
(9:45) – What can get someone to believe in their product or company?
(12:46) – What does a Chief of Staff do?
(16:58) – Why do you have an affinity for boring SMB’s?
(19:50) – What led you to the realization that you wanted to start acquiring businesses?
(23:30) – What are you tangibly doing to make people the focus of the businesses you buy?
(29:21) – What’s your filter for red flags in businesses you look at acquiring?
(32:19) – In what capacity do you want the previous owner involved after an acquisition?
(33:49) – What do the first 90 days look like post-acquisition?
(37:11) – How do you find the line between letting the business run and being very hands on as owners?
(40:20) – When an owner doesn’t stay on, how quickly do you have to get on with replacing the CEO?
(43:06) – What are most of these SMB’s lacking generally from a technology standpoint?
(46:17) – How do you find someone who is going to be really accountable for making sure tech is adopted?
(48:50) – How do you approach Sales training?
(53:45) – Why did you choose to pursue Permanent Capital?
(57:01) – How do you think about the platform of being able to help people when you’re a business owner?
(1:00:58) – Is it possible to instill this mindset in an already existing business?
(1:02:33) – How does Permanent Capital work?
(1:04:46) – How do you think about cash flowing out of the businesses you own?
(1:07:06) – Do you have an example of a Christian Business owner who is killing it in both their career and their faith?
Sacred Pace by Terry Looper: https://amzn.to/3qxTMtV
(1:10:17) – Why did you consciously decide to slow down? What have been the consequences of that decision?
Becoming a King by Morgan Snyder: https://amzn.to/3Lq7GYV
The Ruthless Elimination of Hurry by John Mark Comer: https://amzn.to/3ddXrtR
Episode Summary
Michael Arrieta, esteemed for his profound knowledge in the domain of business and investments, graced Chris Powers’ distinguished podcast, offering an analytical exploration into the realm of real estate, small businesses, and strategic capital deployment. Arrieta’s insights, stemming from his vast experience and acute understanding of market dynamics, provided listeners with a deep dive into the intricacies of modern business strategies and leadership.
The podcast embarked on a journey, elucidating the importance of time and the invaluable role of a chief of staff in optimizing it. Arrieta eloquently emphasized the duality of time – where one could either choose to spend less or invest in mechanisms that effectively “buy” more time. He illuminated the concept of a chief of staff acting as an extension of oneself, capturing the essence of the leader and thereby ensuring seamless operations.
Diving into the realm of small businesses, Arrieta underscored their pivotal role in holding together our infrastructure. Drawing parallels with real estate, he presented an intriguing perspective: why not invest in businesses that offer returns akin to real estate yields? While many venture into property investments, hoping for substantial yields, Arrieta’s passion clearly lay in nurturing businesses. He advocated for building a people-centric culture, ensuring growth and development, both for the business and its stakeholders.
The dialogue meticulously dissected the concept of permanent capital. Contrary to the finance world’s transient nature, Arrieta introduced listeners to the idea of “taking money forever.” Drawing a vivid comparison, he equated it to acquiring a real estate property. A property’s cash flow, he posited, determines its valuation, a principle he seamlessly applies to businesses as well. The discussion highlighted the mechanics of permanent capital, emphasizing the importance of strategic decisions that directly impact the return timeline.
Arrieta also shared insights on the growth trajectory of private investments. In a world where businesses constantly evolve, he showcased the potential and opportunities that private investments hold, especially when approached with foresight and strategy.
In conclusion, this episode with Michael Arrieta served as an enlightening guide into the world of business, investments, and real estate. The intricate balance between making astute decisions, understanding market dynamics, and prioritizing people formed the crux of the discussion. For anyone aspiring to delve deeper into the realms of real estate and business, this episode stands as an indispensable compendium. Arrieta’s expert reflections, combined with Chris Powers’ probing queries, equipped listeners with the knowledge to navigate the multifaceted world of modern business.
The Fort is produced by Johnny Podcasts