# How to start a Holding Company (full tutorial)

Channel: Greg Isenberg
Video: https://www.youtube.com/watch?v=3-K_VfHOJhg
Duration: 47 min
Language: English
Words: 9351
Transcript page: https://viewrankai.com/tools/youtube-transcript/3-K_VfHOJhg

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[0:00] I describe hold coing as you own multiple businesses and you don't run any of them uh is is the way I think about it and the way most people practice kind of this idea of being an being a hco entrepreneur and you have to understand if you're going to get into whole coing or entrepreneurship or anything like you know what drives you in terms of your passion right and then how do you craft the business around making sure that why and that mission that you've been put on this Earth to kind of create like that that portfolio of assets or that job for you like reflects that and makes makes it so you

[0:31] can live your best life which like I'm super stoked to hear you saying you're living your best life so kudos to [Music] you Michael girdley one of my favorite people and I run a holco um but I'm actually new to this I've only been doing this for four and a half years I feel like when I when I need some Banger advice on what to do with hold Co girdley is my number one call um what are people going to learn today by the end of this episode yeah yeah well I think um number one I think we'll go through and kind of expose people to the

[1:09] hold Co strategy it's a different strategy from the way most people think about entrepreneurship talk about I think the different types of hold co uh we'll be able to talk about how to put your own holdco together if you decide you want to do this uh we'll talk about some of the mistakes I see people make and like you I feel like I'm still learning a lot this year has been you know uh let's say a humbling year in terms of dealing with a lot of stuff going on and I've learned a lot about H H coing this year so we can talk about that stuff and then um we're talk about

[1:38] some of the just tactics that I've seen people do uh in terms of you know who do you need to have around the table who are the right advisers all that kind of stuff so that's a lot to try to cram into 45 minutes but we'll see how far we get if very least if I could just expose more people to understanding this is an option uh and if it's right for you it's right for you that's great um then I'll consider this a win and hopefully we'll have fun too that's also goal number one of course all right well let's uh let's get our hands dirty by the way this is

[2:06] the first time I've ever prepared slides for a podcast so great job picking like a good topic and giving me homework I think it's really good so uh called This Hold Co one-on-one one1 um so let's move on to the next slide here um so you know the way I talk to people about what hold CES are is it's a unique entrepreneurial strategy and it's something that uh I think a lot of us have been exposed to by seeing some big corporations like Brookshire hathway and stuff like that um but I started to get into it when I started to see people doing this kind of unique

[2:39] entrepreneurial strategy that's different and the way I kind of describe it to people is that the classic way people have gotten into entrepreneurship is you own one business and you run that business right and that's the way most of my friends are right they own a business 98% of their net worth is tied up in that business they're the CEO of that business and they wake up and every day they work on that uh I describe hold coing as kind of the opposite of that right you you own multiple businesses and you don't run any of them uh is is the way I think about it and the way

[3:10] most people practice kind of this idea of being an being a h Co entrepreneur so yeah so you have like I think the Spectrum so most of us are familiar with Warren Buffett um you know he's somebody that everybody espouses to kind of be like um you know I have some thoughts about the Mystique of Warren Buffett I think a lot of it is really crafted I think there's a lot of BS there that people buy into um that he has this holding company and he doesn't really have to work very hard like that's great but for the rest of us we have to work hard um especially those of us that

[3:40] don't have the benefit of being in business for 90 years like he has but the other end of spectrum and like where I play is this kind of idea of a personal holding company I think you you have the same kind of idea Greg as you think about your Universal stuff yeah absolutely yeah I mean the way I see it is uh I set up my holding company with the thesis that uh uh Community Based products outperform non-c commmunity based products so when you start with an audience and you build a community that's just the a great way to create a moe have customers lined up

[4:12] and all of our businesses are based on that yeah Super Genius um my stuff and we'll talk about it because I think I have a different kind of thesis around stuff is just a hodge podge of things that I like working on that's the core thesis so whe that works or not we'll see well I mean what's the scale of your holding company if you're if you're able to talk about it uh I tend to talk about these days in terms of employees so across all the businesses are about 600 people working there right yeah so it's working uh it's working something's working something's working there we still there's still 600

[4:50] people with jobs uh that are good jobs so I'm excited about that um cool so yeah um I've gotten out of like a lot of people and maybe have opinion on this a lot of people on social media like talk about like Revenue numbers and stuff as a way to measure scale and impact and like I've really gotten away from it just because I find it so disingenuous and also people are kind of numb to it so anyway that's why I don't talk about it that way anymore um so this I pull up this slide here and it's cutting it off so let me see if I can fix that um but basically

[5:22] the idea here is the difference between like like being a VC where you like are an angel investor where you invest a lot of things and being a holdco to me is holdco like has a significant ownership stake in all these businesses and you as a hco owner or a hco operator like you might own 30% or 60% or 80% of individual businesses and you have either a controlling interest or you have a significant amount of influence on that business so kind of the difference for me from somebody that's like an angel investor or VC versus like an actual hold cooperator is like you are in these businesses like you're a

[6:02] real owner of these businesses or at least either majority or a big significant stake and like if it's not like you're not a whole co owner if you're like a 05% owner of 42 different startups which I know a lot of people are there's nothing wrong with that but that's totally different from from this shh don't tell anyone but I've got 30 plus startup ideas that could make you millions and I'm giving them away for free these aren't aren't just random guesses they're validated Concepts from entrepreneurs whove built $100 million plus businesses I've compiled them into one simple database compiled from hundreds of conversations I've had on my podcast but

[6:49] the main thing is most of these ideas don't need a single investor some cost nothing to start I'm pretty much handing you a cheat sheet the idea bank is your startup shortcut just click below to get access your next cash flowing business is waiting for you okay and just to clarify one thing so when I talk about startups I do like mostly Tech startups I we do do some agency stuff um but it's mostly Tech startup stuff I think a lot of the stuff that you do you have you have a mix of non- tech and Tech right so my question to you is uh holding

[7:35] companies what type of businesses can be in them yeah so it's a pretty blank canvas in terms of how people want to approach it and it's a it's a big label when I talk about holding companies I think you can have all kinds of different businesses in there um you can have asset different asset classes as well so in my world like I own not only like big chunks of real businesses and I'm on the boards of those and I'm in there with the management you know supporting them and that sort of stuff there's also like real estate assets so like I have a a big portfolio of real

[8:06] estate um that I control and that's not being an investor in somebody else's fund that's like literally stuff like you go look at the deed and like my names on it so you know when when I look at the definition of a holding company and we'll talk about the different types here in the next couple slides um you really have a lot of freedom to Define what sort of assets you want to have in there and you're holding basically Equity right ownership of those things so um those could be a portfolio of high growth startups if you figure out a way to own big chunks of those things you

[8:37] know where you're not not a passive investor in them like you could totally do that if you wanted to be agency and services businesses you can totally do that if you wanted to be a mi a mix of different stuff whether it's tech tech and non-tech like I do you can totally do that as well um it all kind of ties back to the world you want to create for yourself which is kind of the fundamental theme of of hold coing for me like like ultimately I think a lot of people create a situation where they let their business dictate the lifestyle they're going to have and what they're

[9:06] going to be doing every day and all that kind of stuff and like you for example Greg are like super passionate about Community you talk about it all the time like the amount you you write about it on Twitter like clearly you're super passionate about community so like you've created a world in which your hold code like ties into your passions and the same thing for me like I'm passionate about a bunch of different spaces and I've created a world for myself as a whole coowner where like I get to work on all those types businesses all the time which honestly people ask me like you know how are you

[9:34] enjoying doing a hold company holding company and the truth is I've never had more fun in my entire professional career and it's because it's the most creative I feel like you can get because you've you design a world for yourself where it's just oh I'm really interested in all these businesses and I just get to come in be creative and then almost be like a fun Uncle instead of a parent um which is a place to be yeah let me jump ahead because I think this really I mean this a really good topic like for me for me I think that when you do hold coing you really craft a world

[10:11] for your business where it serves you in terms of how you want to be living your every day so like I think you just described like you love like advising the the GMS and CEOs that run the businesses you love you know working on something that's very passionate passionate for you in terms of community and then tying that back back into supporting those folks but I don't think either you or I is really passionate about being in there like making the trains run on time and optimizing those things and you know I think that's one of the key things I talk to people about is like you have to understand if you're

[10:45] going to get into whole coing or entrepreneurship or anything like is that really you know what drives you in terms of your passion right and then how do you craft the business around making sure that why and that mission that you've been put on this Earth to kind of create like that that portfolio assets or that job for you like reflects that and makes makes it so you can live your best life which like I'm super stoked to hear you saying you're living your best life so kudos to you thank you I only say it and I say it only because I want more people to to do this you know I

[11:15] think there's probably a bunch of people who are in jobs or starting companies that are a bit bored or whatever and I didn't know this was a viable option until I just stumbled into it and that's why you're here uh the I mean the funny thing for me is like I stumbled into it as well right and the reason um the reason I got there was I was owning and operating a single business that was doing really doing really well and like I wasn't fulfilled right at a certain point like more money doesn't make you happier and all that kind of stuff and like I realized I wanted to be living in a

[11:50] creative space I wanted to be teaching I wanted to be helping other folks and I got more joy out of helping people like say for examp example like finding a CEO role in one of my companies and like being very excited for that role and growing and being their best self right and then being there for them to help them grow help them when they had really hard problems and then support them kind of in their personal vision for their life and like that is what makes me super happy Believe It or Not Greg there are people who find a lot of joy out of like grinding it out in one business and

[12:21] being in the details and like making the trains run on time I am the opposite of that person and like so for me my journey to get into hul coing I didn't even know the term it was just like I was Bor AF in one business and I needed to go be creative and start you know doing other stuff where I felt like I could be my my best person my best self all right so anyway I uh I jumped all over the place um so yeah so there are different types of H Co so we talked about what what you're doing like thematically Tech businesses uh around a

[12:51] specific platform that's where I would kind of describe your business so the slide I have here talks about um the four different types of hold co uh so a rollup most people are pretty pretty um pretty much understand that um I think our our my Twitter buddy I don't know if you're connected to him R Zeller is one of these folks he has a a portfolio of non-f feris foundaries that he's U bought over time he's a former investment banker got out of that whole thing uh lives up in Minneapolis great guy and he owns just a portfolio of these businesses that are Regional nonfer foundaries so they like produce

[13:26] like the types of metal like fabric for a local area and like there's like five it's five to 10 guys in a like a basically like a warehouse like taking orders and producing parts for manufacturers or different businesses and stuff like that so I would describe him as a rollup which is something where they have just basically a commoditized business or type of service where each entity in the business of the holdco is the exact same thing um and then I would describe your business as this platform type which is like you have a you have multiple categories but they all kind of group around this single idea right so your

[14:04] single idea is this idea of community and how do you like Drive the your your knowledge there and your experience there uh as something that can create a platform where all the entities like win together and I think that's really strong um there's a couple other types here I live in this kind of pure holdco thing which is basically like your Brookshire hathway idea which is like you own two three five 10 businesses and like you super I those and coordinate amongst them um but there there's no theme they're just kind of like a a set of Holdings and U you know I'm in everything from kind of fireworks to

[14:39] software to Media now so but the good news I'm passionate about all of those things so that's where it is um cool hold Co I mean obviously a situation where it's advantageous for a hold co owner um you know you can do some certain stuff that's that's typical in terms of good business hygiene providing a COR corporate Shield uh making management easier you can maintain ownership and things so just talking about kind of the structure of how people typically do this you know you create an entity and then that owns portions of other entities whether those are you know limited Partnerships or uh corporations or any that kind of stuff

[15:15] um cool so then this is where I think I start selling people on why it's cool to do a h c but is there anything like that comes to mind for you that we should talk about before I kind of go into that how do you think of you know and I'm talking to mostly the American uh uh Founders here but how do you think about LLC s corpse C Corps I know you're not a lawyer or anything like that but do you have any any Frameworks for thinking about how to set up some of these businesses yeah yeah so definitely have a framework for think about number

[15:44] one talk to a lawyer that's my number one framework all the time um so but but in terms of how to to do those the way I'm actually personally set up is everything rolls up to me personally like I I don't actually have a brook haway style um burst your haway style holdco because like there's no reason to like it's just another tax return I would have to fill out and it's just annoying so um but there are other situations where say you're like you know sea and Xavier from enduring Ventures where you would want to have a C Corp uh at the top tier and in their

[16:19] case like they have outside investors you know at the very top of the holdco and then there are individual entities that are either pass through entities or C Corps um that live down there so you know at a high level for North American folks um you have to make a decision based on the outcomes you want to have for your holdco as to how you structure things and allow cash to move between different entities um and there are certain types of situations in which you would want to have a pass through entity which is a sub chapter S entity under the US rules and there are times in

[16:54] which you would want to have a C Corp um which is a subchapter C corporation so most of the big corporations are sub chapter C corporations um and then the way I I feel like I'm getting ready to give a legal lecture on this stuff so this is why you should call a lawyer don't listen to some guy at a podcast but um there are times in which you want to have passor enties and there are times in which you want to have C Corps and it all ties back to what the cash flows are going to look like what the owners structure is going to look like and then

[17:23] what the eventual exit for that individual holding or the the hold Co in general is going to look like so uh I think maybe I'm explaining it in a way that uh my number one message is talk to a lawyer and talk to your tax um talk to your tax adviser and actually most people Greg that are doing um doing hold Co they end up like you don't go to loan like one of the things I talked about when I when you know I put together a course on all this stuff um but talked about like this All-Star team of people that are folks that are there to help

[17:57] you make these decisions because there's a a complex Set of Legos that get put together to establish how your hold code should work and that's like a CPA an accountant a Tax Advisor structuring attorney transaction attorney if you're going to be buying and selling things and so on so um you know there's no like black or white Do It um the one thing I would tell that is that most people tend to way over complicate it like um you can keep it as simple as I have in terms of kind of how you structure stuff where things just flip to you individually rather than having like a bunch of llc's

[18:29] and stuff like that but um anyway I don't know if that's the most direct answer other than it's complicated well no I think it's helpful I think it like it it that's kind of like the world of options for you but the the bottom line is yeah speak to a lawyer figure it out have a team have a team around you that's advising you um obviously you're not going to have this All-Star team of advisers on day one or day Zero um but this is something that you like build towards for sure yeah and we kind of put them we put them in order of where they tend to show up um yeah

[19:00] and um and and go from there so cool so all right so let's talk about how most people put together a whole Co and and get into it um you know it's interesting and I don't know if you've seen this Greg but like things tend to go in waves of kind of excitement in social media and the population stuff like so I mean I think there was a time where everybody wanted to be a VC and then you know that was kind of like the mid mid-2010s do you remember that dude I was I was like in there you know I I was fighting every ounce of my body was

[19:34] fighting not to be a VC I was actually a venture partner at a fund uh two funds actually because I was like oh maybe I would like the VC thing um but realized it was just kind of like pure a bit of peer pressure and um so yes uh I remember that very vividly and then yeah so I believe it or not you you are stronger than me I I raised a couple VC funds so and I'm still here's the thing people need to know about getting into VC especially if you're a good person like the live the life uh cycle of those funds like especially with how elongated it is to

[20:13] exit these days like your even your good Investments where you're like returning your fund and stuff like that like as a VC you're going to be working on those deals 10 or 12 years sometimes 15 years after you make them uh and before they exit right and so like I'm still working on a fund uh on a regular basis for deals that we did back in 2014 so like 10 years on and some of them have no no time to exit anytime soon but they're like return the fund type deals because that's the other thing about PC like you're you're your bad deals tend to fail quickly the deals that are going to

[20:47] hit like they take a long time uh and they keep compounding and then eventually they hit so anyway that's that's something people need to understand about VC it's not like you could just quit like you raise money from people you have to keep working on things for a decade plus so anyway um but you're stronger than me I ended up ended up doing it and then I decided I didn't want to be a VC anymore which is totally fine um okay so people ask about like how do they go from like zero to holdco and like this is the seven-step process that you know I highlight for

[21:17] people um there's a way to get there which is kind of the way I got there which was like I had one business and I started to just like get into a second business and I got into a third business and a fourth business and I looked up and l in hco um you know I encourage people to actually step back and try to have a plan of how they're going to work their way into hold coing over a number of years um it's a long-term wealth building strategy it doesn't just you know it's not just like start a company sell that company like that's you know

[21:43] you're you're building up a portfolio of things over time and letting them compound so these are the seven steps I tend to run people through like have a plan figure out what you want out of the whole plan in terms of owning multiple businesses start to put together what your organizational Design's going to be run it by your attorney run it by your Tax Advisor run it by other folks and then ask yourself like is this really G to be making me happy because I think ultimately a mistake I see a lot of hold Co folks make and entrepreneurs in general is designing to have a

[22:12] successful business not to have a successful life and I think hold coing Done Right needs to be like Greg your passion about Community reg who I talked about before with the non-fair as foundaries is like passionate about that blue collar kind of backbone of America uh me I'm passionate about a bunch of different stuff because I have whatever add or whatever it might be you don't want to be in a situation which your business is creating a life that you hate and I think by planning it out this way I encourage people to really be you know thoughtful about that so you end up in a good place quick ad break let me

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[23:20] marketing.com and that's why I invested in it they're so confident in their approach that they offer a 30-day Sprint with 100% money back guarantee who does that nowadays so check it out highly recommend boring marketing.com uh let's see okay so let's talk about some of the fun things to do with um why a hold Co is awesome so number one I think it's pretty clear like you and I have a ton of fun doing it like I really enjoy it like I tap dance to work feeling like I'm working on really important stuff I'm doing High leverage things to create opportunities for other people and like getting to work with CEOs who are

[23:59] inspiring right um and this idea of Leverage for me is super fun um and it it's this the reason I like it is with a hold code you get to often do what I call these asymmetric bets other people call it too I didn't make up the term but basically like the idea is you can invest in something like you've invested in creating several businesses Greg so I consider these asymmetric bets like you can invest $100,000 to get a business off the ground and that may turn into a business that could generate you a million dollars a year in net profits right that's an asymmetric bet and the

[24:31] the worst thing that can happen is you lose your $100,000 and some time and so as a hold cooperator you don't just necessarily buy things and bring them into your portfolio you can also create things and given what's happened with the prices of assets over the past decade I have spent a bunch more time incubating and creating new businesses than I have trying to go buy them just because I can get some much more leverage by making these asymmetric bets where you know I invest a few hundred, or or whatever to get something going and then hopefully that multiplies and becomes something really big over time

[25:03] um and I've had a number of these kind of go that direction where like my annual return on that initial investment is 100 or 200% per year right and that's like the fun of Bas or metric bets yeah I think uh the other thing to note here is the cost of starting a technology enabled business and that could be a service business that could be a Marketplace could be a consumer social mobile app uh could be a d Toc company you're standing on the shoulders of giants and you're able to just to you know use things like Shopify and use things like vzero and repet so the cost

[25:41] has gone down dramatically so it is my opinion a really I mean you agree with me but um it's it's sometime it's probably more cost effective to incubate right now um especially if you're doing Tech enabled stuff a million percent well this is where you know I'm 49 years old so I like I came of age in Tech like in 1999 so 25 years ago and my wife had moved out to the Bay Area to work on like an early version of like hotels.com like a booking engine for for stuff and uh she took me into their office at one point and they had like this massive office they'd raised

[26:26] tens of millions of dollars and before they even had satisfied their own like first customer they had built out an entire like mini data center in this San mono office building like in California and uh it was just like two or three of the millions of dollars went to servers and building on a tech stack and you know different middleware and all this kind of stuff and today like man it's like Shopify and all this kind of stuff it just makes it makes the startup costs um and doing some of these businesses that are really low capex like like you can do that same business you get the

[27:01] same business they build off the ground for a few thousand dollars right between AWS and the the stuff you can just turn on and stuff that's already built um it's just a different planet sorry I had to I'm almost 50 so I kind of start have to do and Greg the like back in my day talks so it's it's can't help it so um it's true yeah and when uh when did you start your career I mean I've always like as a teenager been doing you know Tech stuff but like I moved out to SF in like silkon Valley in you know the early 2010s so that era was the era of the App Store

[27:44] coming out and there's an app for everything and in that era it was it cost you like a million dollars to get a mobile app out the door minimum minimum so you know I just spoke to someone like a 21-year-old kid actually basically who um you know built a mobile app using AI you me you hear these stories and then it gets goes viral on Tik Tok and it's like it you know he's making 100K a month Mr and then he incubated another one now he's incubating another one all of a sudden he has a hold Co um so I think you're going to start hearing

[28:23] more more these stories and I know a lot of people hate those stories cuz they're like you know he got lucky or whatever it is but it's it's the big reason the two big reasons why you're going to hear more and more of those stories is one it's cheaper than ever to incubate two the distribution ex is is on on the phone right like you you just have to tap into it I mean easy for me to say just tap into it that's very hard to figure out how to create distribution but if you can you know it could go gangbusters and what does this mean

[28:53] within the context of what you're talk talking about it means that your Roi could be quite good yeah a million percent um yeah and so I do think um so we've talked a bit about the people like doing low capex or low Capital requirement kind of businesses uh as a whole Cod strategy right you build a portfolio of things that don't take much capital or you can bootstrap your way off the ground so like a there's a portfolio um like Jesse Tinsley who you may you may have seen him on Twitter he's a friend of mine he has a whole portfolio of low capex recruiting and

[29:31] kind of recruiting process optimization businesses so like he's started to acquire a bunch of stuff I think he has recruiter.com as the domain name so don't quote me on that but he's built he's built quite the the thing there but he's been able to do it all from his personal Capital just because it the businesses he's in don't require a bunch of capital to get off the ground or to even acquire but there's this other end of the spectrum where people um need greater access to Capital to buy some of this stuff or to build a portfolio around some of these things and so some people uh as a path to kind of build

[30:03] their their hold Co will go and get outside Capital so the enduring Ventures guys sea and Xavier have done this right they raised money to go get their you know to get things started and then you will actually see also folks who will Access Capital to leverage their personal personal Holdings and so what what that means is so for example like tiny so Andrew Wilkinson's business like they have their businesses that are owned as a hold Co but then they also have a fund management business that they run where they raise money from Outsiders to go buy businesses that they then oversee as part of their their

[30:38] holdco operation so there's this idea when you do a holdco it can provide great there's potentially a greater access to Capital people will can potentially buy equity in the holdco itself they can buy equity in the deals uh they can be partners in those deals and those sort of things and then the other thing is um that's pretty cool is if if you look at some people with hold CES uh you can start to basically become a better or a more attractive borrower to lenders and other folks like that so for example let's say that you um you know are a rollup of a bunch of

[31:12] foundaries like red seller is uh if you wanted to go buy an additional Foundry and bring that in you could maybe Finance 100% of that because you have the equity in your existing business and the track record there to where a bank might give you enough Capital to go and buy one of those new businesses without having to inject any any Capital into your business at all so basically you get some of these economies of scale you get these ideas where you can be more attractive to the different types of funding sources that are out there yeah we have a we have a line of credit that we can draw down on um if we

[31:45] want um and I think yeah a big reason why a bank feels comfortable doing something like that is yeah they look at it and they're like this isn't just a tech startup you know that Google changes their algorithm and it's done for them right they see a diversified uh Holdings of businesses and because of that you're right they do feel a bit more um comfortable and the rates aren't crazy and now to be honest I don't like drawing down on that line of credit um for a lot of reasons but the basic reason is I just don't like debt in general but you know sometimes you look at something and you have an

[32:23] unfair advantage to incubate something um and it just requires capital and you you might not want to just go you know not many people talk about this but like pitching investors Equity Partners takes a lot of time and energy um so you might just want to draw down a little bit um invest and then pay it over time yeah uh you know I think you're right I mean people people really discount it's oh it's easy to raise money and put these things together people really discount how much time you have to spend like managing those investors and relationships and dealing with conflicts that arise you know why aren't you doing

[33:01] the things the way I wanted to them or if a deal goes south right like like managing investor relationships and some of that stuff like I'm with you a lot of times just like ah this would be so much better if I just was doing it by myself because that that fewer folk calls um super cool uh so the other thing um just it's one of these economies of scale I talked to people about it like a hold code can provide you ways of having uh tax savings um there's you know there's in the US there's typically active earnings and passive earnings um those are diff those

[33:36] you know if you if you have pass passive losses you can use those to access uh offset passive gains you if you have active losses you can use those to access active gains and that sort of thing um the nice thing about it is say you have a portfolio businesses and one of them loses money in a year um and then another one earns money like you could potentially use that to offset those things and and have some tax savings and tax efficiency around the whole thing so again contact your tax advisors and if it's not in the US there's different rules uh I know Canada

[34:07] has stuff that involves maple syrup rules around this stuff and and molsen beer but um anyway that's just a Canada insult sorry but um I was waiting for it I was waiting for it to be honest and it it exceeded my expectations honestly you're so oh hilariously you know I don't know you mentioned that you had interacted with one of my teammates Greg uh and you you like the person well I didn't mention to you he's he's a Canadian so that's why that's of course you guys got along perfect so totally his breath smelled like maple syrup so I knew I liked them uh he's a great guy he's a great

[34:44] guy that's that's one of the secrets I think people are sleeping on especially if you're hiring remotely like and and I've been doing a lot of global hiring over the past few years as I know you are like I think people are sleeping on Canadian tent and especially if you need to have people that understand North American culture uh whether it's through writing or you know being able to really connect with people in that way like Canadians especially you know greater Toronto area folks like amazing like opportunity for American companies to hire yeah we have tons of teammates in Toronto and Montreal and first of all

[35:20] it's literally $1 us as we're recording this it's $1 us is 139 Canadian so you get a 30 9% like on the financial side you're getting a 39% discount basically uh right there um so there there's there's there's an opportunity also to Arbitrage a little bit um and then yeah I mean for example Toronto if you need them to come into New York or LA or San Francisco for a meeting there's like probably like 10 flights a day you know a day daily right so it's it's it's different than you know getting someone from a far country or something like that 100% 100% um okay so we had talked

[36:04] about trying to do 45 minutes so let me cover one more thing which I think is really interesting about hold Co and then we can close however however makes sense and then I'm happy to make this deck available to folks and then my team also told me we have to promote our conference so we have 30 seconds to do that that would be great they y they yell at me because I forget to self-promote so anyway that's why we do it um so last thing I want to talk about that's cool about hold Co like I think it's actually um a good strategy to make yourself more um resilient in terms of

[36:37] um having risk avoidance right so like if you own one business and something bad happens somebody steals from you or you know something happens that can cause that to all fall apart well if 99% of your net worth which a lot of people who are entrepreneurs that's the way they're set up 90% of their net worth is in that one business like by having a portfolio of businesses and having a diversified set of things that you build through a holdco you can avoid some of the risk that normal entrepreneurs have and that's where one of the strategies and one of the things I like about H

[37:10] coing is you can try to have things that potentially like you know avoid cyclicality like they can be in a situation where um if one is very weather dependent like the other another business can be not weather dependent um or if you're dealing with something where there's kind of one business in decline you can try to balance that with having businesses that are growing so I think it's a really good way to build a more resilient life cycle uh or a lifestyle for yourself though there are ways to still get yourself in trouble just like in business like Leverage leverage theft all those things are overleveraging theft all those things

[37:44] are still challenges that a hold Co has just like a normal business has but the cool thing is when you have a portfolio of things potentially you can drisk your lifestyle and drisk your future by having a more you know kind of differentiated set of stuff that isn't necessarily going to be you know all come down at once through regulatory changes tax law changes um societal changes technology distribution or uh changes like all those things like I think it's a cool thing when you have a whole Cod portfolio to be able to kind of drisk yourself and have a more stable kind of income base and asset base over

[38:20] time it's interesting that you have integration between poros cuz you know from my understanding um the Warren Buffett Andrew Wilkinson type model uh they don't do much of that they keep it very separate H you know what's your thinking on that and are they you know why are they so anti uh coordination between and collaboration between companies yeah yeah so I think um I think a couple things uh one is uh I think that the level of centralization you should have totally depends upon your asset type so let's say you build a hco where you have uh 14 uh 14 restaurant franchises right um and like let's say seven of them are

[39:13] Burger King and seven of them are Wendy's like it this is this is a very common American holdco style where there's families that are multi-unit operators of franchises they have built great businesses this way and they're making millions of dollars a year it would be stupid for you to have an HR person and a marketing person in every single one of those like stores right like you should centralize that kind of stuff you should centralize your bookkeeping you should centralize your ordering and so to me the level of centralization that makes sense where you have like interaction between the the individual Port codes where you're where you're centralizing stuff at

[39:49] headquarters that totally depends upon the types of assets you have and what you need from those assets right and so more homogeneous those assets tend to be the more you can centralize stuff and so the you know the other end of the spectrum is you decentralize those things you push things out to the edge uh into the individual portfolio companies and you let them do that stuff and you don't centralize things like purchasing ordering best practices HR Finance all that kind of stuff and so you know I think what you're seeing with Andrew or what you're seeing with you know with Brookshire hathway or any of

[40:26] you know Roper or any of the kind of big Dana her big holding companies is they have built a level of centralization that ties to the asset type that they have uh and it makes sense for them to not centralize so much and you know I think there are tons of big CA case studies where like I talked about with the franchise thing where people have centralized things to great effect our buddy red Zeller has a lot of stuff centralized around how he's doing you know HR Finance marketing all that kind of stuff uh with all the different assets that he's acquired so it really just ties back to the type of asset you

[41:01] have and for for those guys it makes a ton of sense and for the other folks you know being centralized makes a ton of sense but it all just it depends on the type of asset you have and just curious you know in your in your Empire how centralized or decentralized are you radically decentralized yeah so yeah I uh and I think there's another thing about it like I'm actually a pretty crappy operator um and by operator I mean somebody that's like good at not chasing shiny objects staying um you know making making the boring stuff happen that is essential to every business running well uh I am incredibly good when there's you

[41:42] know the create the creative juices get flowing I get excited about it and by the third time I have to do something that feels rote or uninteresting like I kind of phone it in or sometimes I'll just forget about it and so because of that like I don't have like the personal confidence to be like I'm G to create this centralized like Finance thing and this centralized like sales thing and you know all these kind of things where I have to operate something in order weld in order to succeed like I'm trying to build a universe that like plays to my strengths and weaknesses and I'm very

[42:14] aware of like hey like don't don't try to do things that I know I suck at that's fair and I guess you know the way to think about this it sounds like is it's a spectrum so you know you could be mostly decentralized with a couple things that are centralized or you can be mostly centralized with a few things that are decentralized yeah I I think it's exactly right cool uh let's see okay so we're running out of time um so you know I'd love to share these slides if anybody wants some there's a bunch of stuff here about how to operate a hold Co um I have some

[42:54] really strong views about all that kind of stuff um and if anybody wants to get into all this type of stuff um you know love to share it with them look and I think I think there's two types of people out there there's people out there that go and they're like hey I think uh I think there's this one way to live and I think you should do it I don't think hold coing for everybody I think it requires a certain set of skills I think you and I are some somewhat unicorny and not feeling like we need to have our hands to control every single thing and uh like not

[43:23] everybody's like that and I think this if this is the type of Lifestyle somebody wants to have like I'm a huge fan of it and it's the best thing for me and I tap dance to work every day even when things are sucky and and I double tap dance when things are great but uh I think I would say hey this is this is a possibility for the type of career somebody can create and the type of wealth building strategy somebody can have and if it's right for you great and if it's not right for somebody like no problem but you know just know it's out

[43:48] there and and do what's best for you uh most of my friends as I told you before they own and operate one business and they're very happy doing it and un they all take me to lunch like once a quarter and they're like how do you do what you do why do you do it because it's not right for them and they want to understand why it's right for me but if it's right for somebody like great know about it and if it's not well people should just do what's gonna make them happy I I don't really care totally I also think that if you if this excites

[44:14] you this idea of becoming you know I call a multipreneur hold co uh hold Co preneur um the first step is just building one idea building one project that turns into a product that turns into a company that's profitable and then once you get to that point then like like some of your buddies could could be like you know what I'm actually going to go acquire another business and then kind of build my own ecosystem or you know what I'm going to take some of our profits and reinvested in this opportunity um so don't think that you need to start a hold go from day one yeah the the key to yeah the key to

[44:55] doing is you need to have at least one successful business before you have two successful businesses so that's fair it's crazy how math works that way okay so my team told me I have to do this I have 15 seconds we're doing a whole conference on this uh on this uh wealth building strategy you know hold coing as a lifestyle we have a bunch of speakers signed up and because I love skiing we're doing it in Utah next spring uh some folks had been doing this hold C Conference in Cleveland um and uh we're we're we're working with them to take it over and we're M into Utah and

[45:28] it's John Wilson and and a number of other folks have been involved in this and so if anybody's interested please come we're we're about half full with the conference it's GNA be pretty intimate 125 people or so and they'll be skiing hold Co talks and a bunch of stuff to you know leave with understanding how to do this whole thing even better so if people are interested we'd love to have you uh it's not cheap but it's going to be awesome honestly I'm interested like this is this sounds fun you know so I'm interested let's talk about it offline I think I get you a discount man yes special special Greg

[46:03] deal cool awesome um dude thank you so much for for taking us through this I know uh I asked you to prepare slides but that's only because I wanted it to be focused and I wanted people to be able to see this and be able to take notes and um I really appreciate it girley where could people find you online uh I am uh on girdley decom and there's links to everything so last name girdley g i r DL y.com so I do a twice Weekly Newsletter uh I do Twitter posts like crazy I'm a LinkedIn guy now and video but links to everything is a

[46:42] curly.com so you can go to my website and uh sign up there so I appreciate it and we'll put it in the description for people who want to start a hold code but don't know how to spell girley that's that's the reality okay that was hold code 101 Michael girdley that's the Pod thank you for joining us [Music]

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