Garden City

garden city

Firm Headquarters: Atlanta, GA

Date Founded: February 2020

Investments to Date: Under 10

www.joingardencity.com

This page was updated Sep, 2020

Investment Approach

Our country is experiencing what the financial markets call a “Silver Tsunami” where the majority of small to mid-sized businesses (EBITDA of $2-10M) in our country are owned and operated by someone past retirement age. Given the majority of their children have no interest in taking over the business and they’re typically too small for large private equity funds yet too large for independent capital sponsors, they’re desperately in need of a liquidity/succession plan. Garden City is a purpose-driven buyout holding company (similar to a Private Equity fund) that buys, grows & forever-holds family-owned service businesses in the Southeast. We have raised $35M of permanent capital to create a lasting holding company where all service workers have an opportunity to prosper, thrive and flourish. We’re actively looking to partner with small to mid-sized business owners who are seeking to retire and need a succession/liquidity plan. Once we invest, we keep the management team intact and come alongside to assist with culture, technology and sales. Our mission is to build the most caring and innovative service companies in the world. Our investment criteria is the following:

  • $2-5M of EBITDA

  • Strong level of non-owner management

  • 7+ years of operating history 

  • Majority buyout (70%+ ideally)

  • Highly fragmented markets (as we intend to use cashflow for roll-ups)

  • Diverse customer base (no more than 15% concentration for a single customer)

  • Low CAPEX business (ideally all people/labor-oriented)

  • Low regulation

Focused Geographic Regions of Investment: 

  • Is all of your activity in the US?
    Yes

  • What states?
     FL, GA, TN, MS, NC, SC, AL, KY, LA

Focused Industries of Investment:

  • Agricultural 

  • Healthcare

  • Energy

  • Construction and Engineering

  • Transportation

  • Consumer Services

  • Other: Business Services

Previous or Active Portfolio Companies:

Completing Fundraising

Investment Example:

An example would be a service business located somewhere across the Southeast that currently does $2-5M of annual EBITDA, has at least 7+ years of strong operating history showing profitability, durability and sustainability, a strong level of non-owner management that is willing to remain on, provides a service that is non-cyclical and will be needed for the next ten years at a minimum, has the ability to scale due to low CAPEX, and has low customer concentration. Example of the types of industries we target are: janitorial, elderly homecare, fire inspection, pest control, engineering services, HVAC, security, waste management, restoration, logistics, etc.

Capital raise strategy

  • Average Investment Size: $1M

  • Minimum investment amount: $500k

  • Are you setup to accept charitable capital through National Christian Foundation or other listing platforms? Yes. 

  • Total Assets Under Management: $35M

  • Total Number of Investors: 40

  • Total Number of Investments to Date: Under 10

  • % of Capital from Top 3 Investors:  Less than 25%

  • Financial Reporting Frequency to Investors: 

    • Quarterly (for financial reporting on portfolio companies)

    • Annual (for audits)

Michael | founder and ceo

Michael Arrieta (LinkedIn) is the Founder and CEO of Garden City. He was an early employee at DocuSign where he joined as Chief of Staff to the CEO and then served as a Global Vice President until 2020 where DocuSign has now achieved a $45B+ valuation. In 2014, Michael founded MAV Ventures, a venture capital firm investing in technology companies committed to advancing their industry & the world. Portfolio includes Impossible Foods, Tonal, SalesLoft, Blue Bottle Coffee, Extend, AdQuick, Primer, Haystack TV, Kepler, SpyCloud, Seniorlink, Databank, and more. In 2012, he was a leader at WYSE Technology until acquired by Dell for $1+ Billion where he went on to serve as Chief of Staff of the Cloud group. His first job was in High School selling Cutco knives where he was the company #1 sales representative for consecutive years. In 2016, he was recognized by Forbes as “30 under 30” and holds a Bachelor of Arts degree from the University of Alabama. On the personal front, Mike is a follower of Jesus that seeks to honor God in everything he does, husband and father of two children.

Spiritual Integration and Impact:

Faith Driven Investing can span a wide range from high yield to concessionary returns that have a higher level of spiritual integration. Having clear expectations of this philosophy is key for the movement. Each investment is unique and you might want to select multiples but if you had to choose one quadrant that best fits your groups spiritual integration and financial performance targets … What would it be?

Lower to middle market businesses are typically acquired for 4-5X EBITDA. If a business is acquired at 4X annual earnings, the unleveraged annual IRR equates to 25% which is significantly above market returns; this also assumes no leverage and no growth. In regards to spiritual integration, given that we have majority ownership control (51%+), we maintain the ability to decide what we feel best supports our family of employees to ensure their lives are holistically enriched (spiritually, economically, socially). In regards to spiritually, we seek to have a wide array of services such as chaplains, Christian-based counseling, prayer groups, etc. 

Describe the Spiritual Integration Activities of the Fund:

  • See above. It varies from company to company however everything we do is to ensure that everyone has the opportunity to thrive, prosper and flourish in God’s image.

Is Impact and Spiritual Integration Tracked?

  •  N/A

Are you partnered with any other organizations?

  • Yes

A lot of Investing Conversations look at Social Impact related to the United Nations Sustainable Development Goals. Is there one of these that most resonates with your organization?

  • Absolutely. #8 to provide decent work and economic growth for all.

WHY The FAITH DRIVEN INVESTOR?

  • Why are you compelled to be certified and a part of the Faith Driven Investor Group?

    In order to truly build a lasting holding company that’s comprised of the most caring and innovative service companies in the world, we must partner with mission-aligned partners and organizations such as the Faith Driven Investor Group.

  • Does the leadership align with the Unifying Principles on Faith Driven Investor and agree to the Code of Conduct? Yes

  • Who nominated you to be listed on the FDI site? Henry Kaestner, Justin Forman, etc.

Learn More

  • Key Contact Name: Michael Arrieta, CEO

  • Email: mike@joingardencity.com