HoldCo Model
A holding company is part holdings, part company. The people who forget the second part tend to regret the first.
What a HoldCo Actually Is
A holding company is a parent entity that owns stakes in multiple operating businesses. It doesn’t sell products or services itself — it allocates capital across subsidiary companies that do. The canonical examples are berkshire-hathaway (insurance, railroads, consumer brands) and tiny (internet businesses, design studios, SaaS tools). The structure allows cash flow from one business to be redeployed into another, compounding returns across a portfolio rather than within a single company.
shaan-puri described the Berkshire logic as applied to smaller operators: “The best businesses can either reinvest into the business itself — so when a dollar of profit comes out, you can reinvest it back to the top and get more than another dollar out. Buffett would take it to headquarters — the holdco. The best optimization he could do was: when he bought a business, he’d say, ‘You’re reinvesting capital poorly. I’ll take that money. I’ll reinvest it in a whole different business. You will be a little cash cow, but I’m not going to keep investing back into you for more organic growth.’”
The Tiny Model
andrew-wilkinson’s tiny is the most-discussed holdco on MFM. Jeremy Giffin, Tiny’s first employee, described the thesis in stark terms: Tiny turned $5 million of equity into roughly $500 million of business value by buying cash-flowing internet businesses and holding them permanently.
Jeremy’s broader observation: “A holding company is part holdings and part company — you’re actually running a big operating business. Tiny has north of 1,000 employees across the portfolio. That’s a big business you’re running. For most investors, that is a completely contra skill.”
This is the tension at the heart of the holdco model. Great investors don’t necessarily make great operators, and vice versa. The structure looks elegant from the outside — buy cashflow, hold forever — but underneath it’s a full-stack operations job.
The Permanent Equity Variation
brent-beshore’s permanent-equity runs a version of the holdco model with a different philosophy on fees and time horizon. Brent explained his structure in contrast to traditional private equity:
“Our model: we take no fees of any kind, no reimbursements, there’s no cash that comes from the portfolio companies or from the LPs to the GP outside of a percentage of free cash flow above a hurdle as we return cash back. We don’t use debt. And we hold for a very long time — we have a 30-year initial term on our capital. A typical private equity firm has 10 years.”
Where a traditional PE firm exits in 3-7 years, Permanent Equity treats acquisitions as permanent relationships. This changes what they’re willing to buy — boring, slow-growing businesses that would look terrible in a 5-year return analysis but generate steady cash for decades.
Flo’s HoldCo Architecture
Shaan described a lesser-known holdco example: Palta, a Lithuania-based technology holding company that owns Flo (a women’s health app doing ~$200M in annual revenue), Zing, and Prisma (a photo editor app). Palta raised $100M in a Series B.
Their pitch: “We can hire 10 super-talented European coders for the cost of one mediocre engineer in San Francisco.” The holdco structure let them spin up multiple consumer apps with shared infrastructure and allocate capital to the highest-return opportunity. Flo outgrew every app in its category — bigger than Calm, bigger than comparable meditation apps — and the holding structure is what allowed Palta to continuously reinvest profits from Flo into new ventures.
The Congo Brands Template
Perhaps the most striking informal holdco on MFM: Congo Brands, which owns 60% of Prime Energy Drink alongside Logan Paul and KSI. The founders — who prefer anonymity — first built Alani Nu (the women’s energy drink brand, over $100M in annual profit) under the Congo umbrella before launching Prime. Shaan’s observation: “If anybody asks who owns Prime, they say Logan Paul and KSI. In reality, these guys own 60% of that company.”
The holdco structure let them apply their consumer brand playbook — developed building Alani Nu — to an entirely new market with celebrity distribution as the accelerant.
The Critics
Jeremy Giffin offered the most nuanced critique of the holdco trend: “Bragging about how many businesses you own is really weird and probably a contra-signal for how good you are. Anyone who owns a lot of businesses will tell you — Andrew would certainly say — that if Tiny could have gotten the same results from one business, that would be way better.”
His deeper point: most small holdco operators are buying businesses they should have just started. “Imagine if you had just moved to Ohio when you were 18 and started a plumbing company — you’d probably control all the plumbing in the state. You’d just wipe the floor with them.” The holdco structure doesn’t create value; intelligent capital allocation does.
See also: tiny, permanent-equity, andrew-wilkinson, brent-beshore, roll-up-strategies, private-equity, boring-businesses, acquisition-entrepreneurship