Acquiring Minds Podcast: Scaling a Tiny Acquisition to a PE-Backed Exit

Episode Overview Title: Scaling a Tiny Acquisition to a PE-Backed Exit
Host: Will Smith
Guest: Phil Miller, Founder and CEO of Pawville
Release Date: July 3, 2025
Description: In this episode, Phil Miller shares his entrepreneurial journey of acquiring and scaling a struggling pet supplies store into an 11-location regional brand, culminating in a partnership with private equity-backed Wagway.

1. Introduction to Phil Miller and Pawville’s Genesis (00:00 - 04:20)

Will Smith introduces Phil Miller, highlighting his remarkable transformation of a single $100,000 pet supplies store into Pawville, an established brand with 11 locations. Phil’s keen eye for underutilized space and strategic zoning played a critical role in this growth.

Notable Quote:
"I saw that the store had a ton of underutilized space that could be monetized with pet boarding, pet grooming. I jumped in and bought it."
— Phil Miller (00:00)

2. Phil’s Early Entrepreneurial Ventures and Real Estate Challenges (04:20 - 10:25)

Phil recounts his initial foray into real estate influenced by Rich Dad, Poor Dad. Despite saving $50,000, external challenges, including community resistance and property mishaps, led to financial losses. His experience on cruise ships as a port and shopping guide, where he earned commissions, reinforced his entrepreneurial spirit.

Notable Quote:
"I lost all the money I had saved up on cruise ships. However, I still had my credit intact and a little bit of dignity left."
— Phil Miller (06:16)

3. Pivoting to Pet Boarding: The Birth of Pawville (10:25 - 16:17)

Phil’s wife, working as a vet tech, introduced him to the pet boarding industry. Despite lacking prior experience with pets, Phil was inspired to explore this sector. A rudimentary pro forma gave him the confidence to acquire a pet-related business, focusing on zoning advantages and potential revenue streams.

Notable Quote:
"Even though it was incredibly off, what was important was that it gave me the confidence to take that first step."
— Phil Miller (11:08)

4. Overcoming Early Financial Struggles and Building Resilience (16:17 - 27:11)

The initial acquisition in 2006 was fraught with challenges, including prolonged construction and personal financial strain. Phil shares poignant moments, such as choosing to prioritize the commercial mortgage over his house and finding solace and strength in caring for dogs.

Notable Quote:
"Those dogs were my salvation in many cases. They helped me through the most challenging times."
— Phil Miller (24:49)

5. Scaling Through Strategic Acquisitions (27:11 - 48:55)

After moving to North Carolina in 2012, Phil transitioned from a micromanager to an absentee owner, fostering systems and trusting his team. This shift enabled rapid scaling, acquiring multiple locations through partnerships like Store Capital’s sale-leaseback model. Phil emphasizes the importance of asymmetric information and continuous learning in identifying and capitalizing on undervalued businesses.

Notable Quote:
"I developed an asymmetric information advantage where we could do things much better than mom and pops in many regards."
— Phil Miller (36:28)

6. Capital Allocation and Real Estate Strategy (48:55 - 65:53)

Phil discusses the pivotal decision to separate real estate from business operations, partnering with Store Capital for sale-leasebacks. This strategy unlocked significant capital without diluting ownership, allowing for aggressive expansion. He highlights the opportunity cost of holding real estate and the benefits of focusing capital on business growth.

Notable Quote:
"By partnering with them, I could acquire multiple locations without being tied down by real estate ownership."
— Phil Miller (61:39)

7. Transitioning to Private Equity with Wagway (65:53 - 95:41)

As growth accelerated, Phil sought equity partners to sustain the expansion rate. Partnering with Access Holdings and Wagway brought professional expertise and resources, enhancing back-office operations and marketing efforts. Despite initial challenges and emotional hurdles, this partnership provided Phil with the support needed to scale further.

Notable Quote:
"Having a true VP of HR and a CFO has been amazing. They handle the back office, allowing me to focus on operational culture."
— Phil Miller (105:02)

8. Lessons on Franchising vs. Strategic Acquisitions (95:41 - 103:07)

Phil critiques the franchising model in the pet services industry, arguing that the ongoing royalty fees do not translate into substantial brand value or competitive advantages. Instead, he advocates for strategic acquisitions that leverage economies of scale and regional brand recognition, positioning Pawville as a superior offering.

Notable Quote:
"Franchises are going to be the first to topple because they pay 8% royalties without gaining significant competitive advantages."
— Phil Miller (101:48)

9. Navigating the Private Equity Partnership (103:07 - 107:30)

Phil shares the complexities of integrating with Wagway, emphasizing the importance of mutual respect and aligning visions. Despite the initial "fetal position moments," Phil celebrates the ongoing partnership and the value Wagway has brought to Pawville, particularly in professionalizing operations and implementing effective marketing strategies.

Notable Quote:
"Scott Butts has been my saving grace throughout this whole process. He understands our vision and supports our growth."
— Phil Miller (95:41)

10. Final Insights and Future Outlook (107:30 - End)

Concluding the episode, Phil reflects on the cyclical nature of business acquisitions and the evolving dynamics with larger players. He underscores the necessity of continuous adaptation, learning, and maintaining a strong company culture to sustain growth and navigate partnerships with private equity firms.

Notable Quote:
"Turnaround and a lean startup approach are inextricably linked. Those early challenges transformed who I am as a person."
— Phil Miller (54:52)

Key Takeaways

• Strategic Acquisitions: Focus on acquiring businesses with growth potential rather than just existing revenue figures.
• Capital Allocation: Separating real estate from business operations can unlock significant capital for expansion.
• Asymmetric Information: Gaining unique industry insights leads to competitive advantages and better investment decisions.
• Private Equity Partnerships: Aligning with the right equity partners can professionalize operations and accelerate growth, despite initial challenges.
• Franchising Limitations: In certain industries, franchises may not offer the ongoing value needed to justify their costs compared to strategic acquisitions.

Final Thoughts

Phil Miller’s journey exemplifies the transformative power of strategic acquisitions and effective capital management. His ability to identify undervalued opportunities, coupled with the support of strategic partners like Wagway, underscores the importance of adaptability and continuous learning in acquisition entrepreneurship.

Connect with Phil Miller: LinkedIn Profile
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Note: Some sections containing promotional content and advertisements have been omitted to focus solely on the core discussion between Will Smith and Phil Miller.