Episode 13 - Bakari Akil, Graves Hall Capital

In this episode, host Nick Lall interviews Bakari Akil, Managing Director of Graves Hall Capital. 

They discuss Bakari's unique path to becoming a successful acquisition entrepreneur, including his most recent acquisition of a $30 million burlap bag manufacturing company. 

Bakari also shares his experiences as a lecturer at Cornell and Columbia Business Schools, his founding of New York's largest private equity hedge fund group on meetup.com, and what led him to launch Nomad Noir, a community for black digital nomads. 

Bakari offers extremely valuable insights on leveraging unconventional routes in entrepreneurship and business acquisitions, forging strong relationships with prominent figures like Dr. Cornel West and Tim Bovard without prior connections, how to approach deal analysis, and his daily habits that have led to his success.

Transcript

00:00:00 NICK LALL
Welcome to the Entrepreneurship Through Acquisition podcast. I'm your host, Nick Law, and I am very honored today to welcome Bakari Akil to the podcast. Bakari is an acquisition entrepreneur who, as managing director of Gravesall Capital, has acquired multiple businesses, including most recently a $30 million burlap bag manufacturing company. He's also a lecturer at Cornell's Business School teaching entrepreneurial mindsets and previously lectured at Columbia Business School as well. Bakari started the largest private equity hedge fund group on meetup.com, which now has over 5,000 members here in New York. And he's also the founder of Nomad Noir, which inspires black digital nomads to pick up their home office and work abroad. And that's something Bakari himself has been doing over the past year or so, traveling around, working from different countries. all of that is barely just scratching the surface so clearly a lot of very exciting stuff to cover today i'm really excited to have bakari in on the podcast and i've been waiting for this one for a while but something i actually want to start with is i actually was taking a brief look at your linkedin profile before the podcast and i saw that on your application to go to college at morehouse you got a recommendation letter from dr cornell west and That was something I didn't even catch at first glance when we first connected. So

00:01:19 NICK LALL
I was wondering if you could talk a little bit about that recommendation letter and how it was that you originally got to

00:01:25 BAKARI AKIL
know Dr. West. Sure. The way that came about was actually kind of interesting. Some people who know my story know that I attended Morehouse College and during my time there, I was struggling to get the money to finish my undergraduate institution. And so at some point I decided to drop out of college and drop in and start sitting in on the lectures and at different universities. And I was a philosophy major when I was at Morehouse. And at some point it just dawned on me like, you know, who's the most well-known black philosopher in the country? Cornel West. Okay. More likely than not, Cornell wasn't going to be in New York at some point. And so I googled it and come to find out he was teaching, doing a theological seminary. And some people know years later, I did the same thing where I learned that Tim Bovard was teaching a course at Columbia Business School on entrepreneurship through acquisition, which is how I got introduced to the world. But maybe two or three years before that, I came across Dr. West and found that he was teaching at Union Theological Seminary and decided to drop into his course. And so I sat in for the entire course, participated in the group discussions and some of the work, et cetera. And at the end of the course, Dr. West was aware that I was auditing his course. I asked him directly, hey, good job on auditing the course. And I really enjoyed your feedback in the class. Why are you deciding to take the class? I said, right now I'm trying to get back into college. I'm trying to finish my undergraduate. And I feel like maybe having a recommendation from somebody like you at the top of the field that I'm trying to study would have some sort of influence on Morehouse, considering they're a Black institution. And he was like, well, no problem. I'll send that recommendation letter over. And so you'll notice on the letter, and if anybody's listening, you can go on my LinkedIn page and pull up the letter there. It starts out, Dear Brother Wilson, If there's any doubt of whether or not that... Professor West, when he talks, he's always, brother this, sister that. He's addressing that to who was the president of Morehouse at the time, Dr. Wilson, asking him to give me a scholarship so I could finish my school year. That said, the letter had no effect. Dr. West, who was almost eternally in controversies, just at that moment had publicly—well, not just at that moment. He had been doing this for years, but it was becoming very loud that he was doing it, that he was criticizing President Obama, who was in office at the time, about drone warfare and a bunch of other things that he had, specific criticisms about America's relationship to the poor, a lot of issues that I personally were sympathetic to because I was actively in those moments. But Morehouse was trying to get the attention of Barack Obama so that he would come and speak at the commencement. And so a letter coming from Cornel West who was like criticizing the guy that's trying to get to come speak at the school, it was just poor timing. And so as a result, the letter had no effect. So that continued my journey, ultimately got me into entrepreneurship. It's a great

00:04:30 NICK LALL
story. I guess no matter what, you can never overcome politics or timing, but It's still very impressive to get a letter from Dr. West, which I guess does lead me to my next question, which is where do you think this sort of drive and hustle that you have initially came from? I mean, it's pretty clear that you were doing things that most people wouldn't think to do or at least have the courage to do, reaching out to Tim Bovard or Cornel West. starting the largest private equity group in New York, becoming a successful search for an entrepreneur when you're coming from a background that was quite different from typical search for entrepreneurs, at least at that time. So I was wondering if there were any early childhood experiences or values you were raised with, innate traits, what do you think caused you to have such a strong drive and be so resilient?

00:05:19 BAKARI AKIL
Sure. And just a point of clarification, as it relates to the group that I founded, the group I founded is called the Alternative Investments Club of New York. It's a group that I founded through meetup.com to bring entrepreneurs and investors together. And according to the meetup.com statistics, it's currently the largest private equity and hedge fund meetup group that they have on the platform with about 5,000 members. We hosted events out of a 40-40 club for something like six years. and only stopped about the time when I decided to take this trip around the world with Remote Ear. And so our last meetup was sometime in June. And still trying to figure out if there's a way for having some people from my group still run that group while I'm abroad, but we'll see how it ultimately plays out. But as it relates to the drive, for me, I was just trying to get out of poverty. That was it. there weren't that many very clear paths to take to try to pull that off. And so I was looking for all different approaches that might make sense. I explored just straight up trying to get a degree and completing it that way. Once I couldn't get the degree, I tried to figure out a way to earn some money to pay for my degree because I kept thinking that the way to do it was going to be by getting a job that was going to pay for my lifestyle. And When I started to explore some of the writing around personal finance and started to explore the approach that the entrepreneurship through acquisition world has, I started to realize that the solution to my problem didn't come from trying to find a middle-class way of getting into the workforce and finding a job that paid 80 grand or 90 grand or something like that, which is, to be fair, a significant amount of money. But simultaneously, it also keeps you on that treadmill. You're still in the rat race. You're trading your time for money. And I was trying to find a path to completely remove the threat of poverty from my life. Being on that hamster wheel and then one day you get fired or the company closes or all types of different things that have happened to me in my career as a worker have all been preserved. My personal safety and security has been preserved because I own assets that generate more than expenses that I have on a monthly basis. And so I was looking for a route to make that possible and ultimately came across Entrepreneurship Through Acquisition and the Search Fund World. To me, that was the clearest way to make that possible. So that's why I approached it with Augusta that I did.

00:07:45 NICK LALL
Sure. Can you talk a little bit more about how you came across ETA as an option and maybe the journey from learning about it to your first acquisition and what

00:07:54 BAKARI AKIL
your first acquisition was? Yeah. All those questions could probably take like a full two hours. I'll try to focus on one and then we can pick up the others later in the conversation. But the first one, how I came across Entrepreneurship to Acquisition, it was actually YouTube. As I was reading personal finance books and trying to get myself acquainted with the language of finance and business jargon and understanding the theory and methodologies that support wealth building. There was an acronym that I kept seeing pop up. I don't actually know the first time I saw it. I just remember seeing it a lot. And a lot of books, either they would mention it and they would just keep it going. They'd be like, these are different ways you can do it. And they would mention the acronym and they would keep moving. But I hadn't found a book to that point that just explained the concept in full. And so it was in the back of my mind. And then one day I just went to YouTube and I typed the acronym and LBO. And that was probably the day everything in my life changed. I wish I could go back to that day and remember and just jot down, because I don't even think I appreciated the significance of that moment. But that was when I learned that you could buy a company. And I knew companies could buy companies. I was aware of that. But the idea that a person could go out and organize capital to acquire a business, that I had never even heard of that concept before. And so it was inspiring to me. I started hearing stories of people who had done it at different points in the last couple of generations, but I hadn't heard a story yet of somebody my age or my educational background who had accomplished it. And so just Googling, I came across this article called Early Career LBO, and it's the precursor article that Rick Ruback and Royce Yedcuff wrote, the two professors from Harvard Business School who subsequently wrote Think Big, Buy Small. It was the article where they were explaining the reason why MBAs should go out and buy companies and how it's been happening through the Harvard Business School. And when I learned about that, I was like, oh, these guys are about the same age as me. The only difference between me and them is they have maybe two years more work experience. How does that prepare them for buying a company any more than it prepares me? So from my perspective, I was like, I'm going to go after this. But at that time, entrepreneurship through acquisition was a very niche kind of concept, which it still is, but there was almost no literature about it. There were only a handful of books And some things where you have to pull information from one chapter of one book and pull it from another chapter of another book to put together. But there was no cohesive... At that time, as I mentioned, Think Big Buy Small had not been published. Walker Diebold still hadn't published his book. So there's all this content that hadn't existed. And so at the time, some of the books that I was using to inspire me and keep me focused were a book called Cash McCall, which was published in the 60s. A book called Why Should White Guys Have All the Fun that was published in the 90s. And so, this was some of the people who in fiction or in real life had done the work that I was thinking about trying to accomplish. And so, from my perspective, I was like, I'm going to need somebody to really introduce me to this. And so, I came across Tim Bovard again through YouTube and saw a video of his where he was explaining search funds and entrepreneurship through acquisition. And so I Googled his name, and just like Dr. West, he was going to be in New York. He was teaching at Columbia Business School. And so I decided I'm just going to go sit in that class. That's how it all got started. Another

00:11:19 NICK LALL
example of that working out really well for you, I was wondering, well, I guess the Cornell West didn't lead to the expected outcome, but at least to get the

00:11:27 BAKARI AKIL
right nation found out. To be fair, the situation coming out of that class with Tim, it's not like the next day I owned the company. It was work. It was years of nonstop work to get to the point where I'm at now.

00:11:43 NICK LALL
For sure. I guess one question I have about both of those situations is, what advice would you have for a younger person now who wants to create these sort of relationships with mentors like you did with such high-level people? I guess you mentioned that you just went and sat in on their classes, but is there any other thing that you think you did that allowed you to create such a good relationship and have them willing to recommend you?

00:12:05 BAKARI AKIL
Honestly, I would say, I don't think anybody should really go into, like I didn't go into Dr. West's class for the purpose of getting his recommendation letter. He just at some point looked at me and said, what are you looking for? How can I help you? And I think the best advisors, the best mentors, the best supports you can get will ultimately come from a person recognizing something in you than the other way around. So just being a hustler, being a go-getter, just maintaining that. Ultimately, the person who is looking to advise you or mentoring you will see that and reach

00:12:39 NICK LALL
out. Yeah. So show your passion and character first, and then they'll want to help you after

00:12:44 BAKARI AKIL
that. Makes sense. Or they

00:12:46 NICK LALL
might not. They are made out of that. But

00:12:48 BAKARI AKIL
if you're trying to do this, it's not necessary for you to go first find a mentor. In fact, I would say it's probably better for you to go first find a deal. So getting to the acquisition, once you

00:12:59 NICK LALL
started buying businesses, how did you go about it? I mean, I think you probably didn't do a traditional search fund, but I'd be curious to know what your approach was.

00:13:10 BAKARI AKIL
So I've completed two acquisitions so far. The first I bought NYPCorp, which is the burlap bag manufacturing company. And I completed an acquisition of an educational technology company. The burlap deal I did with a private equity firm. The educational technology deal I did with a family office. I initially came into this world specifically to do it as a search fund. I wanted to raise $400,000 and then use that $400,000 to search for a company to buy and then share the economics the same way that everything breaks down in Stanford Business Primer. And what ultimately happened was the investors who I was reaching out to about backing me for the search refused to back the search, but they were comfortable giving me capital when I found a company. which I think to most MBAs who want to do this search, who are committed to the search fund model, I think many of them would probably have passed on the goal of trying to do a search fund if they were unable to raise the money. And I'm not saying that just from a guess in the air. I have many friends who started with me looking to buy a company in 2016 and 2017 and 2018 and 2019, who I watched finish business school, try to raise a search fund, fail to raise a search fund, and they currently work in corporate jobs. There's nothing wrong with that. That's what getting an MBA provides for you, right? The flexibility to be able to say, hey, I'm going to go into a corporate job or I'm going to do something entrepreneurial and no one looks or bats an eye at you one way or another. For me, it was do or die. I was going to buy a company no matter what. And I didn't see myself as having the option to take a corporate job as a corporate development leader or anything like that or an investment banker or a private equity person because I hadn't yet completed the deal. And so I wouldn't be able to say to somebody who was evaluating me, hey, I've done all these deals, so therefore you should support me. Now, it's a lot different, right? Like I get calls from people who ask me, hey, you want to come and lead my corporate development team or lead my M&A team or something like that? But at the time, I didn't have that cachet. And so for me, it was do or die. You got to buy a company. So that was the approach.

00:15:16 NICK LALL
Totally. What was your process for searching for the company? Were you looking for them to brokers or doing your own outreach or what was the approach?

00:15:24 BAKARI AKIL
I mean, I had three separate approaches. The first was bankers and the brokers, just like anybody else. I'm sending out emails, having nonstop phone calls. I'm trying to keep sure my website is up to date with all the correct information. So that if somebody's looking for something, they know I'm the technique watching my invite for deals that come in. And that remains a big part of my sourcing process. There's some technologies that are in there, Axios, Warren, and others that will source for me. But for the most part, that's the approach. The second half of it is reaching out directly to business owners. And so there are platforms where you can get the email addresses and phone numbers of other business owners and reach out directly to them. And then the last one, which we referenced already, is the Alternative Investments Club, the group I founded to introduce me to entrepreneurs and investors. breeding in and around New York. And I would host events on a weekly basis and something like 20 or 50 people will come out. So, you know, over the course of the month, I would meet like 200 people from the New York area. And I'd be letting them know, Hey, I'm looking to buy a company. If you know anybody looking to sell a company, you know, keep me in mind. And so find deals coming from there, find deals coming from owners and find deals directly from brokers and bankers.

00:16:37 NICK LALL
Yeah, a club is a really good resource that a lot of people aren't doing stuff like that. So that's smart. When it comes to tech company, how did you know that was the one that you wanted to buy? Were there any characteristics of it or relationship with the seller?

00:16:52 BAKARI AKIL
Yeah, I mean, there are a lot of good characteristics about that one. The big thing that was cool about that business is that it was both a government contractor and a technology business. And the government contract portion of the business represented the majority of the revenue. But the majority of the EBITDA was coming from the technology business. And so if somebody was looking at the business on a cursory basis, you would just say, oh, this is a government services business. And most investors don't want to invest in government services businesses, which is great. because there was nobody who was really looking at this business. For instance, when I actually went with the business owner, when I left from my meeting with the business owner, I still thought it was a government services business. And so I was like, I'm going to pursue this deal just because it's the company that I have on the table, but I was not certain I'm going to be able to raise the money cord. And then I went out and started talking to... Actually, before I started talking to investors, we visited the business and That's when I was exposed to what was actually happening in the company, which is this huge educational technology company, EvaDot-wise, that represents the majority of the EvaDot for the business. And so I was able to structure this deal. with a multiple that represented what a government servicer would trade for, even though there was an educational technology business inside of it that would trade for much higher. A government servicer would probably trade for four times. An ed tech business would trade for eight times. So our multiple was below the eight times, even though it shouldn't have been, if it was straight ed tech business. And so that was a story I went out to investors about. highlighted for them when they would look at the company and ultimately got them on board to help me complete the transaction. For

00:18:28 NICK LALL
sure. Sometimes it requires digging a little bit deeper in these deals and that's how you find something that other people aren't paying more for, aren't considering. really cool. You've talked about how you came from not a traditional background to do a search fund and there's a lot of people who would want to have this sort of financial success but don't have the right network or connections to do that. Do you have any thoughts on how entrepreneurial acquisitions could be expanded beyond the current group that's pretty elite and just a small number of people who, I mean, it's definitely expanding pretty quickly, but it's still a pretty small number of people who are involved in this. I guess, first of all, do you have any thoughts on how it could become more widespread? And secondly, do you have any mission

00:19:12 BAKARI AKIL
to help do that? Sure. So funny enough, when I spoke at MIT earlier this year, and that was literally one of the points I was bringing up. I said that this space is very elitist and a bunch of other things that I pointed out. So if anybody was at that, you already know my sentiments on that. That said, I think the first thing that has to happen for this space, if it's going to get expanded, is I think people would need to be made aware that this is an option that they can even explore. I think most people still, if you ask them, Hey, have you ever considered buying a company? They would shut down the thought immediately. It's not a function of people being dissuaded from doing this. It's a function of people not realizing that this is a possibility that's attainable. And I think once people become more aware of that, I think that's when people will start to play a role. And I think that's happening right now. I think that the conferences and the events and all these things are starting to expose more and more people to this option. There's a benefit to that in that the more people come into the space, there's more opportunities to see people like me and others achieve financial success, et cetera. I think the danger of it is that it becomes saturated, but I think we're way before saturation point. I think if one day I turn on CNBC and they're talking about entrepreneurship through acquisition, I think that's the day when I'll be concerned. But right now, if you say the phrase ETA to people, people will still say estimated time of arrival. And as long as, Until the day when people say ETA, oh, you mean Entrepreneurship Through Acquisition? I think that's when the tipping point is. It's sort of like VC. Right now, you ask your average person in the street, they know what a VC is. One day that'll happen with ETA, and that's when the saturation point will probably have been there.

00:21:01 NICK LALL
Yeah, I think we have a long way to go still and awareness is definitely the first step. So for yourself now that you, I guess you mentioned that what was driving you was to escape poverty and now you've achieved financial success at this point owning two companies. I was wondering what drives you now in life? What's your purpose that pushes you forward?

00:21:21 BAKARI AKIL
I think right now I'm on a documenting mission and on a exposure mission. So I've been spending a lot of time on podcasts over the last month or so. I've been working on a memoir, sort of talking about the experience of China. a company coming from my world to being as successful as I've gotten and traveling the world with remote here, et cetera. And so as of right now, that's the focus of my life. It's not an overall big picture. This is where I'm going to be for the rest of my life kind of thing. But I think as of right now, it's just telling the story of this, documenting it, and then probably continuing to buy companies. like this world, I think that there's more to do. But I do think that this is a highlight moment. It's a good moment to put a pin, tell people what's happened from beginning to now, and then continue the story going forward.

00:22:16 NICK LALL
Made you decide to do remote your

00:22:18 BAKARI AKIL
I've always wanted to travel the world, but I didn't have a sense of where to go and how to do it. I didn't really want to be in the countries all by myself with no support system. I also didn't like the idea of going to a country for three days and then flying back home. In those three days, you spent like $4,000 in combination with flights and a hotel and all that. To me, that just felt extremely wasteful. And so instead, I wanted to find a way where I could do slow traveling, but I didn't have to control all the logistics myself. And one of my friends told me about this program called Remote Year that they handle your housing, they set up your flights in between the countries you go to, they set up stuff for you to do while you're in the country, your co-working space is handled, all the logistics around this whole thing are handled. And the cost of it is about the same amount of money as I would pay on rent. in New York. And to me, if you're a digital nomad or a person who's going to work remote, To me, it was the best option for both getting a chance to see the world, but simultaneously not having to cram all this logistics into making it happen. And so that's why I took the remote year approach.

00:23:25 NICK LALL
Totally. I did the digital nomad thing for a while. And it's, if you don't have something like that, it always takes at least a couple of weeks to get set up in the new country. So it's not taken care of. Do you have any favorite countries so far or any favorite experiences from your remote year?

00:23:40 BAKARI AKIL
Yeah, the first country I went to was Cape Town, South Africa, and really enjoyed my time there. Greece was pretty cool. That was the next country I went to. From there, I went to Valencia, Spain, and now I'm in Istanbul, Turkey. And yeah, overall, I would say the countries that Moheir picked are all pretty good. I think my highlight so far has been Cape Town, but we have a lot more countries to go to. From here, we go to India. And so yeah, I'm enjoying this a lot.

00:24:05 NICK LALL
Awesome. How do you split your time between all of the different things you're doing? I mean, you're in different countries, you're owning two businesses, you're teaching classes. I guess, given that you're doing so many important things, there must need to be some level of prioritization. Do you have any practices to set your schedule or

00:24:23 BAKARI AKIL
decide what to work on? For me, it's just about timing. That's all. As long as I'm able to outsource. And for instance, the remote ear thing is really a outsourcing, right, of all the logistics and everything. If I don't have to handle that and remote ears handle it, then that's good. And if the cost is comparable to what I would be paying at home, then there's no threat there as well. Then when it comes to teaching, a lot of that stuff is just like, I know this like down pack. Like, so my session at Cornell is mostly focused on engagement between me and the audience. It's a lot about exposure. Like most people who sit in a class, they just don't know that this is possible. And so I'm trying to show them the method under which these things become possible. And so that's usually useful for them. The second piece to this is ultimately just time management. That's the key to all of this and outsourcing. So when it comes to the business, you know, NYPCorp that has a CEO, I sit on the board. So that's not something I have to focus on on a day-to-day basis. I oversee the business as a board member and as an event sponsor, but that's not taking up a crazy amount of my time. The memoir, I'm working on it along with a co-writer, and so we're collaborating on that. For me, it's always about bringing in people, even as I'm documenting my trip for Remote Year, which I do on my Instagram and YouTube channel, Nomad Noir. I have a producer who handles most of that work in there as well. So that's the approach there.

00:25:50 NICK LALL
Yeah, delegation and outsourcing definitely make sense. And so both of the companies now you're no longer serving a CEO, you're

00:25:57 BAKARI AKIL
on the board for both. So I did not serve as the CEO of the education technology company. When that company was bought, the CEO who was running the company remained on as CEO. So that was his role. And at NYP Corp, we decided to hire a CEO to run that business instead of me stepping in

00:26:13 NICK LALL
and running it. Got it. That's great. Good. Was there anything else that you wanted to talk about or cover?

00:26:19 BAKARI AKIL
No, I think this was pretty good. I appreciate you inviting me on the show and really want to just be a resource for people who are listening. If anyone's listening, just feel free to reach out to me via e-mail. I'm sure Nick will put the e-mail in the description, but it's bakariatgrapesallcat.com. Instagram, as I mentioned, and YouTube, where I'm documenting my trip. That's nomadnoir.co. And then I'm on LinkedIn, so feel free to connect with me there. So yeah, I'm always available and willing to chat with folks about this work.

00:26:54 NICK LALL
Awesome. Thanks so much, Bakari.

00:26:56 BAKARI AKIL
No worries.