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Episode Summary
You hear about acquisition entrepreneurs buying companies like yours and you can’t quite picture who shows up. Where the money comes from. Who runs the business afterward. What they actually look at when they value what you built. Bakari Akil grew up poor, had a thousand dollars to his name, watched a YouTube video on leveraged buyouts, and snuck into Tim Bovard’s class at Columbia to learn the rest. He now owns NYP Corp (a $30M burlap bag manufacturer doing $5M of EBITDA), a similar-sized edtech business, and teaches entrepreneurship through acquisition at Cornell. We got into how he built deal flow from scratch, why he targeted business services with sticky customers, where the SBA loan ceiling stops working and you have to step up to one institutional partner, and the valuation rules of thumb he uses every day. The line that landed for me: when a buyer offers you a wild number, by the time diligence ends, the price is right back to what everybody else offered.
Watch on YouTube
## Top 10 Takeaways- The LBO doesn’t ask about your pedigree. It asks one question: can you pay the price and service the debt?
- The acquisition entrepreneur comes in to learn, not to change. Day one through day thirty, you watch and listen.
- Deal flow is the lifeblood. If a week passes without a seller conversation, your pipeline is empty.
- Geographic focus is liberating. You don’t need a national search to find a company you can actually run.
- Sticky customers beat recurring contracts. Look at three years of repeat purchases, not the contract on file.
- The SBA loan tops out at $5M. Above that, herding ten investors gets brutal and pushes you to one partner.
- A single institutional partner costs you control. It also closes the deal and gives you a track record.
- $200K of Normalized EBITDA trades at 2-3x. $1M trades at 4-5x. Past $3M, you’ll see 5-7x.
- Net income hides the truth. Taxes move, interest disappears, amortization drops. Normalized EBITDA is what you negotiate.
- When the wild offer arrives, watch diligence. By close, the price is back to what everyone else offered.
Sound Bites
“I just needed to find a good business and a good growing industry that didn’t have major threats to it, that I could purchase for a good price.” (@TBD) — Bakari Akil
“If I go an entire week when I don’t talk to somebody who’s looking at a company, that’s a very unusual and very unnerving feeling for me, because that means that there’s nothing in the pipeline.” (@TBD) — Bakari Akil
“Never forget those who don’t make money never become philanthropists.” (@TBD) — Bakari Akil
“There are two numbers: normalized EBITDA, your annual cashflow, and the multiple, how many years of cashflow. That’s it.” (@TBD) — Ryan Tansom
About This Episode
Bakari Akil is the founder of Graves Capital, an acquisition firm based in New York. He grew up poor, built his first network through the Alternative Investments Club of New York (a 5,000-member group he founded that met every Tuesday at Jay-Z’s 40/40 club for years), and has closed two eight-figure acquisitions: NYP Corp, a burlap bag manufacturer doing roughly $30M of revenue and $5M of EBITDA with 80 employees, and an educational technology business of similar size. He now teaches entrepreneurship through acquisition to MBA candidates at Cornell’s Johnson School of Business. This episode sits in the iBD canon as a buyer’s-side counterpart to the seller-side conversations Ryan runs with owner-operators thinking about who eventually shows up at their table.
Resources Mentioned
- Graves Capital — Bakari’s firm. — graveslawcap.com
- Bakari Akil on LinkedIn — Direct contact.
- Bakari email — bakari [at] graveslawcap.com
- Alternative Investments Club of New York — The 5,000-member investor/entrepreneur group Bakari founded.
- Search Fund Accelerator (Tim Bovard) — The Columbia course that introduced Bakari to the LBO playbook.
- Buy Then Build by Walker Deibel — Referenced as the canonical text for acquisition entrepreneurs.
- King of Capital — Referenced as a foundational read on private equity and LBOs.
- Conscious Capitalism — Ryan referenced the book’s argument that you don’t have to choose between making money and making impact.
- Live Oak Bank / John Thwing — Referenced for the recent SBA loan rule changes that opened up creative deal structures.
- Remote Year — The 12-month traveling-while-working program Bakari is on.
- Nomad Noir — Bakari’s YouTube series documenting the year.
Connections
Phase + Module:
- Module 1 — Ownership Goals — Bakari’s clarity of goal (escape poverty, then build a hold-co) drove every deal decision
- Module 2 — Expand Knowledge — The buyer’s playbook every owner-operator should understand before getting offered a number
- Module 4 — Sustainable Financials — Where normalized EBITDA gets defined and defended
Milestones:
- Milestone 3 — Net Worth & Valuation Targets — The destination number that determines whether any offer is worth taking
- Milestone 5 — Market Value — Multiples of EBITDA by size band, the conversation Bakari and I had on rules of thumb
- Milestone 6 — Transaction Value — Where the wild offer becomes the diligence reduction
Concepts referenced:
- Normalized EBITDA — The number you actually negotiate, not net income
- The Multiple & WACC — Why $200K of EBITDA trades at 2-3x and $3M+ trades at 5-7x
- Enterprise Value vs. Equity Value — Cash-free, debt-free is why Bakari ignores interest and amortization
- Three Lenses of Value — The seller’s lens, the buyer’s lens, and what the market actually pays
- The Owner-Operator Trap™ — The reason the burlap bag owner’s kids won’t take over and the company comes to market