Investment Banking, Private Equity and The Importance of Value Creation with Karl Yaacoub Alex Escobar and Aziz Yousuf 46:02

Welcome to Screw The Stock Market with Alex Escobar and Aziz Yousuf, Today we are joined by Karl Yaacoub, Karl is a business author and corporate value creation advisor with a background in investment banking and private equity

He is in active investing (started in investment banking then moved to private equity), which is all about creating value in a portfolio across corporate governance, corporate strategy, and strategic finance. Let’s know more about Karl and His journey, With no further ado let’s dive in!

[00:00 – 08:17] Karl Yaacoub on How to Add Value to Your Business

Karl Yaacoub is an investment banker and value creation specialist with experience in private equity and corporate strategy.
He believes that businesses can be improved through a variety of means, including organic and inorganic growth, strategic finance, and corporate governance.
These three key enablers are common to all private equity investors, making them accessible to the average investor.

[08:17 – 16:26] 3 Enablers of Successful Publicly Listed Companies

Publicly listed companies typically follow the same approach when it comes to hiring management consulting firms, investment banks, and other advisors,
which is to look for value-creation enablers such as customer service, pricing, product strategy, and sales and marketing.
Corporate governance limits key person risk dependency, protecting a business’s assets and ecosystem.
The organic strategy focuses on enhancing how the market perceives a product or brand.
While inorganic strategy looks at ways to enter into a market and leverage an existing capability.
Strategic finance focuses on dissecting a business into hundreds of small pieces to

[16:26 – 24:50] Ways to Evaluate a Business

The income statement is linked to the cash flow statement through operating profit or net income.
Changes in the balance sheet and cash position affect the ending cash position.
Leakages can be identified through changes in the balance sheet and cash position.
Corporate governance is about having the right controls in place, such as credit card expenses being separated from personal expenses.
Changes in corporate governance can impact a business’s ability to grow and scale.

[24:50 – 32:03] Tips for Passive Real Estate Investors

The steps that buyers take in any acquisition, whether it’s a car, a business, or real estate, are the same.
You should do your due diligence on the business, including looking at the financials, legal situation, and market conditions.
You should also consider manpower and whether you will need to double wages to attract talent.
When you are considering buying a business, you should also look at the market and how it is likely to change.

[32:03 – 39:31] Passive Investing vs Active Investing: What’s the Difference?

Passive investing is difficult because it requires energy and commitment from the investor.
An active investor has control and autonomy in their investment, which makes it easier to generate profits.
The book, “The Game of Value Creation” is about using the same tactics and insights that big investment banks advise their blue chip clients on to unlock value in deals.”

[39:32 – 46:01] Closing Segment

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Tweetable Quotes:

“The second you commit money or resources and energy into anything. You have what we call skin in the game, and the second you have skin in the game into any investment, you suddenly tune into this mental and emotional frequency that is very different from being on the fence and being an outsider. You suddenly are consumed” – Karl Yaacoub

“One key element of having a sensible product strategy. Regardless of whether or not your competitors or new competitors are competing with you on product innovation, you should treat yourself as your biggest competitor, and you should always seek ways to enhance A, the quality of your product and B, the experience that your customer is getting from purchasing your product.” – Karl Yaacoub

Alex Escobar Podcaster

Alex is a Realtor and an investor that buys income producing apartment buildings and offers the opportunity for others to partner with him, sometimes for less cash than it would take to buy a single family investment property.

In addition to co-hosting the Screw The Stockmarket podcast, Aziz is an avid investor and burgeoning entrepreneur, with a deep interest in long-term financial growth opportunities. He is also a trained legal professional, and an expert international development and business advisor.