From Corporate Development to Buying and Operating an SMB with Bakari Akil

In this engaging episode of Private Market Insights, Bakari Akil, the founder of Graves Hall Capital, shares his fascinating and insightful perspectives on SMB acquisitions. Bakari’s extensive experience in corporate development and private equity has been instrumental in his successful transition to buying and operating an SMB. His journey is a great example of how discipline and flexibility can pave the way to success.

For those looking to forge a career in search, we believe that Bakari’s practical advice is invaluable. You’ll find key takeaways from our discussion summarized in this article, but to get the full picture of Bakari’s drive, focus, and deal-making prowess, we encourage you to watch the entire conversation:

Bakari’s Entrance into the SMB World

Bakari does not have a traditional “search” background. He did not complete an undergraduate degree, has not worked in investment banking, and did not take a job at a top-flight consulting firm after a top-10 business school experience. Instead, Bakari came across search online, and decided to teach himself everything he could about the industry. These were the days before Searchfunder or a robust SMB Twitter community. A resident of Harlem, Bakari found classes on private equity and M&A at nearby Columbia University and “audited” them, sitting in the back and taking copious notes, despite not being enrolled. This approach set Bakari up for success, when it came to both acquiring foundational knowledge about the search space and honing his ability to hustle and network for the best possible opportunities.

However, this doesn’t mean his road to success was smooth. He faced multiple challenges at the beginning of his career, lacking contacts, access to capital, and basic resources to start his business, like a website. He describes his early days in the industry as starting from “absolute zero.” Given a lack of established tools and resources available outside closed business school networks, he had to develop many processes from scratch, learning how to  compose letters of intent and building a playbook of negotiation tactics on his own, through trial and error. 

When all other traditional doors seemed closed, Bakari found that the “hustle door” was open. With no network to leverage, he worked relentlessly until people had to take notice of him. In a field he perceived as characterized by elitism, Bakari initially tried to project prestige, using the Harvard Club as a meeting place, thinking this would impress potential business partners. However, he soon realized that these external trappings were less important than he had thought. He realized that hard work and a direct approach were the true keys to gaining attention and respect in the industry. 

These beginnings led him to adopt and maintain a transparent method, particularly regarding the financial aspects of transactions. On his website, Bakari openly discusses his plans for funding acquisitions. This transparency in discussing the mechanics of deals, including funding sources like SBA loans and investor contributions, helped him build trust with brokers and investment bankers. They, in turn, were more willing to introduce him to sellers, recognizing the credibility and reliability that Bakari brought to the table. 

The Additive ROI Approach to Acquisition

Bakari’s approach to SMB acquisitions was honed through an experience in corporate development. When he initially struggled to close deals, Bakari realized that he needed more experience and took a corporate development role at a company that was rolling up ecommerce companies. He highlights a critical strategy: assessing the additive ROI of each acquisition, an approach that ensures each purchase contributes positively to the bottom line of the overall organization. This is an important consideration for holding companies and roll-up strategies.

Bakari compares his experiences in corporate development with small business acquisitions. In corporate settings, his focus was less on raising capital for each transaction (this responsibility lay with the leadership team), and more on how each acquisition would fit into the overall business strategy. Bakari selected acquisitions based on their alignment with specific business verticals and their potential to enhance the firm’s e-commerce strategy – for instance, the acquisition of an air kayak company fit perfectly into the sports vertical they were building.

This translated into his career as an individual searcher. When it comes to strategy, Bakari focuses on companies that align with his personal acquisition criteria, seeking businesses that not only fit specific verticals but also have certain characteristics that make them a strategic fit for his overall portfolio.

Strategic Criteria for Effective SMB Acquisition

Bakari advocates for a disciplined, aggressive filtering process while remaining opportunistic and flexible. His specific criteria for acquisitions focus on three main aspects: ownership, revenue, and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

1. Total ownership 

Bakari avoids startups seeking venture capital or partial stake purchases, focusing instead on the total enterprise value. Typically, he seeks to change the top leadership of the company, taking on the CEO role himself or appointing someone suitable.

2. Revenue size of approx. 10 million dollars 

While he might consider slightly smaller or larger businesses, he avoids very small companies, such as those with $700,000 in revenue, and excessively large ones. A business with at least 10 million in revenue likely has a sustainable customer market fit, experienced employees, and established systems. These factors also help him in keeping things under control if there are plans to change top leadership.

3. EBITDA of a minimum of one million dollars

This is a financial threshold Bakari regards as a “hard firewall,” as it ensures the financial viability and potential of the business. He pays extra-attention to financials, adjusting the presented EBITDA to account for potential overestimations. In fact, to ensure his threshold is met, he prefers businesses with an EBITDA in the range of 2 to 3 million dollars.

Aside from these criteria, Bakari lists preferred industries on his website, but the top three criteria are his primary focus. He is open to different business models, ideally those in the B2B sector with recurring revenue and contract-based business.

“You should be ashamed if you go more than a month without a letter of intent going out of your inbox sent to an owner. You should not be calling yourself a searcher if you’re not actually putting in that level of activity.”

Find a Deal, and Investors Will Follow

Bakari reveals a key strategy for those looking to acquire a business: the importance of finding a deal before seeking investors. Building and maintaining an active deal pipeline is essential, regardless of one’s current access to capital, because a well-structured transaction will almost assuredly attract the necessary capital.

The value a buyer brings to potential investors lies in the effort and expertise of building a pipeline, identifying a viable company, negotiating a deal, and then presenting it. Bakari is convinced that having a deal at hand makes conversations with potential investors more substantive and productive.

Bakari criticizes searchers who don’t actively make offers, emphasizing that the key to buying a company is to put out offers regularly, even if most are rejected. He warns against getting lost in the minutiae of financial details to the point of inaction. Instead, Bakari advises using the initial information provided to make an offer and enter due diligence, rather than waiting too long and missing opportunities.

Addressing the structuring of letters of intent (LOIs), Bakari advises against reducing the quality or thoroughness of the offers in the quest to increase the frequency of submissions. He believes that each business should be offered a price that reflects its true worth, warning that lowballing offers in the interest of speed could in fact prolong the process. He recommends offering a fair valuation based on a business’s EBITDA, which can vary depending on the specific business and owner expectations.

On Diversity and Visibility

The interview touched upon the evolving landscape of diversity within the ETA space. Bakari notes the increasing visibility and success of Black searchers, the growth of support networks, and the availability of new tools that aid in the acquisition process. Bakari highlights the distinction between traditional search funds and self-funded search models, which have opened the field to a more diverse range of individuals. The availability of resources and education in the current landscape is significantly better than when he started, making the field more accessible, but he once again cautions against getting too absorbed in information gathering and emphasizes the importance of acting towards acquiring a business.

Bakari insists that to buy a company, one must actively attempt doing it, advocating for a more hands-on approach, and pointing out the diminishing returns of excessive education and networking. He stopped attending conferences as an attendee around 2017-2018, choosing to participate only when invited as a speaker, reasoning that once an individual possesses sufficient knowledge, the focus should shift from learning to doing.

Insights on The Future of ETA and on Starting Early

Bakari believes that the field of ETA will continue to evolve, as there will be more sharing of best practices and more people will gain better information about company acquisitions. This might lead to fewer business failures post-acquisition and a more streamlined process for buying companies. However, he doesn’t foresee a saturation point where buying companies becomes commonplace due to the inherent complexity and difficulty of the process. 

When reflecting on his personal journey, Bakari encourages people who are curious about search to get started, no matter how young or old they may be. Age isn’t a barrier to acquiring a business: Bakari helped younger brother buy a Subway franchise at 19. Banks were willing to loan his brother, given the clear revenue history and the simplicity of the business model, which shows that many people who are interested in search should get started looking at deals, even those who are quite young. The skillsets built from actively participating in an acquisitions process are invaluable for people thinking about making a career out of M&A.


Bakari’s story can serve as a motivator for people considering search – no matter your level of education, wealth, or personal story, business ownership can be a fit for enterprising people of all backgrounds. Assess your strengths, your goals, and identify where you may be able to make a difference running a business!

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