I’m a firm believer that more & more entrepreneurial ‘builders’ will evolve their operating company into a HoldCo

Scaling initial capital light successes (like a service co) & redeploying cash flow into concentrated bets leveraging existing know-how, infrastructure, & expertise

Why?

- lower barriers than ever to building asset light/capital light co's
- existing co infrastructure makes acquiring/building another co easy
- more non-dilutive funding options available
- talented operators/investors can use brand, capital, & know-how to scale meaningfully

But first… what is a HoldCo?

It’s fancy term for “holding company” which is an entity that owns/controls the assets of other different companies

Most HoldCo portfolio companies operate autonomously... with their own team, balance sheets, systems, processes etc.

Major capital allocation decisions are performed at the “TopCo” (ie, primary owners of the HoldCo)

Most HoldCo’s are C-Corps due to structural/tax advantages, but sometimes you see them operate as LLCs

Distributions to shareholders are less common, w/ free cash flow used instead for new acquisitions, spinning up new products/services, or using for existing portfolio co needs

Below are some of the most interesting business stories I came across in 2020.

P. S The list is not exhaustive.

1) PSG unbundled it's 28.1% ownership of Capitec.

2) MTN sold a minority stake in Jumia Technologies for R2.3-billion.

3) Dischem has completed the acquisition of Medicare Health for R282million

4) TFG bought 381 Jet stores from Edcon for R480m.

5) Capitec entered into a partnership with SA Home Loans to offer home loans.

6) Food Lover’s Market has started closing outlets in Zambia.

7) Sasol sold 50% of the "base chemicals division" at Lake Charles which equates to ~25% of total Lake Charles project. Sasol will still retain around ~75% of the total Lake Charles Chemical Project.

8) Sasol agreed to sell its 50% stake in Gemini for R6.2bn.

9) Tongaat Hulett sold its starch and glucose business to Barloworld for R5.26bn. The group has used R4.64bn of this to pay down debt.

10) The Competition Commission approved Nimble Fund 1’s intention to acquire Edcon Book Debts.

11) Greg Maloka has decided to resign from Kaya.

12) Ethos Private Equity has won a contract with Ninety One to take on an advisory contract for Ninety One's Africa Private Equity funds.

Ninety One will maintain control and oversight of the portfolio, while Ethos will manage the assets

13) Bidvest Wits sold to TTM

🇺🇸#TreasonAgainstAmerica 1/12

🇺🇸#TreasonAgainstAmerica 2/12

🇺🇸#TreasonAgainstAmerica 3/12

🇺🇸#TreasonAgainstAmerica 4/12

🇺🇸#TreasonAgainstAmerica 5/12

A small thread to explain the tax implications of dividend of Rs.974 per share declared by #majesco Ltd which is winding up its business🧵👇

1. For starters, Majesco is declaring such huge dividend on account of it selling its US business. But, as an investor, should one think of buying the shares now? Let us find out.

2. The current market price per share of Majesco is Rs.980. This is almost at par with the dividend per share. Now, if you buy shares of Majesco, you will be entitled to dividend of Rs.974 per share.

3. Please keep in mind that dividend income is not exempt in the hands of the shareholders. It will be taxed as per regular slabs.

4. Say you are in highest slab of 30%, you will be taxed at that rate. To simplify you will be getting a net amount of Rs.681 per share (Rs.974- 30% tax).

The story of WOW! Momo

"Started from the bottom now we're here"
How WOW! Momo went from borrowing Rs. 30K, to being valued at over Rs. 860 crore

1/

Year 2008, classmates Sagar Daryani and Binod Kumar Homagai had just finished their graduation, and Sagar realized that he was too fragile in math to be able to clear CAT.

2/

But he knew that he's always been passionate about brands. He had Nike, Puma’s stickers/logos in his notebook (that's literally me!)

3/

Sagar and Binod originally got the idea of WOW! Momo after completion of 3rd year of graduation as they were waiting for their results at the age of 21.

They got the idea of WOW! Momo by observing the lady who used to sell tasty momos in front of their college

4/

Sagar and Binod used to research all night together. In the night Binod would make Momo and Sagar Daryani would make toss bread etc.

So I’m looking at Exodus Cry’s business partners & you can really tell who benefits from this definition of “freedom”.
One is called Cedar & Twine.

Basically a bunch of white women moved to Nicaragua, did missionary work, targeted poor Nicaraguan women to manufacture their stuff

We know this business model.

You create a business in a poor country & target people from poor neighborhoods. You pay them like $100/mo, $1/day, pennies/hr. You create a retail store in the US & pay them more.
You get a tax write off from the percentage that goes to charity

It is disturbing that businesses can just donate to anti-trafficking/anti-slavery organizations and claim that they’re ending slavery as a marketing tool.

They found a way to make ending slavery profitable and a way to avoid taxes.... for themselves.

Do you ever notice that all these anti-trafficking/slavery orgs never talk about workers having their wages stolen or being forced to take wages that keep them in poverty forever?

We have to ask the question of who these organizations really serve?

Another business partner of Exodus Cry is Matchless.

Which...I soon as I entered the site I saw a rant on Hooters Girls. They explain that we weren’t really “choosing” to do this, that “it was all we knew”, & only some women willingly “live in sexual sin”

LEGACY AUTOMAKERS - 2020 NOVEMBER YTD

As we approach the close of the year, how do the legacy automakers see themselves in 2020 ?

Total global industry volume is down -16% so far, and the two largest players reflect that same reality

Renault is down -22%

Nissan is down nearly -30%

And Mitsubishi is down nearly -39%

Which has brought this unstable alliance down by -28.1% overall

Of course, these numbers only reflect the way the industry likes to present itself to you

And many things about them are not quite as robust as they would have you believe

Let’s touch upon a few :

1. A lot of the volume that VW likes to report does not actually belong to them

2. Instead it belongs to Chinese companies that they only have partial ownership stakes in

3. So when VW actually files its own financial statements, a large part of this volume does not get included

4. On this particular scorecard they are reporting production and not sales

5. This is important for investors to understand because you only earn profits on sales and not on production

6. Any reports of sales numbers from legacy automakers have proven to be unreliable, and are prone to “sales reporting abuses”

A thread on my experience and observations of the grocery delivery apps in India.

@Grofers @bigbasket_com @JioMart @flipkart supermart, @amazonIN and DMart Ready.

Live in Pune. So my experience is of this city. User experience may vary according to location.

1/11

1)@Grofers - good app, good delivery timelines, decent prices, limited selection, delivery free above a certain threshold is a negative, point and Grofer cash not very good. Offers on checkout not proper and visible . Limited vegetables.
2/11

Private label selection, prices decent. Overall decent experience.

With advent of others may face stiff competition. Maybe acquired or merged with someone.

3/11

2) @bigbasket_com - good app, good delivery, timelines, decent prices, decent selection, delivery free over a threshold is a negative. Overall decent. Will face stiff competition. Will be acquired by someone.
4/11

3) @JioMart - started poorly. But improving by the day. Each experience better than prev one. First delivery was 4 days, then 2 days, then 1 day. Last delivery on same day. Not intimating delivery schedule is an irritant and needs improvement.
5/11

1/20 Q. “What are the best and worst things about being a CEO?”
A. “If you don’t like working 24/7 7 days a week, this job is not for you; also, it’s a little bit of being a school teacher, meaning like, you know, I have 150 employees, the company I ran

2/20 “before @CelsiusNetwork had 1,500 employees, and every day you have issues: The kids are fighting, somebody didn’t show up to school, somebody forgot their lunch, you name it. A lot of kind of making sure that everybody is happy. Also, if you think of it like OK, you

3/20 “have a bus, but you need to fill it with people and you need to make sure that everybody gets put in the right seat on the bus. If you put the wrong person in the driver’s seat or on the brakes, or whatever, holding the door from opening, keeping the windows

4/20 “closed, disaster will happen. So a lot of it is kind of looking at the macro things that make a company successful. For example, for me with @CelsiusNetwork, we had a lot of employees who kept saying to us, ‘You’re giving too much to the community, we’re never going to

5/20 “‘break even, we’re never going to be profitable’; even CEL token, they kept saying, 'CEL token is stuck at $0.03 for a year and a half.' It was stuck at $0.03. You could have bought millions of CEL tokens for $0.03, it’s now $3.00.

16 key customer service skills.

Why you need these for your business.

// THREAD //

1. Patience

Be patient and listen.

Every customer has their own problem and needs.

Ensure you understand their perspective and be willing to help.

Take your time and provide them the best service you can.

2. Attentiveness

Pay attention to the customers issues.

Work with them and understand what they are seeking.

Take this feedback and improve your business moving forward.

This changes can move your business forward.

3. Communication

Be clear, concise, and to the point.

Communicate your point clearly to your customer.

Make sure they know you understand them and want to help.

4. Know your product

You should know your product better than the customer.

If you don't, you're not doing your job well enough.

Study it until you can sell it in your sleep, literally.

QBI deduction optimization is a great end of year planning technique For high income SMB owners.

When used correctly, optimizing has saved my clients tens and hundreds of thousands of dollars annually.

If you are already on it then good for you.

If not - thread incoming👇🏻

The QBI or Qualified Business Income deduction was a part of the TCJA from 2017.

When congress lowered the corp tax rate to 21% they decided to throw a bone to small businesses by offering a 20% deduction on qualified income.

These include Schedule C and pass through entities.

This allows anyone conducting trade or business out of a pass through entity to take a 20% deduction on their income. Great right?

However there are a few limitations including a phase out for high income earners.

The phase begins at 326k for married and 163k for single/HOH.

If your taxable income is above that threshold you are allowed to deduct the lesser of:

1. 20% of QBI
Or
2a. 1/2 W-2 wages (or)
2b. 1/4 W-2 wages + 2.5% unadjusted property basis (RE pros look here).

This means there is a wage limitation to your QBI deduction.

Simple example. Married S-Corp owner makes 300k after he pays employees - what is his deduction? 60k

Ex2. Married S-Corp owner makes 500k after he pays employees 100k total wages - what is his deduction? 50k.

The owner cannot take the 20%, but is limited to 1/2 of wages paid.

How spotify manipulates both its user as well as artists for more profit (a thread):

Spotify displays the monthly listeners of every single artist in their profile and ranks them based in it, for example justin bieber is at #2 right now with 76M monthly listeners

Lets be honest unless ur a part of stan twitter, u will think that justin bieber is the most popular artist right now, but that is where they trick you. Justin bieber is not even in top 10 most streamed artists of this year and not in top 5 most streamed artists of this month

So wats happening here? How he has 76M listeners then? Most of these listeners are passively listening to him from playlists, which means they play a playlist in general and one of those songs turn out to be a justin beiber song...

...so now though this person didnt intentionally listen to Justin bieber, he/ she is counted as a monthly listener for justin. So these monthly listeners are just a reflection of most playlisted artists right now not the most popular ones.

Delighted to be asked by @uklandestates to delve into their archive for their 30th anniversary. They now have a portfolio of 28 estates across the region, but the Team Valley was not just their first, it’s actually the oldest industrial estate in Europe

Team Valley was born because the North East didn’t rebound from worldwide recession like the South did. Although firms like Armstrongs dabbled with car-manufacture in the early 20s, the NE stuck all its eggs in the heavy industry basket: coal, ships and guns.

But demand for coal and armaments had cratered. In 1936, men even marched from Jarrow to London to highlight their desperation at mass unemployment. In Jarrow, it reached 80 per cent. In nearby Gateshead it was 57 per cent.

Such was the state of the region’s economy that in 1934 the National Government decided to site Europe’s first industrial estate in the Team Valley to create “facilities required by industrialists engaged in starting fresh enterprises” (of the type that were booming in the South)

The excellent @Englands_NE tells us that the River Team begins as a collection of streams near Tanfield in NW Durham – a name which originally meant ‘Team Field’. Team is an ancient name, meaning ‘dark river’ with the same root as the name of the Thames.