In this solo presentation, Akeel Jabbar—GP and Investment Director at Horizon Capital—explains why owning equity is the primary path to wealth for billionaires and outlines five key criteria to evaluate when buying equity in a startup. He begins by stressing that wealth comes from equity ownership rather than salaried work. He then walks through the five factors: (1) Market growth and longevity – the business should operate in a expanding, durable market rather than a fleeting fad; (2) Defensibility – the product or service must be hard to replicate, offering a strong moat; (3) Market leadership – the company should already be a leader or have a clear path to become the #1 or #2 player; (4) Management is secondary – unlike traditional VC models, the founder team can be replaced if the business fundamentals are solid; (5) Revenue growth and customer retention – consistent month‑over‑month and year‑over‑year growth, with loyal customers, signals a sustainable business. He illustrates each point with examples (e.g., travel industry post‑COVID vs. work‑from‑home related products). The video concludes by urging viewers with capital to apply these criteria, emphasizing that diversified equity stakes can eventually generate millionaire or billionaire wealth over decades. A call‑to‑action invites comments on surprising points and encourages subscription.
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What is the number one thing that you see across all of the billionaires and why they are so wealthy is because they own equity in the companies that they built. Okay? They didn't go and work out there in a job and make a bunch of money. They went out there and built a company and they own equity and their investors invested into them and they got a lot of equity and they become wealthy as well. My name is Akeel Jabbar. I am the GP and investment director at Horizon Capital. And today we're going to talk about what to look for Let's talk about 5 things, what to look for when buying equity, investing your capital in a startup business, and help you generate true wealth. Hey guys, welcome back to SaaS District. My name is Akeel Jabbar, and today we're going to talk about what to look for when buying equity, when to invest your capital in a startup business. So number one, the first thing I'm going to talk about is the market. Is the market that the business is in, is it growing? Is this company going to be around in the next 5 years? Is it going to be around the next 10 years? Is it going to be around the next 20 years? Or is it just a fad? Is it just a short-term business that, you know, it's making a lot of money in the short term, but it's going to be gone in the next future? Okay. So is it a growing market or will the demand continue to increase and will there be more buyers for their product? That's what I look for personally. If it's a flat market or it's a declining market where people are just no longer interested or over the next few years it's going to disappear, you definitely don't want to be looking into investing into that. So I'll give you a couple of examples here. Number one is say travel industry. As you guys can see here, you know, it's now September 2020 and you know, it's been hit immensely, right? The travel industry has been dropped by over 90-95%. And we don't see for the next short-term period that the confidence isn't back. For people to want to go out and travel. So though I wouldn't look at investing in a travel business in the short term, okay, maybe in the long term it might come back, but it's just so unpredictable at this point. But on the flip side, let's look at companies that are, uh, you know, a lot of, a lot of more companies now working from home. Maybe there's a lot more opportunities to invest in businesses that supply people who are working from home. So whether that's product, whether that's service, whether that's coworking spaces, or office chairs, those are all businesses where, you know, the trajectory for that market is going to continue to grow as people move towards working from home. So that's number one, is the market growing and will it continue to grow for the next 5 to 10 years? So number 2, the second thing to look for when I'm looking to invest some capital in a startup business is it doesn't matter if it's a SaaS company, if it's a productized service business, doesn't matter if it's a physical business, Is it difficult to replicate? Is it defensible? Can I come in there? Can another person come in with a little bit more money and can they outcompete you? Can they take over your business and win over all your clients? Okay, so I can take an example of a service business. Okay, that's something about service businesses is if you don't have a competitive advantage and somebody else can just come and hire a sales team, okay, let's say they just come in and hire a sales team and they can just get all the same, they can get to the level of where you are at, within a few months, then you have nothing to stand apart from your competitors. You have to be defensible. The product you're offering, the service you're offering has to be unique to you, and it's very difficult for somebody to come in and copy what you're doing. If it's easily replicable, if anybody can do it, then anybody can do it, and it's not as valuable in the market. So I look for things that are non-replicable, that have a strong moat, which is something we talk about, and have a strong competitive advantage. And can't be easily replicated because you have something that stands apart and makes you unique with your business. So number 3 is, can this business become a market leader or is it a market leader at this point? Is it the number 1 or the number 2 leading business in that market? Are they the leader in that space? Okay. Or can they be? I look at businesses that maybe they're number, not number 1, but maybe they're number 2, You can look at it from a local area or you can look at it at a national level. If there's, say you're opening a gym, you want to invest in a gym in your area, is there 10 other gyms and they're all competing for the same business or are you going to come in there and be able to capture all the market and become the number 1 or number 2 gym in the entire area? There could be another option where say you're looking to buy, open up an e-commerce store and you're selling a shirt. Or a mouse, is your mouse going to be the number one mouse that gets sold across the entire country because it's something that's so powerful and people just love your product and you'll be known as the number one person to go to for that product. Okay, so I look for either number one or number 2, or even if they're just starting off, can they be, could they have something that's so unique that they could be the number one or number 2 position in that space and market? Number 4, the 4th thing I look at, so this is counterintuitive than what a lot of VCs or venture capital firms will look at, is it's not about the manager. Okay? So if you are an angel investor, you're obviously going to go in and you're going to bet on the horse because it's just an idea. They don't have a track record and people are looking at, can this person, do they have the skills? Are they competent? Do they have the experience to know what they're talking about in that field? to actually go out and execute. So that's what you're initially looking for if you're an angel investor or a VC. But what I look for, it's actually different. And the reason why I say that is because the management can be replaced. Okay? Or even if the managers or the CEO or the founders aren't that great, the experts who are needed to take that company to the next level can be easily hired. Okay? You can hire people who are extremely competent and experts in their field as long as the company is has the other points which we talked about in this video. And so unlike the, unlike a VC model where you're betting on the horse, in this case the horse doesn't matter as much. And that's what I look at. I don't look at who the person is as much. I look at the business independently. If they're a great leader and they're doing a good job, that's even a bonus on top, but that's not a leading factor to look at when investing your money in a business. 5 and last point is the revenue growth. Okay, so one side of the equation is the market. Is the market growing? But the other thing to look at is, is the business growing? Is the market and the revenue— is the business growing month over month? There's a lot of small businesses out there that they have no idea what they're doing. They don't have the experience, they don't have the background in that field, but they've just built a great product and it's just growing like crazy month over month, year over year. And they just— they don't— they're just clueless. They just have to be in the right time. Right place in the right market and there isn't a lot of competition out there. So that's what I look for is if they're growing month over month, they're growing year over year, I don't have to worry about that because in 1 year, 2 years, 3 years, even if they're growing 10%, 15%, 30% year over year versus now where they're growing 20%, 30% year, month over month, that's fine. I will be able to get— know that I'll be getting back my return on my investment in a few years. So I look for growth. How quickly are they growing? How long are their customers sticking around for? Are they staying around? Are they happy about their products? The reviews are great. People are raving about their product. They're sharing it and they're staying around and continuously coming back to pay them more and more money. Then I know that the product has a defensible moat. It's a market leader. It's going to be growing, continues to grow for the next few months and years. And that's when I come in and say, hey, this is an awesome company. I want to invest my company in this company. Okay? So that's the 5 points I want you guys to consider. If you guys are looking to— you have some capital on hand, you have some investors on hand, and you're going out there to look to invest some of your money into buying equity, which like I said, is the number one way to build wealth. Okay? So you build wealth, you own a small percentage of a bunch of businesses. At some point they'll exit or you'll get a return on it and you'll become a millionaire or billionaire in the next 10, 20, 30 years when the company is at the level of where you want it to be. So just to summarize here, the 5 points that I talked about, what to look for when investing your capital in a startup business. You have some capital on hand or you have some investors with you who are looking to invest in some equity in different businesses. These are the 5 things you want to look for. Number 1, the market. Is the market growing? Number 2, is it defensible and is it difficult to replicate? Number 3, Are they a market leader or can they be a market leader within a short period of time? Number 4, it's not about the manager. Don't worry about the manager. We're not VC funds here. Look for the company itself. And number 5, is the revenue growing on a month-to-month basis? Okay, so that's it. If you guys liked this video, what I'd like for you guys to do is comment below which of these were surprising points for you when you guys look at investments. And if you guys like this video, make sure to subscribe and like this video, and we'll be sure to publish more videos just like this on SaaS District. Thank you.
