Serial entrepreneur Brad Jacobs explains the hurdle rate and historical transformation performance for his corporate acquisitions.
Insight
Jacobs believes public equity beats private equity for attracting top talent
“If you're private, you give people these phantom shares or whatever the compensation plan is, they don't really know the value of it until they sell it someday, and it may be very different than what they thought it was all along. So from a compensation point …”
Insight
Great CEOs master all 20 operational levers rather than delegating them
“You look at the great CEOs. The CEOs have created a lot of alpha, a lot of shareholder value. They've been in each one of those 20 or so things. You talk to a Dave Cody, you talk to an Ed Breen, you talk to a Larry Culp. You can talk about any of those 20 thin…”
Insight
Short stocks if the CEO cannot name their five-year price target levers
“I say, when you bring a management team in, you need to ask them, what's your stock price going to be five years from now? And what are the levers that I have to believe that's going to get you there? And if that CEO tells you, I'll get, that's a great questio…”
Insight
Jacobs targets large, fragmented, low-tech industries safe from AI disruption
“So first, I find the right industry. I find something that's large. I find something that's growing. I find something where it's fragmented. I find something where we can buy things at reasonable prices. I find things where technology is, would, could be used.…”
Disclosure
Jacobs requires a five-year lockup and backloaded vesting for executive equity
“And I give people tons of equity. But there's a catch. It could vest, but you can't sell it for five years, and most of it vests in the last two years.”
Insight
Imagining a true 'A player' quitting should induce absolute panic
“But if when I visualize that person quitting, My reaction to that is pure terror and absolute panic, and like somebody took a baseball bat and just whacked me in the stomach and then punched me in the face. I'm like, oh my god, like I'm never going to find som…”