Ajo Angels Weekly Pulse

I've been talking about angel investing for a while, and I'm not stopping. But after I broke down the five pillars of private markets a couple of weeks ago, a few of y'all hit me up asking about private equity. So let's get into it.

What is it?

Private equity is when investors buy an existing business, make it better, and sell it for more than they paid. That's it. They're not funding somebody's idea or baby business like in angel investing/VC. They're buying companies that already have customers and revenue, then going in and fixing what's broken, cutting what's wasteful, and growing and optimizing what's working. A few years later they sell it or take it public.

Think about it like buying a house that has good bones but looks rough. You go in, renovate it, and sell it for more. Same concept, just with businesses instead of houses.

Why should you care?

Because this is how a lot of generational wealth gets built and the industry is very influential in this country. Many of the businesses you interact with every day are owned by private equity firms and you'd never even know it. Pension funds, university endowments, insurance companies and wealthy families have been putting money into private equity for decades. The returns tend to be smaller but a bit more predictable than angel investing because you're working with businesses that already have something going, not startups trying to figure it out.

The dirty lil secret is that the folks managing these funds have been eating very well off of this for a long time. And the reason most people don't know about it is the same reason most people don't know about angel investing. It wasn't designed for us to know about it.

You've seen PE in action and didn't even know it

Take Red Lobster; in 2024 they filed for bankruptcy and closed almost 100 locations. Most people thought they were done, but the PE firm Fortress Investment Group saw an opportunity, acquired the company, and brought in a 35 year old Black CEO named Damola Adamolekun to turn it around. Damola came out of the PE world. He started at Goldman Sachs as an analyst, then moved to Paulson & Co. where he made partner in the firm. So he understood how to look at businesses, find what's broken, and figure out what they could become. That PE lens and experience is what made him the perfect guy to step into a CEO role and fix things. He did it first at P.F. Chang's taking them back to profitability and a billion in annual revenue. At Red Lobster he cut the bloated menu and costs and reinvested in the guest experience. Now the brand is thriving again. That's private equity in action. Buy a struggling business, bring in the right people, fix what's broken, and create value.

Here’s another example, remember when Burger King merged with Tim Hortons and became Restaurant Brands International? That was 3G Capital, a private equity firm. They bought Burger King when it was struggling, fixed the inefficiencies, restructured operations, and turned it into a much more profitable business. Then they merged it with Tim Hortons to create an even bigger company. The people who invested in that PE fund made serious money off a brand we associate with Whoppers.

Traditionally, private equity was locked behind million dollar investment minimums. You had to be ultra wealthy or connected just to get a seat at the table. And for the most part, that's still true for the big name funds.

Now there are platforms like Fundrise, Moonfare, and others that claim to open up PE access with lower entry points. I'm not gonna tell you they're all trash, but I will say this. I'm very skeptical of platforms that sell you "access" without caring about how the actual investments perform. A lot of them are just collecting fees and giving you exposure to funds that may or may not be any good. They market access like it's the hard part when the hard part is making sure your money is going somewhere that can produce real returns. I've talked about this problem before and my feelings haven't changed.

The better path in my opinion is to connect with people who are in the PE world or have direct access to that world and learn from them directly. Join investment communities where people are sharing real knowledge and real deal flow. Find funds or groups led by people with actual track records who care about investor outcomes. That kind of access takes more effort but it leads to better results.

What's the risk?

Of course PE isn't risk free. Your money is usually locked up from 5 to 10 years so you can't just pull it out when you feel like it. The fund managers are the ones making the decisions on which companies to buy and how to fix them, so you're trusting their judgment. And not every deal works out. Sometimes the business doesn't improve, the market shifts, or the debt they used to buy the company becomes a problem. But since PE is working with businesses that already have revenue and customers, the floor tends to be higher even when things don't go as planned.

How does it connect to what we're doing?

Angel investing/VC is still my thing. I started there because that's the door that opened for me, and I believe deeply in what early stage tech company ownership can do for our community. But as I've gone deeper into the private markets, I've realized that understanding how all of these pillars work makes you a better investor no matter which one you focus on. It gives you a fuller picture of how real money moves and where value and therefore wealth gets created.

Private equity is one of those pillars. And now you know it.

BluCore Minerals extracts lithium from wastewater instead of mining it from the ground. It helps the U.S. reduce its reliance on foreign lithium and turns waste brine into valuable battery materials. It is like a plug-in system for desalination plants that transforms waste into energy minerals.

Summary: BluCore uses patented technology to pull lithium directly from wastewater and brine. This helps create a domestic supply of lithium for batteries while reducing environmental waste. The system is designed to be cleaner, cheaper, and easier to scale than traditional mining.

The Backstory: The U.S. only produces about 1 percent of the lithium it needs, according to the deck. At the same time, desalination plants and water districts produce salty wastewater that contains valuable minerals. Instead of letting those minerals go to waste, BluCore built a patented system to recover lithium from that brine. The goal is to strengthen U.S. clean energy supply chains and reduce dependence on foreign sources.

Key Innovation: BluCore’s patented process extracts lithium directly from wastewater with over 90 percent selectivity. It works even when lithium levels are low and does not require heavy pretreatment. The system plugs into existing desalination infrastructure, making it more scalable and less expensive than traditional mining. It can also extract other minerals like sodium and magnesium, creating multiple revenue streams.

Funding: Raising $1M for testing and IP support as well as to support prototype installations and public launch

Black founders receive less than 1% of US venture capital, yet when funded, their startups often reach profitability faster and generate stronger revenue efficiency than the industry average?

Cheers,

Abdul

Hey Hey… I’m Abdul I’m the chairman of Ajo Angels and Shujaa Capital and I’m on a mission to introduce angel investing to 25,000 black folks over the next five years. I’m doing this with the goal of narrowing the racial wealth gap as well as trying to close the billion dollar funding gap for black founders.

This information is for educational purposes only and should not be construed as financial advice. Angel investing involves substantial risk, including the risk of total loss. Consult with a qualified financial advisor and attorney before making investment decisions.