1. Capital Generation

  2. Capital Allocation

  3. Operations

Press Release#

abhiyerra&co, capital generation, capital allocation, and operations

abhiyerra&co, building, buying and investing in businesses

Albany, CA–Oct 1, 2022–abhiyerra&co launches to build, buy and invest in various asset classes using a global macro strategy. To accomplish this the company focuses on three things capital generation, capital allocation, and operations. Further, the overarching metrics that are optimized are Return on Capital, Free Cash Flow, Debt to Equity, and Tax Rate.

The family business and investments generate a excess cash that can’t be used immediately. This cash needs to be invested for both the short and long term, and generate returns. Further, when the capital is allocated the cash must be allocated at a favorable rate.

The company seeks to optimize its own businesses in the same manner that it looks in external investments. The primary focus is on equities with a goal of optimizing for ROIC, Free Cash Flow, Debt to Equity, Tax Ratios, and Acquisitions at max 5x free cash flow. The company also invests in commodities, crypto, real estate, and alternatives using automated methods based on global macro. Trades are automated to remove the emotion from the equation to lead to a higher rate of return.

“Our simple, automated investment methodology allows us to rake in lots of profitable through think and thin.”

abhiyerra&co works through an investment thesis that is applied repeatably. While doing this we remove any pieces of the equation that do not make sense for us to continue run.

[Quote by a customer of the product/service]

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What is abhiyerra&co?#

abhiyerra&co is a family business that uses capital generation, capital allocation, and operations to buy and build businesses as well as invest in the public markets based on global macro conditions. It invests cash flows for the business and its owners. All cash from the businesses moves to an Interactive Broker account. The cash is then invested to generate a return. When cash is needed it is withdrawn from the Interactive Broker account and used to grow the usiness.

What is capital generation?#

What is capital allocation?#

What is operations?#

What do we invest in?#

The investments we do are in cash, commodities, equities, crypto, real estate and alternatives. Overtime, we hope to exit real estate, alternatives, and crypto all together.

Our investment strategy has the following criteria:

  • Long Term. Invest in assets that have a fair present value that will do well in 5-10 years.

  • Debt-free. Invest using cash on hand and reduce the use of leverage. We use debt if it is beneficial to get it at a low interest rate and pay it off fast. Using debt for growth creates bad habits.

  • Poker. Play the game when the odds are in our favor and stop when they aren’t. Not every hand needs to be played.

  • 80/20. Most opportunities will be losers, only a small portion will be winners. We get better at sorting out losers.

  • Technology. Leverage technology to make decisions quickly and test hypotheses.

Ventures builds hyper-specific niche businesses. They are easy to run and operationalize. The approach is fire, aim, ready. Experiment fast, see what sticks, and iterate to a more planned approach.

  1. Write a Press Release describing the product where customer does a max of three steps to get to an outcome. Ex, the customer goes to, they enter their s3 bucket and cloudflare r3 bucket information, they pay and their files are transferred.

  2. Build a hyper low fidelity product. It should be Cloudflare Pages and just use Notion and Airtable as backends. Use Gumroad, Stripe or Shopify Buy Button. No fucks should be given for good engineering.

  3. Launch with small amount of ads targeting that niche.

  4. See if there are any takers or build an experiment and iterate this cycle.

Investments does the following:

  • Taxes. Pay taxes for the entire company so we are in compliance with the law.

  • Cash. Manage cash needs for the businesses including getting access to capital when needed.

  • Stocks. Invest in public and private equities.

  • Crypto. Minor investments in crypto to understand its evolution.

  • Build. Build new ventures.

  • Buy. Build entire businesses.

Our criteria for investments are simple:

  • They are an adjacent capability to ours, we understand the business.

  • They have a competitive moat.

  • They have amazing management teams.

  • They have a strong Return on Invested Capital and the other core metrics we track.

What companies are our models?#

  • Constellation Software

  • Vista Equity Partners

  • Berkshire Hathaway

  • Koch Industries

  • Thoma Bravo

  • Illinois Tool Works

  • Roper Industries

  • Ametek

  • Danaher

  • Dover

  • Jack Henry & Associates

  • Transdigm

  • Raytheon Technologies

  • Graham Holdings Company

What is the acquisition strategy?#

We buy SMB vertical market software and services that fall within our Operating Groups. We buy companies where the founder wants an exit, minimal to no team, and revenues are below $10k a month. Once bought, we apply System6 and execute our Playbook.

Our criteria for acquiring a company is simple. It should be a SaaS app, founder led who is looking to offload, easy to port or map to System6 and Kubernetes. The target acquisition can be easily made to run within our Playbook.

Acquisitions buys companies and incorporates it into YerraCo & System6 process.

  1. Find existing companies that are Migrate the existing codebase to opsZero infrastructure and deploy on Kubernetes.

  2. Migrate landing and marketing site to System6.

  3. Map resources within the existing codebase to System6 in some form to be monitored if not managed centrally.

  4. If it makes sense, migrate the acquired company into System6 completely and deprecate the old codebase.

How we make bets?#

  • Bull Case

  • Bear Case