The financial evaluation tool that helped Daulat become one of the fastest-growing multi-national investment firms in 2019 is pronounced motah hisab in Urdu, the native language of CEO Rick Mirza’s father. Translation? Fat math/hand math.
“My father would say to me, ‘Rick, motah hisab!’ Then, he would open his palms and begin counting. That meant, when you’re evaluating a business opportunity, you have to be able to do the initial numbers on your hand. If you can’t, it’s too complicated,” Mirza explains. “Before we do any fancy proformas, it first has to add up here, on my fingers. How many stores do we need to open or renovate, doors to knock on, or units to build for it to add up?” says Mirza.
And today, you’ll find some brightest minds in investment management gathered in a sleek, contemporary office in the heart of the East Bay, in Hayward, California where, Daulat opened its doors 2018 under Mirza’s leadership.
Last year, Daulat reached the $100 million mark. It was a wake-up call for normally private Mirza — a sign that his ultra-entrepreneurial approach was gaining momentum and acceptance. Inspired, he felt he owed it to current and future equity partners to expand the company’s horizons, to offer these opportunities to other new investors.
Daulat, a thoroughly diversified multinational investment firm
What began in 2013 with a series wireless brick and mortar stores that Mirza acquired had evolved into a multi-faceted private equity firm of more than 180 investment professionals overseeing dozens of investments. Operated as a series of seven independent divisions with Daulat at the hub, they include:
Wireless retail. With more than two-dozen branded brick-and-mortar stores throughout California, the relationship with one of the three major wireless providers in the United States has become one of Daulat’s pillars. So much so that Daulat is now looking to acquire 60 more locations throughout California, New York and New Jersey over the next two years.
Real estate development. This division focuses on raw land development for single-family and multi-family homes, as well as rental properties. The two California ventures include:
• Miramar Estates, LP, 19 lots with seven different floor plans, ranging in price from $1,099,980 to $1,493,800 in the desirable San Leandro area. Mirza expects to break ground in May.
• A 189 multi-family unit development in Hayward, CA, with anchored tenants. Purchase prices begin at $600,000, with construction scheduled for 2021.
Hospitality acquisition and management. Daulat’s investments in this sector include four flagships brands located in California & Oregon: Holiday Inn, Holiday Inn Express & Suites, OYO Hotels, and Best Western hotel. Mirza’s goal is to add more depth to this category in 2020, planning to add two more hospitality properties by the end of 2020.
Medical technology. Mirza learned about a hearing aid company whose design and technology, “solved 10-times the problems at half the cost. It blew us away, and I knew we had to add that as a vertical under Daulat,” Mirza said. This new product will bring relief to the hearing impaired, “without a prescription or having to spend thousands of dollars. Disruptive, socially-aware innovations like this are an area we’ll continue scout for.”
Quick service restaurants. Daulat’s partners have been franchisees with Jack the Box for more than 20 years. Mirza and his senior investment team quickly spotted a niche opportunity. “We realized that our value add had to go beyond our approach to staffing, training and employee morale. We recognized the need for a new nimble, leaner management structure that welcomed outsourcing and onboarding more skilled staff. Now, QSR has become a big staple for our U.S. and international investors. They’re asking for more of these opportunities because of how they perform in any economic climate.” That confidence is leading Daulat to expand from 17 QSR locations to another 45 by the end of 2020.
Real Estate Flips. Call it a hobby turned profit opportunity. While he was still in high school, Mirza dabbled in estate flips. To-date, Daulat has flipped properties in New Jersey, Ohio, the Bay Area, Texas, and Nashville, to the tune of over $60 million. “And it still feels like a hobby to me!”
Solar Energy. Mirza and his team identified solar energy as a prime funding category and went looking for an experienced partner. “We were very fortunate to connect with the executive team of Better Earth, which led to us launching their Northern California office to handle the surge in demand.”
Rick Mirza: A young entrepreneur before he knew what that meant
Despite all this success, Mirza is not a household name. But chances are, you know him. Growing up in Baltimore, MD, Mirza was THAT KID; the one who appeared on your doorstep as soon as the temperature rose above 65 degrees to ask if he and his team of eight-year-olds could mow your lawn. And when the temperature dipped below 50, find out if you wanted your leaves raked, and later, your snow shoveled. “It’s true. I was relentless,” he laughs.
“I had a landscaping company when I was eight, with four lawnmowers that I bought with my chore money.” But the young Mirza also had mature marketing instincts. “I made sure we wore t-shirts with a company logo I designed. I thought that would make us youngsters look more professional.”
His instinct to identify the problem, focus on the need, and deliver the essential differentiator has enabled him to build Daulat into a conduit for domestic and international investors wanting safe investment vehicles that earn attractive margins. “We’re looking for innovations, advantages, overlooked leverages, as well as steady, proven companies. If the opportunity passes our scrutiny, then we bring our management strengths to the investment. We’re very hands-on.”
The greater the problem, the greater the reward. A Mirza Mantra
When he was a sophomore in high school, Mirza met and persuaded a cell phone retailer to give him his least successful mall kiosk to manage. In a few days, he had overhauled the kiosk, had convinced a majority of mall employees to sign up for phones, and had boosted sales to new records. So when the boss offered him a fulltime job, he instead cut a partnership deal to launch 20 to 30 locations over a few years. “By the time I graduated high school, we had 100 locations. I was 18 years old, and already exiting a very successful business,” he said. “I have truly been blessed.”
“What I figured out later from that experience was that in business, you’re paid equal to the difficulty of the problem you are solving.” Problem-solving by pairing investors who need secure, profitable vehicles with attractive, innovative businesses looking for capital has been Mirza’s key to establishing Daulat as a global private equity firm. “By being an opportunistic, value-add funder, we play a different role than other equity firms. Fortunately, that approach works for both our investors and for our business partners. It’s a win-win.”
For more information, contact: Alan Sharavsky 610-834-5499/[email protected]