MasterStroke with Monica Enand & Sejal Pietrzak

Navigating Private Equity and the Art of Relationship Building with K1 Managing Partner Hasan Askari

• Hasan Askari, K1 Managing Partner • Season 1 • Episode 7

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“ She had a small business, we had a small business. We were both founders trying to create something out of nothing with dreams to take over the world.”

Dive into the world of private market investing with our special guest Hasan Askari, Managing Partner at K1 Investment Management.

In this insightful conversation, Hasan simplifies complex concepts in private equity. Discover why relationships, not just numbers, are the cornerstone of success in finance.

Host Sejal Pietrzak invites Hasan to share the inspiring story of how he and co-host Monica Enand first met, and how their initial encounter paved the way for a lasting professional relationship built on mutual respect and collaboration.

Tune in now for a masterclass in private market investing. 

Listen to the full episode here. 

#privatemarketinvesting #financepodcast #privateequity #relationshipbuilding #entrepreneurship #masterclasspodcast #K1InvestmentManagement #categoryleaders








Georgianna Moreland - Executive Producer | Managing Editor;
Matt Stoker - Editor


Hasan Askari:

Giving her a sense of the kind of partner I would be, versus just the numbers and the metrics. Like you know, I'm not, I didn't go to Harvard, I'm not a doctor. But like I will win on sheer, like brute force, desire will passion pick your favorite word. That's where I will win and that's what I wanted her to get from me. Welcome to the Masterstroke podcast with Monica Inet and Sejo Pietrzak.

Sejal Pietrzak:

If I knew we were doing K1 colors, I wouldn't have worn red, I would have worn burgundy.

Hasan Askari:

The story of that is that red's my favorite color. So when I made our first presentation and I was trying to figure out what color to use on the PowerPoint, I was like let's just go with red because I like it. Conversations with founders, ceos and visionary leaders in technology and beyond, Monica.

Sejal Pietrzak:

we are so excited today to have an amazing guest on our podcast. Hasan Askaris is here. He is one of the founders of K1, and that's a private equity firm, and we're excited to have you. Hasan, why don't you tell us a little bit about what is private equity and how did you get involved in it?

Hasan Askari:

Hasan Askaris yeah, so private equity? I guess in the most simple way, I could say it is the business of buying equity in private companies. The same way, if you are investing in public equity, you go buy stock in McDonald's or Pepsi or these large public companies in a marketplace known as the stock exchange. Private equity is basically the business of buying stock in private companies that are not traded on an exchange that the average human being would have access to. My story of private equity is actually kind of funny, and part of that included me googling what is private equity when I got my first offer.

Hasan Askari:

Ever since I was growing up, I was always interested in finance. My father had done a short stint working on public equities and the stock exchange in Pakistan. Going back to when I was a really young kid, he would actually have me go through the newspaper because that's how you would find stocks in those days and go and look at PE ratios, which is the price to earnings ratio of public stocks, and said kind of hey, if it's under this number, then that means you should buy it. If it's over this number, so you can make me circle it. At the time I thought he was actually taking my advice on buying stocks, but I think he was just trying to keep me busy now with kids. I understand that, but I always was interested in finance. I thought I wanted to do investment banking because that's what they advertised to 18-year-olds going into college.

Hasan Askari:

My second year of college I had applied to a job. It was a firm in Irvine that did private equity. At the time I remember they were going to pay me something like $10 an hour and then I had a job offer to be an intern at US Bank in Los Angeles For those of you who know US Bank's Tower in LA, it's like, I think, the tallest building here. I had heard of US Bank and they were going to pay me $15 an hour. My father said to me just look it up. I couldn't sleep one night. I say Googled, but I forget what it was. It might have been Yahoo or something else. I was like what is private equity? All I remember is the feeling of, wow, everybody goes into investment banking to go into private equity. This is my chance to skip that.

Hasan Askari:

I wasn't that good at school so I was like cool, maybe this is my Trojan horse way into the industry. This is a firm in Irvine. That was a fund to fund, so they would invest in private equity funds like K1. One of the projects they gave me was they gave me a memorandum of a private equity firm and they're like hey, can you tell us what you think of this fund?

Hasan Askari:

Again, I remember the feeling of reading that and being like wait a second, do we ever actually get to buy these businesses? Because that sounds super cool. They said no, no, no, we just invest in the guys who go buy businesses. So then at that moment I was like I'm going to make it my life's mission to get a job at a private equity firm. I was fortunate at the time, because I was still in college, that I met a few people, including Neil, who I still work with today, and they said look, we'll have you intern with us, you're 19 years old, but we're not going to pay you and do whatever we tell you to do. And I was like sign me up. That was my entry into the industry.

Monica Enand:

Well, we are so glad that that's the choice you made because it's been an amazing ride. I know, and I love your description of kind of the basic level that private equity is buying shares in private companies. But can you help us dig up we want to demystify it a little bit. So if you can help us contrast private equity maybe with venture capital or other sources of how do businesses get funding and where does private equity and maybe even K1 specifically, where does it fit in that?

Hasan Askari:

So anytime we have a new employee, we kind of take them through again the what is private equity and we kind of draw it. There's that classic kind of escrow of a company life and at the beginning there's like the venture capital. Venture capital, generally speaking, is I'm a company, I'm trying to figure out where I fit in the world. Is my product something that people will pay for? But it's a really cool, innovative, different way of solving a problem. I don't really have any income, I don't have revenue. I've got a really good idea, or maybe a little bit of revenue, and a couple people have bought it, but it hasn't really been. What I would argue is they're still trying to figure out if they've got product market fit. That's where venture capital comes in and it's like look, we're going to invest in dozens and dozens and dozens of businesses with the this is a very generic statement, but like you know, maybe of the 100 investments I make, 10 to 30 of those investments will work out and most of them will not.

Hasan Askari:

But the 10 to 30 that do, because you get into a company so early in their life, the opportunity for you to make a tremendous amount of return is obviously super high risk, super high reward. Young companies typically go to venture capitalists to help them monetize an idea. Then you go into and that's typically called people will say things like pre seed or seed or series A type of investments. That's where venture typically comes in. Then you go into growth equity. So venture and private equity are two kind of names that have been around since. You know whenever this all started probably in the 70s or 80s, if not before. Growth equity or growth capital is something I think that got more kind of well known through the mid to late 90s into the 2000s, where you kind of got into a company. You might not take a majority or you might take a bare majority. You've got more product market fit, you might have some level of profitability, but now it's really about adding fuel to the fire to drive you to getting into scale. So this is typically kind of I've gotten 510, maybe $15 million of revenue and my goal is how do I get to be much bigger and, generally speaking, I would say growth. Equity investors are still very kind of innovation, growth oriented, where I would say profitability is less of a concern for them and obviously there's exceptions to these. And things have changed over time and especially through the last couple of years. During COVID, like late stage growth, became a very popular term which people would attach to financing rounds that were just before a company went public, so super high growth kind of companies but might have been burning a lot of money. Then I would say, once a company is more established, they're starting to. You know, they might have slower growth compared to these younger companies still growing, still good businesses may have gone through a couple different rounds of financing, may have gone through stages where they've launched products and pulled them back, so much more mature businesses. They need to be at a place where they're more self sustaining. Profit becomes more important. That's why I would say the traditional private equity comes in, where now what we're looking to do is we've got our product market fit, we know our customers, they like our products, we're adding true value, we can quantify ROI and now it's about how do. We run our business in the best way possible in order to build a more sustainable business over a long period of time. So there's a there's a bigger emphasis on profitability and being able to sustain yourself. I would say one of the other differences which comes up with private equity firms is because you are now a larger business, your growth might not be where a younger business might be.

Hasan Askari:

Oftentimes, private equity firms will introduce, you know, more innovative ways of financing a company, which could include things like debt, because they need to use some element of leverage to drive the returns that they need to, without going into it in too much detail, justify the illiquidity that an investor has to kind of giving them money. So they've got to hit certain return thresholds. I would generally argue that you've got to be, you know, in the teens plus type return level, as opposed to public markets that are high single digits and oftentimes, if you're not getting that through pure growth, you'll use a little bit of leverage. So high level, I would say those are the three kind of you know. Obviously there's many different versions of those three, but I would say high level. You know those would be the three big categories on the equity side of private market investing.

Sejal Pietrzak:

Tell us the story of when you first met Monica and how K1 decided to invest in Zapproved. When was it? Well, you know, give us, give us the story of it, because we've had a number of conversations, monica and I, but I don't know if I've ever specifically asked her about when she met you and when she met K1.

Hasan Askari:

So I think you know, the interesting thing is, I think the the relationship that that Monica and I and K1 and Zapproved had, honestly, like I feel very fortunate that I was a part of that story, because we tell it. We tell it to people outside the firm, we tell it inside the firm, and inside the firm it's very much about you know, people always talk about we're in the business of people, but oftentimes people look at you and you're like Well, you're in finance, like isn't all about numbers and metrics and Excel, and it's like, no, actually that's the least important thing that we do. It's actually these relationships that I think I truly believe it's actually what makes us very different. But you know, I think Monica and I met 10 years ago and I to this day, it's become more than just a business relationship. It's very much now a personal relationship and that's why I'm so excited to be on this with you guys is like Monica and I was like, absolutely, I would do this with you.

Hasan Askari:

But so Monica and I met. Our business model is very much. We reach out to founders that aren't necessarily looking to sell their business or raise money and there are two general things that happen either we keep calling them until the day that they want to do something and they're like, okay, cool, I'm so happy you called. Or we just keep calling them and show them different ideas and maybe one of those ideas sticks and that triggers a transaction. Monica's case is more of the first one where we had been calling Monica for a long period of time and one of the folks on our team managed to catch her live on a day that she was willing to take a phone call and I was actually going to be on a trip to Portland.

Hasan Askari:

Oregon and we had had a lot of history in Portland between there's a business in Portland that we had been a part of for a long period of time that had done really well, and Monica knew the founder of that business and I had gone up to Portland for to meet a number of different companies, of which the proof was one of them and you know, at the times approved was a fairly small business. She had never raised, you know, institutional money and we should definitely talk about because, like, what Monica was able to achieve is an amazing story in of itself, way prior to us ever showing up, there was an instant connection, I think, between both of us. I don't know necessarily if it's because deep down inside we have a lot of cultural similarities. I don't know if it was because both of us had this kind of where the you know, the person that has a little bit of a chip on our shoulder and we have a point to prove. I think it was just like five or six of these different things that I was like you feel like that, I feel like that, and we never necessarily say it, but it was there. So anyways, but at the time I mean it was literally like six to nine months after we had the final close on our first one.

Hasan Askari:

So we were nobody, which maybe that was the other thing that was common is like she had a small business and we had a small business and we were both founders and, like you know, trying to create something out of nothing with these dreams of we're going to take over the world.

Hasan Askari:

So we met, we talked and we went back and forth, exchanging some information, this that the other and we ultimately issued a proposal to Monica and I was super excited. I was like I finally found like we're two peas in a pod. This is going to be the greatest partnership of all time. And then Monica says like sorry, I said I'm turning you down, let's keep excuse me, sorry. And she's she turns me down because and you know I've told this story a few times you know we had talked a lot about. You know I'm Pakistani, monica's Indian there was this, the way that she described it, and I've told this story so many times it's like Hasan, you were like the guy I fell in love with, that I wanted to marry. But this other firm they're like that doctor that shows up to town who went to like the fancy university that's got the good job and the stable income and my parents are like how do you turn that down?

Sejal Pietrzak:

And I literally said that is a great analogy.

Monica Enand:

I did, and when I told that, when I said that to Hasan, I thought I'm never going to talk to this guy ever again.

Hasan Askari:

So I'll use this you know, arranged marriage Because, like you know, the classic thing is oh well, okay, in that case, like I'm done, like I have no shot, the doctor from Harvard versus, like you know, this kid who you know we fell in love with. Like I've seen that in every Bollywood movie of all time.

Sejal Pietrzak:

I was just saying, but you know, at the end of the Bollywood movie what ends up happening.

Hasan Askari:

Bingo. So I said to Monica at the time. I said, monica, if that's truly the case, right, all I ask is I'm going to call you every Friday from here on out and, honestly, just use me as a resource. This is what I do for a living, this is not what you do for a living. I will be a resource. We'll chit, chat and look, I do feel like we've connected and I'd love to just follow what you've done. And story for another day is how my wife actually did get married and now we're married. So if this happens to me a lot, we never have it of turning me down to somebody else initially that I somehow magically convinced them to come back. But so I call Monica every Friday.

Monica Enand:

Which, at the time when you said I'm going to call you every Friday, is that OK? He asked me. He said, is it OK if I call you, maybe every Friday at the end of the work week and you can just use me as a resource? And I was like sure, and I remember hanging up thinking that dude's never going to call me again. But he did. He called me every Friday. We talked multiple Fridays.

Sejal Pietrzak:

We had great conversations you know Monica had. I mean she told us a story on a previous episode about maybe 250 meetings, as she was initially thinking about taking outside funding and so she had a lot of suitors out there. There was a lot of opportunity.

Hasan Askari:

And I'm a competitive guy and so, but it was. And look, I think one of the things I love about what we do in our business is you get to be a part of these amazing stories and you get to build things with people that oftentimes again it becomes this relationship where you get to do things that most people tell you you can't do. And I think with Zapproved and, by the way, just to finish this story I called her every Friday until there was this one phone call and I would say how's it going? And every time it was like everything's going fine, everything's going fine, no problem. And I forget. I don't remember exactly what Monica said, but she had said something and I don't know if, monica, you remember, but it was something that she said. Well, I was like here's my chance and I just like boom, sales guy. And you know.

Monica Enand:

No, I think you OK. Wait, I don't think sales guy is the right description. I actually think what. I think you just had a lot of empathy. You said your voice doesn't sound the same. I think I remember you saying your voice doesn't sound the same, is everything going OK? And you were just there, was just concern in your voice and genuine like worry for me, and I said, yeah, I don't think everything's going OK.

Sejal Pietrzak:

Yeah, and had you already taken funding from another group?

Monica Enand:

honestly, I was in negotiations with another firm. I had signed a term sheet, we were in negotiations but then actually I was starting to realize I didn't want to partner with this other firm. That was what was happening in the process. You get these term sheets Again. It's like the $15 an hour. I was really enamored with the Harvard doctor firm and I was enamored with some of the terms and when we got to the brass tacks of the negotiations things started to deteriorate and I started to think I'm not sure that this is the right firm to partner with. And when I started having those doubts I started to know it wasn't going to work out. But at that moment.

Hasan Askari:

The thing, when I say a sales guy, the thing was is that I felt it was very important for me and for Monica that if I'm going to call her every Friday, I wouldn't be the annoying person who's like do you want to change your mind? Do you want to change your mind? Do you want to change your mind? That persistent, annoying persistence. But when I felt like this is a window where I can tell her a little bit like I was very conscious of not saying that we would be better or something which, by the way, I don't know if we are or we were or whatever, but it was when I think of what I was bringing to the table was the giving her a sense of the kind of partner I would be, versus just the numbers and the metrics, Like I didn't go to.

Hasan Askari:

Harvard. I'm not a doctor, but I will win on sheer brute force. Desire will passion, pick your favorite word. That's where I will win and that's what I wanted her to get from me. We ultimately, I think, ended up getting our deal signed to set the other, and then we closed our deal on the 30th of June 2014. And it has turned out to be one of the best investments, I think, k1's ever made. But then not only is K1, I think, from by industry standard, it's one of those deals that people now talk about Because, look, it wasn't easy a lot of ups and downs, but I always felt like I could say anything I wanted to Monica, and I would like to believe that Monica felt like she could say anything to me.

Hasan Askari:

And, honestly, it's like in any relationship, in any relationship, if you feel like you don't have to be guarded, you know you're going to get the best results, because everybody knows where everybody stands, everybody know what everybody thinks, and I think that was special and the K1's approved the Hasan and Monica. I think that was super special.

Monica Enand:

Absolutely, because I think that's pretty rare, to be honest, what you're describing and I think if you talk to CEOs, founders and executives who have relationships with their boards, very few of them would say they have that level of candor. I would say one of the topics that we've talked about, st Joel, and that I think lots of executives talk about, is how to manage your board. We talk about that all the time. What's the right way to manage your board?

Monica Enand:

I worked with an executive coach on exactly how to manage my board but I never, ever thought about that when we were working together and I never thought about that with working with you and I think I always had faith that, even though it was going to get tense and there were going to be maybe some possibly raised voices at different times and frustrations and arguing that we were going to get through it.

Monica Enand:

And when we got through it, the best answer for the entity, the best answer for, is the proof and its shareholders and all of its constituents shareholders, customers, employees, the community. I knew, you knew I care, you know we had to think about all of the constituencies of Zapproved and I knew that in the end, while we were going to argue, maybe disagree and maybe even sometimes have to take a break and have another conversation because we couldn't handle it anymore. I knew that in the end it was going to be the best outcome for Zapproved and everyone associated with Zapproved. And that, that true underlying trust, I don't think it's. I don't think it's very common. Actually, sagele, I'd love to hear Do you think that's very common?

Sejal Pietrzak:

No, and it's very uncommon to also talk about potential investors as a Bollywood movie. You know, I mean right away. That means that even in the beginning stages of your relationship, as you were building that, there was something different, there was something strong that you know. It was a personal connection, that you, monica, felt that comfortable to say that, yeah right, and that means you're sort of connecting personal and business all in one, and that's and that's, pretty remarkable. So even from the beginning you had this unique situation that I think expanded probably over the next. How many years did you work together? Nine years.

Hasan Askari:

Yeah, nine years, nine years, Nine years, nine years.

Monica Enand:

Well, thanks for sharing that story, hasan. I do. I love hearing it and revisiting and reliving some of those moments, though I do think I never thought you I would ever talk to you ever again after I told you that Bollywood movie scenario.

Sejal Pietrzak:

Can you tell us a little bit about what it was like to grow up as Hasan, then? What was your childhood like? What you know, you keep saying I'm not that smart, which we disagree with completely.

Hasan Askari:

Transcripts would tell you otherwise, but Tell us a little bit about that.

Hasan Askari:

So I was born in London. My father moved to London in the 70s. Actually, he didn't know any English. His first job, if you've been to London, under Hyde Park there's a parking garage and so his first job was actually valet car parking cars in that garage, and he likes to. He told me this a long time ago. He's like he got fired because he was late to work one day and he's like I thought my life had ended. And he built a business in the textile industry because he learned that in those days you could buy a roll of cloth from one end of the street, walk it over to the other end of the street and sell it and makes money. And he's like, look, I used to walk. Then, when I had enough money to take the bus, I take the bus. And then when I had enough money to get a car, I got a car and you know when I could store it and sell more of it. Then I bought a warehouse and then, when I could do it in other countries and buy plane tickets, I did that and you know. So he built up a business like that. He had studied chemistry in Pakistan.

Hasan Askari:

My mother they had an arranged marriage, classic. My mother had come from a very complicated background. Her parents were separated and she didn't really have a home for part of her life and all that kind of stuff which influenced heavily how we were brought up. Because to my mother, like family was like, and actually to my father my father was one of nine, my mother was an old child, but for both of them for very different reasons, like family and kind of taking care of people around you is of critical, critical importance and I am very thankful that. Again, I think, for you know, south Asian culture, that is a that's basics, but it was. I think that's that that was amazing.

Hasan Askari:

So, anyways, I was born in London, I was number three boy. I have two older brothers and we're two two years apart and my mother wanted us to move. She had met some kids in the 80s in London, teenagers that when asked the question where are you from? They would say oh, we're English or we're British. And she's like wait, but you're Pakistani or Indian or Bengali or whatever it might be. And they're like no, no, no, we're British.

Hasan Askari:

And she's like I don't want my children, when asked, to say that they're English. So she's like the only way to fix that is, we're all picking up and packing up and going to Pakistan. So we moved to Pakistan. My father took a couple of years to get rid of this business, so he didn't move immediately. He moved a couple of years later and we grew up in Pakistan and then, when I was 10, so I was 10, my one of my brothers was 12, the other one's 14. One day we find out that my mom's pregnant and it was like, as you can imagine, like the greatest thing of all time for my parents that they finally got a girl and, honestly, like it was a good thing for me because my parents did this amazing job of making me feel like I raised my sister.

Hasan Askari:

And so we were like crazy close and still are. And. But I think one thing for me, going back to the point to prove type of stuff, my both of my older brothers and I tell a lot of people this story like my oldest brother was like the rock star of all rock stars. My other brother, you know, similar like one of the most popular guys in school. I used to tell people that, like every girl in my class would have a crush on my oldest brother. They'd be like, okay, we can't get him. That moved to the next brother and then, like, when they're like Okay, we can't get him either, they'd like move to a different family, like, so they would like skip over number three.

Hasan Askari:

But I had these two amazing brothers who kind of set this path for me, not only in terms of guiding me in terms of what to do, but setting a standard with this whole thing in our and I credit my parents of this is like, hey, like you can, you can. Not only can you achieve that, but like I'm sure you can, you can do better. And so we had. It was never competitive, but it was always. We supported each other in this dream of like we're gonna like get better at everything that we do.

Hasan Askari:

And yeah, I was in Pakistan for 10 years and my brother went to Brown, which is the school that I applied to, and I was convinced I was going to get in and I actually was verbally told that I did and then I got a letter saying I wasn't was devastating and at that point I just wanted to leave Pakistan and I coincidentally ended up in California. I'm so lucky that my mother made us move to Pakistan because I just feel like everything that I've learned, not only the way that I am, the way that I work I mean people have this perception of what Pakistan is, but it's such an amazing place and I learned so much, and the communities and just being grateful for I mean I live in Manhattan Beach, it's like I mean it's like the cleanest, safest place you could live, and then you contrast that with Karachi.

Sejal Pietrzak:

So, coming up on almost 13 years and as you look ahead to the next 13 years, what do you see for K1?

Hasan Askari:

One of the coolest things about the work that we do is going back to the people that we hire. Right Is, if I can have a small part to play and changing the trajectory of somebody's life. That's like the most gratifying thing ever. So I would love to see a lot of the folks that are inside of K1 today whether it's at K1 or at another firm like being these badass execs. If I hear about them or read about them in the newspaper, it's like whoa cool. Like that's what I would really love to see in 13 years is like the people that I work with today are doing more incredible things than they're doing right now. That would be awesome.

Hasan Askari:

Some of the businesses that we own, if they're inside of some large company or they're independent and continuing, they're the number one in their space To again we built something cool and unique. I mean that would be cool. But honestly I would say really, if I look back at the last 13 years and I look to the next 13 years, the businesses are great and the returns are great and all that kind of stuff. But really what is even going before K1, it's the people and what they do and how they've grown, and we've got so many, including my own families that have been built and seeing kids, and that's really fun Because those are the stories you really want to tell over time that I had a little bit to play with building people's lives.

Monica Enand:

Well, and I think the important thing that we haven't mentioned, and I think when people ask me what was the most exciting thing about your entrepreneurial journey, I always those are the things I remember, like the people who grew and did things that they never guessed they would be able to do, including myself, I never guessed. I mean, I sometimes would wake up and think is this really my life and did this really happen? And I just can't believe it. And I know that so many people on my team felt that way. And I will have to say I do have to credit the investment that K1 has made in training programs, because that deep investment in training programs really allows executives to grow and just employees who start off. You know that I had a number of employees that started. This was their first job out of school and they went through executive training programs at K1. And now our running teams and reporting to CEOs and heading up divisions and it's such an amazing thing to watch and I think that deep investment in training has really paid off.

Sejal Pietrzak:

So it's not only training for the K1 employees, it's also training for the portfolio companies' employees.

Hasan Askari:

Going back to what we started with is like we're in the business. Maybe it's not even the business we're in, I don't know what the right word is. It's all about people, and whether it's the community that you live in, it's the community you work in, just seeing people flourish. I can't think of anything else that makes you happier than seeing people around you doing cool stuff. So that's what I, 13 years from now. Everybody that you interact with at K1 is doing cool stuff. That would be amazing.

Monica Enand:

Well, that is a great thought to end on, and thank you so much, hasan, for being with us today. Hasan, would you mind joining us again so we can continue this wonderful conversation?

Hasan Askari:

Oh, of course I would love to come back. This has been so much fun.

Monica Enand:

And thank you, sagell, for co-hosting this with me, and thank you so much to our executive producer, georgiana Moreland.