Solomon RC Ali is a self-made American millionaire and a passionate campaigner for minority wealth
Since 2016, he has run his own Private Equity Investments and Business Consultancy, Solomon RC Ali Corporation. but
He has twenty-three years of experience in investor relations, investment banking, corporate structure, mergers and acquisitions, and raising capital and has personally completed an astounding 140 plus mergers and acquisitions. His energy now is directed towards enabling minority wealth.
Solomon says he grew up in an average American family. His dad died while Solomon was still very young, but he remained close to his stepfather for forty-seven years.
His first entrepreneurial activity was at ten years old when he made and sold slingshots. Looking back, he thinks he was probably not allowed one, so he set about making his own from coat hangers, electrical tape, and an old pair of jeans. He expanded to selling to others, over fifteen or sixteen blocks, a vast area for a ten-year-old to cover. His reputation spread through brother to brother, cousin to cousin, and he had captured a market. Soon he had to buy fabric instead of using old jeans, and it was his first experience of finance and cash flow.
Solomon says the slingshot business helped him discover that he was an entrepreneur. But he didn’t progress straight into other enterprises. Instead, Solomon served in the military and, coming home in the ’80s, to find very little work to be had.
His parents had property rentals, and as a teenager, he had been made to work on them after team practice and hated it. But it proved useful now as Solomon started a maintenance company, cleaning carpets, repainting, and getting rentals ready for new tenants.
Solomon built the company, so he soon had others on the payroll. One Sunday, he realized he had no money to pay anyone on a Friday and says he was “freaking out.” He rang a company that owed him money to be told he needed accounts receivable. Solomon says he didn’t know what accounts receivable was. He just knew he needed money to pay his people. Eventually, the man he spoke to helped Solomon and explained the system.
Experiences like these made Solomon aware of how people starting out need advisors and mentors. Solomon’s first mentor was his mother. She saw what he was trying to do and took him to various business services meetings. At one of these, they taught The Warbucks Strategy. One main principle of this is to run more than one business and keep assets safely protected. Solomon describes it as not having the business pains come home. He heard it, but he was to learn it the hard way later on.
Solomon built up his next business, and the money started rolling in. In his late 20’s, he had a real estate portfolio and several nursing homes. Solomon says they were good at providing care in the nursing home but bad at running businesses strategically. They had a regulatory problem, and suddenly there was no cash coming in. He had a grand house, a pregnant wife, and one small child, but recalls not being able to pay a $318 utility bill and ending up in bankruptcy court.
Solomon says he knew what he should have done, but had always procrastinated and never protected his assets against risks. To build back, he went to people and offered to solve their problems. Solomon told them he would help them scale their companies, take them public, and if at the end of the year they thought he had done an excellent job, he would take payment, in the form of a quarter of a million dollars in equity in their company. Two companies took him up on it, which was the start of his recovery.
From then on, Solomon started to do things right. He built a team of advisors around him and started to make a whole lot more money than he had lost.
The Solomon RC Ali Corporation
Solomon had become super-successful and started to question why there was so little minority wealth. He realized that out of 30,800 publicly traded corporations in the US, only 13 were owned and run by minorities. He was the only black person sitting on the board of three while simultaneously holding a position within the company responsible for raising capital.
One of these was a smart home technology company, Revolutionary Concepts, which saw through ideas from concept to licensing. Another was an energy company, NDR Energy Group, which had started with a 17m turnover and had scaled to 100m.
Minority groups, Solomon explains, simply have no access to capital. In 2016, he set up his Corporation to provide consultancy services and enable access to finance and thereby the creation of minority wealth. Solomon then added his podcast, “MBA: Minority Business Access” to help others navigate finance for themselves. He says most of the work is done by his team – they just tell him when to show up.
Solomon helps clients reorganize, restructure, refinance, and turn around many troubled small-cap companies by improving their operations and market capitalization value with his consultancy. In his quest to break down barriers for minority wealth, he has arranged an incredible $250m in structured investment capital and financing, and he and his team have successfully carried out an astounding one hundred and forty mergers and acquisitions.
Making money is great, he says, but it isn’t real wealth. Real wealth comes from helping others and one way he does this is within his campaigns for minority wealth.
Solomon also has a book coming out in 2021 about his story and the deals he has done.
The Blocks to Minority Wealth:
Solomon says that Black Americans are mostly consumers, not creators, and their buying power is growing every year. Black buying power out-performed white buying power between 2000 and 2017 by 87%, so it is critical to the economy.
But this means that Blacks are creating cash flow, not Black or minority wealth. Many do not yet understand how to create wealth. Solomon explains that being wealthy is about financial behaviors, not about earnings. Many people accumulate material things believing it equals wealth and this misconception is one of the big barriers to minority wealth. In fact, wealthy people are not big consumers. And material things, as he found out, do not protect you from disasters.
Real wealth, for anyone – not just minority wealth – can be measured by the length of time you can cease working while still meeting your financial obligations. Wealth buys you that freedom alongside the means to make more wealth. With earned money, taxes go up with the amount we earn, so we never get rich.
Wealth comes from portfolios, investments in stocks, bonds, real estate, or from businesses where something is being sold for you. The difference between this and salaried earnings is that, mostly, you earn money over and over again on the same thing. Even the tax is considerably lower if handled correctly.
People also are not informed enough about borrowing money. They borrow for indulgences or depreciating assets from the wrong places at high rates. Wealthy people leverage cheap finance to invest in areas with high returns and come out on top when the interest is paid off. The lack of access to that finance is a colossal barrier to minority wealth.
Back at the first meeting where Solomon heard of the Warburg principle, they also asked if people wanted to be rich or wanted to be famous. They teach people to learn not to max out credit cards but instead build scalable businesses and know when necessary to have capital and grow a business in value strategically. People with lots of cash coming in often think everything is ok. At the Corporation, they teach that this is not the case.
COVID-19 is a contributing factor, but not the only reason companies are going out of business. Weak companies are failing. Many of those are the ones that didn’t have any access to capital to start with. They hadn’t learned that you need to be prepared for unexpected market changes. It is the same when suddenly two big customers don’t pay you, or any other reason you need more capital. Solomon’s team at Solomon RC Ali Corporation helps people “prepare for what they don’t know they need to be prepared for.”
They help minority-owned companies grow and scale with acquisitions, improve their cash flow, create exit strategies, and do so irrespective of the economy. Solomon says that these are all the sort of things that he neglected to think about when he had the real estate business and which could have created a very different outcome. He fell into that trap of assuming he was doing brilliantly because millions of dollars were coming in, but the reality was not that at all. “What you don’t know will hurt you,” he says.
Their clients should be able to take the opportunities offered by the slow down. Solomon often asks people if they invested in Facebook in the early days. You need to be in a position to spot and take advantage of those opportunities. For example, Solomon is the man behind the RING Doorbell Technology, licensed to Amazon as RING. The set-up of the deal means he owns a piece of every camera doorbell outside homes across America.
Advice for People Growing from 1-10m.
I was especially keen to ask Solomon for his wisdom and advice for people scaling between 1-10m., that tricky jump I discuss in “Scale For Success.”
He says it is about having the right management team and then standing back and letting them do what they do, and not second-guessing them. Secondly, is having really clear objectives KPI’s (key performance indicators) for everything, from the CEO’s objectives to the creditors’ expectations.
Finally, it is about working out what you do, how you do it, and who we are in our industry sector. Then, Solomon advises, pick the top five in the industry and work out what we can do which is different, what we can offer that is more, that is unique, so our giveaways are more incredible than the competition.
You might also be interested in this article on how to build money in real estate with Cody Sperber
Another resource that might interest you and help you support campaigns for minority wealth is this listing of black-owned businesses can be found here.