Episode 110 - Family Business with Farida and Ramia El Agamy - ENHANCED
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Corey Kupfer: [00:00:00] Romeo Mario, El Agami Khan. is part of a second generation of her family business and fulfills the roles of CEO of Orbis Terra Media, editor in chief of Thoroughbred Magazine, and host of the podcast, The Family Business Voice and Women in Family Business. She is dedicated to bringing the power of content and technology to individuals and business to unlock their growth.
And along with her today, we are blessed to have her sister. So we have two guests on the podcast today, a sister, Farida, Aghavi, who is a lawyer, entrepreneur and governance expert currently in, the general manager is currently the general manager of the Tharoat Family Business Forum. The private network and knowledge hub for family owned companies in the Middle East and North Africa.
Both of their full bios are going to be in the show notes. Definitely check them out. Super impressive. And I'm excited to have, Ramia and Farida on the DealQuest podcast. Welcome.
Farida El Agamy: Thanks, Corey. Thanks for having us. Hi, Corey. Thank you so much for having us.
Corey Kupfer: Yes, [00:01:00] it's fantastic to have you both. We were, talking in the pre show all of the things that you're involved in and, you know, and content creation and family businesses and the fact that at least Rami and I are getting into Clubhouse and all these, you know, a combination of things.
And, you know, and we'll talk about some of that and not all of that on the podcast yet. But before we get into. And also, how, the types of deals that you get involved in and I've seen, I want to take you both back to when you were growing up as a, as little girls and you may be eight, 10, 12 years old.
What did you want to be? Because, when most of my guests, I say, because I doubt it is whatever they're doing now, because it almost never is. Or in your case, you know, it is a family business. So I'm sort of wondering. Whether you did think you were going to be doing something along the lines, that you are now or whether it was something totally different when you were little kids.
Ramia El Agamy: I'm totally going to take my cue from my, my, my big sister Corrie because I'm really worried about saying something wrong. So Farida is going to go first on this one. And then I'm going to take my [00:02:00] censorship cue from her. And that's because that's how family businesses work. See, that's why I wanted her on the show so she couldn't, Hierarchy is everything.
Hierarchy is everything. Like, you know, you have to respect the authority matrix here. So, Frida, what did you want to be when you were growing up?
Farida El Agamy: What a good question. I haven't thought about that for a very long time. I think for me, very early on, I was very interested in kind of societal questions. So I was a very nerdy, nerdy eight year old.
And My father, so our father, actually, I do. Thank you for sharing. Yeah. Yeah. Our father, actually, has a very interesting career. But one of the things that he studied was archaeology, and I've always wanted to be an archaeologist, and he used to take us on hikes to Where we would go to old digging sites and kind of, you know, see if there was something left or some shards from a Roman digging, that, that archaeologists would have left behind.
So, that kind of really inspired me. And of course, being half Egyptian, you know, our travels. To go see [00:03:00] family in Cairo would also take us to some of these amazing cultural heritage sites, where then our dad would explain to us, you know, how to look at such an ancient site and understand how society would be working would have worked 5000 3000 years ago.
So for me, it was definitely archaeology. And I think at some point, I also was very interested in politics very early on as well. And then I still haven't very politically, I'm a highly political person. But so yeah, I think those would be the two ideas that would come to mind for me.
Corey Kupfer: Great.
Ramia El Agamy: And Ramia? Actually, you sound so like you're an eight year old who had it super difficult. I probably had it more together than today. So I think that was true that I wish to go back to that level of clarity. I should love it. So, no, I mean, seriously, though, I think that I'm probably the, so we're three sisters, right?
In the family business, to be clear, we just couldn't squeeze in another guest on your podcast. We felt that would be a bit much, the three of [00:04:00] us, like it's kind of overwhelming. So there's only two. But we're three sisters and I think of the three of us, I probably was the one who kind of always imagined working with dad somehow.
I think it was because I used to miss him a lot when he used to travel a lot when we were kids. And I just always imagined that if I could just carry one of those suitcases, even if it were empty and put a big calculator inside, I could go with him. And I think it was like for me. Later on, I realized that probably was like sort of the entrepreneurial gene that was there from the start.
I think it was never meant to do anything else, but to build businesses and sort of like be an entrepreneur and just, I love it so much, but yeah, so I think like just that idea of like kind of working with dad or going on these travels with dad was for me, was a very predominant motivation. And, yeah, I think, I mean, we opened several businesses as kids as well.
So my younger sister and I were very active eight year olds, like we were, we had like travel agencies, there was a [00:05:00] detective agency. It was a very busy childhood, Corey, like, you know, there was a lot of productivity going on, even that we could have actually known that this was going to turn into a family business in the end, like all of that productivity.
So yeah, so this first segment should tell people a lot about our characters. I think the sister has it together and then the other one is like, no idea. Cool. Next question, Corey. I love it.
Corey Kupfer: No I love it. And just to give people some context, because, you know, you mentioned That you're, have Egyptian, I know the other half is Dutch, right?
And then, and now you currently split tie between the UAE and Switzerland. So get people like, a little geographic grounding in where you grew up and your background and where you are now and that kind of stuff.
Farida El Agamy: Well, you pretty much said it all. So our father is Egyptian, from Cairo and our mother is from close to Amsterdam in the Netherlands.
They met in France, and then they, went to live in Switzerland. So we were [00:06:00] actually, all three of us were born and brought up in Switzerland, and not in one of the fancy places like Zurich or Geneva, but really in proper rural Switzerland. And so Switzerland is really kind of our home. This is where we grew up.
We belong to a certain extent, but then, of course, when you have these international roots, you know, the world is your oyster to a certain extent. So we all three studied in the UK. At some point during our studies. And yeah, then in 2008, we started living partially in the UAE and started building two of our companies there, between there and Switzerland.
And then, of course, Ramiya got married, and her husband is from Pakistan. So that, we needed to add, we needed to add some Asian, influence. Yeah, there's
Ramia El Agamy: not enough diversity. Corey, we just decided that my future children, we want to confuse them so much. It's going to be fun watching them having massive identity crises.
I think this was just the goal for our own [00:07:00] entertainment. For our own entertainment. Convince the future children.
Corey Kupfer: I got it. So they should be planning the therapy budget now, right? Exactly.
Farida El Agamy: That's the trust fund that we established.
Ramia El Agamy: This is why we build Welfare. In anticipation of this issue. I love it.
Citizens of the world, in short, yes. Citizens of the world.
Corey Kupfer: The other question I often ask, opening the podcast and, you know, you can take it in whatever, what do you would like, I don't know if it was together or separate, but what would be the first deal of any type, whether it was something small when you were a kid or something you think about as an adult that, that comes to mind that you, that you did?
Farida El Agamy: That's an interesting question. I think for me, it probably would be when I was in, in the law firm. So, I did my bar exam in Switzerland and practiced law in Switzerland for a while. And, I think, you know, Switzerland is an interesting country, Corey. We are in a funny way. We are very entrepreneurial.
I mean, we have a very strong middle [00:08:00] class. Many of those people are either self employed or, you know, have their own businesses. So it's a very much, an SME focused, country. But would I say it's a deal friendly country? Probably less than the U S. So in terms of, you know, the way I would imagine that the word deal provoke something in a listener from the U.
S. It's going to be very different for someone in Switzerland. So growing up, our father was a very traditional entrepreneur, you know, building his own business, you know, in a quite a conservative industry as well. So there were no deals, I would say, per se, in our, close family environment.
So for me, the first exposure would be when would have been when I started helping clients, in, in several areas, but one of them would actually, funnily enough, was a family business, here in the capital, that was trying actually to get out of a deal. So that was my first experience with [00:09:00] the deal.
Yeah. So they had, it was a family business. They were third generation. Very interesting. One of the uncles had kind of set up a deal with a Russian company and then the, his nephew kind of came in at the, literally at 5 to 12 saw the details of the deal and had to do anything he could to stop this because it clearly was a very bad deal.
So that's when we as lawyers got involved and, you know, try to support his narrative, in terms of trying to warn the uncle that this was going to go really, really south.
Ramia El Agamy: I've never actually thought of that before, you know, then you, so, Corey, just so you know, just so you, your pity for me, like, reaches its climax, like, both my sisters are attorneys.
Okay. Like, just so you know, I'm in the middle and it's really, it's a scary, scary place to be. And, no, but like, actually, I've never thought of it that way until you mentioned that. But it's so interesting because for you guys, like, deals are actually always associated with business, isn't it? Because it's like from deals, there's so much business.
Oh, yeah, [00:10:00] of course. Right. Like, I never even realized the connection is true. Of course. It's so, yeah, that's massive. Because you almost always at some point, you need legal support to a certain extent. Right. So most probably. Yeah. Yeah. Interesting.
Corey Kupfer: Love it. Yeah. it. Anything come to mind for you, Rami?
Ramia El Agamy: Ooh, I think I've informally been making deals on my side. You know, I think when you're an entrepreneur, like I think it's kind of part of the, it's part of the package, isn't it? Like, you know, because you start with nothing. So everything is a barter and negotiation and reaching agreements and making deals.
And initially those deals, it's really interesting. I feel like in the beginning of a company, when you start building a company, usually End up bartering and making deals based on skills exchange. And then they sort of like, you know, they grow in size and significance when there is the monetization side of it that comes into it.
So I think like, honestly, like the moment, I think, I guess, like you can say that the moment you decide to build a business or decide to run a business, you make a deal with yourself that it's part of your day to day really. [00:11:00] And I would say like, It's been interesting for us because our work, allows us.
So I've interviewed hundreds of family businesses. Like we, we, Frida is a GM of a, of probably like the largest network of family businesses in the Middle East today. And, we get so much exchange and so many discussions with other family firms. And I feel like it's so interesting to see how the family business as a construct is actually, you know, it's a constant negotiation internally and externally, right?
And family businesses are known to be super embedded into their regional context. Like you know, they're usually people who carry large, like really, really strong reputations, are very attractive, are magnetic almost for deal makers to find, like people always want to make deals with family businesses because they're very attractive deal counterparts because usually they're, you know.
They're stable. They think long term. Like, you know, there's that sense of, Oh, the family's involved, like, you know, there's skin in the game. So I think that, you know, we actually informally talk about this all the time, Darcy, like, okay, you've got a deal pushed your [00:12:00] way. What do you think? Should we share the risk?
Should we go in together and stuff like that? So amongst family businesses, I think this is a fairly frequent discussion, actually, if you think about it. Yeah.
Corey Kupfer: Yeah. Yeah. No question about it. And listen, I look at the family business itself as a deal because business partnerships Right? Yeah. And, you know, multi owner companies, whether they're family or not, there's a deal that needs to be made amongst owners, right?
Even within a company. So, that's a fundamental deal. I want to hit on just a couple of what, I look at as, you know, at least in my experiences as sort of myths of family business. So we can get, you know, if anybody is sitting there with some things in their heads, I want to clear them a little bit.
And then I want to get, more specifically into. And to some of the conversations of deals as they relate to, family businesses and otherwise. So first of all, you have used the word entrepreneur in terms of yourself, an entrepreneur within a family businesses, but some people who don't know it, well, they question that, I, the many, many years was a.
Member of entrepreneurs organization, president of New York chapter. [00:13:00] I take it a couple of years off, but I'm probably going to come back and you know, it's an international organization with chapters all over the world. And one of the differences that we see is most of the members in the U S are first generation entrepreneurs or if their parents were entrepreneurs, they're not in the family business there.
You know, whereas in, for example, the Middle East in a lot of, of Asia, Southeast Asia, Asia, even a lot of Latin South America. You know, a lot of actually other parts of the world, many of the members are second, third generation family businesses. And there was always this question about, Oh, are they entrepreneurs?
Right. Because, you know, and I happen to know many of them and know that. In my mind, they are definitely entrepreneurs, because it's not like they're in Medicare. I mean, sometimes they are, but in most cases, I don't see them just coming in to a well established business and being a manager and just operating that business as it existed, as it existed, you know, when, when they're married.
Let the true accounts thing begin. Right, so, yeah so you want to [00:14:00] speak to that? Because, you know, because I think That's a myth that, sort of second or third generation family folks, are not entrepreneurs. You know, but you tell me, your experience, obviously, you know, you swim in this world, you know, every day.
Ramia El Agamy: I don't know. I don't. Maybe we should make that distinction. I think there's a real technical distinction between talking about a family business, family enterprise and an enterprising family. I mean, I think for both Farid and I, it is inextricably linked where you talk about entrepreneurship and family business.
I mean. Entrepreneurship is not only the origin of any family business, but it's also usually the force that propels it forward. Like, you know, every generation, there's a saying that like every generation should treat its family business however well established as a startup. And basically really, like question everything like, you know, rejuvenate, etc.
And like put that energy in. Not that every generation needs a founder, but there's something to be said about that. In our particular case, I think we really qualify as what you'd call sort of an enterprising family, because we've gone beyond sort of like just [00:15:00] working in one business, right? Like, we're not just like that one business that has our name above the door, that one factory.
But we've gone into several different companies, building several different companies, all within the family ownership. It's all governed by the same family. I think. But that's why we're absolutely never afraid to use the word entrepreneurship because we understand that any endeavor starts with that impulse of the entrepreneur.
Now, the beauty of, I think, being part of an enterprising family as opposed to really being solo is that there's the heritage, in the sense like, oh, there's the history and you learn from the history of the past of the previous generations. And you have the, honestly, you just have like the, the moral and emotional support of the family around you and you have the rest of the family involved, right?
Like, what did you say? I
Farida El Agamy: mean, let me go out on a limb here. I would even say that family business is an extreme version of entrepreneurship. It's like the extreme sport of entrepreneurship to a certain extent. And I'll explain why. On the one hand, you [00:16:00] have extreme advantages, obviously, right?
You might have already infrastructure set up, you might have, resources at your disposal, you might have already a very strong goodwill with your stakeholders, and strong legacy that you can, you know, build on going forward. But then you also have the downsides. Right. That legacy can weigh enormously.
It can be like one of my friends, a third generation family business member, one said, sometimes I feel like I inherited a backpack full of stones and I'm trying to, drag that around with me, being very aware that I cannot get rid of one of the stones because they're all part of my legacy. And then you have.
The reality of, for example, you know, people always referring to the, to your predecessor as the one person that made it and the one person that was, yeah, exactly the ghosts around the table. There's a huge field in family business [00:17:00] that talks about, you know, what legacy does to a person taking over an existing business.
And yet that the, both the positives and the negatives taking, taken into account. You are an entrepreneur because what you're essentially doing, you have to look at your resources and you have to apply, you know, risk behavior in order to achieve growth. And I think ultimately the behavior is exactly the same.
It just comes with a very different context. And that's why sometimes I do say that it's the bunny jumping of entrepreneurship, because it is a bit more extreme, even though entrepreneurship by itself as a normal concept is already difficult enough, but it adds a dimension that is emotional, that is, unexpected and, talking about deals, Corey, every single morning you enter your family business.
It's a emotional negotiation with your family members, however good, however strong your relationship with each other. You are [00:18:00] constantly negotiating. You are constantly adjusting behavior. You are constantly, trying to figure out how to, marry the aspect of you having, bonds that go beyond the workplace, but also having to display professional behavior and having the opportunity to, for example, a big topic here is accountability.
How can I tell my sister that I adored that? You know how we've been through so much together. How can I tell her? That, you know, she's accountable for something and point to her that perhaps she has not performed. This
Ramia El Agamy: is not, I'm not to tell me something. Are you trying to say something? Wink, wink. Cory, can this wait until tomorrow's briefing, please?
Well, there you go. Pointing case, Corinne. Pointing case. Is it
Corey Kupfer: hypothetical or are we having it in the bag?
Ramia El Agamy: Yeah, like this is, she's like passive, passive, aggressively pointing fingers. You know, like I, I will bring this up in the family council tomorrow just so you know. So, [00:19:00] but I think it's such an interesting point you're raising.
I do think like it's like the, you know, how people say like, you know, when you want to be successful in business, you have to leave your ego at the door and bring family business. That's true. Plus you have to leave your childhood precon. Mm-hmm. Preconceptions at the door as well, because there's a lot actually that you have to leave the door.
The door frame is like full of stuff that you have to leave there. And I think that's, and that require, and that's a deal with yourself basically, that you have to reach. But also because the role, I mean, I'd love to hear also Cory, like, for me, like one of the big topics, . That I like to connect with anything we think about is ego.
And I think in deal making, that's also such a big thing, isn't it? And it's also a really big thing in a family business. And I always feel like ego plays such a big role in both these areas and how successful we can be. Right? If that element is sort of in check and has its right place, then both these things become much more successful.
Corey Kupfer: Yeah. In fact, you know, it's interesting. I talk a lot about ego in my authentic negotiating book and on how it's one of the [00:20:00] top five reasons that negotiations fail is, you know, is when ego gets involved, you know? So, I definitely, believe that and it's interesting because Everything you talked about, you know, and you mentioned something, you talk about family counseling, I mean, so number one, the stakes are so much higher in family business, right?
Because it's not just. If the business falls apart or the business partnership falls apart or there's tension, it's not, it doesn't just affect the business, but it's hard not to have it come into the personal and the family relationship. Right. And then, you know, so it makes it even more important.
So I know a subject that, that we discussed very briefly in the brand interview. But, and you especially, I think, try to spend a lot of time in which is governance. Right. Right. Right. I mean, governance is important in any company, but certainly in family businesses, I think it's even more important.
Right?
Farida El Agamy: Oh, absolutely. I mean, if we look at, I always try to break governance down into it's kind of what I see as it's three constituting parts, you know, which is your vision, where, what do you want to achieve? The roles that you have to assign to the people in your [00:21:00] group or team or family in order to achieve that goal, and then accountability.
So how do we make sure we measure performance? Now, if you break governance down to these three principles, and you apply this to everything that you do, it becomes very quickly apparent that in family firms, the layers of governance are, Much more complex. And the complexity comes because of the family element.
You know, you have to, I always give the non family audiences at the example. Yeah, just a little kind of exercise to do. I say, You know, if you imagine the most difficult professional situation you've ever been in, in your life, take a moment to imagine that. Then imagine your, the most difficult family relationship you have in your life at the moment.
And then you put those two together. Every single day of your professional life. So that's family business. And that's what makes it so extreme. That is what makes it so difficult because the emotional toll that [00:22:00] certain family situations can take on you, is much more than you would expect.
And I have to say that governance, that's why governance and family firms is essential but so difficult. Everybody can do corporate governance. Everybody it's, you know, it's almost it's science it's policy, it's regulated to a certain extent. There's legal implications that you can just follow.
And you know, it's something that is pretty set in stone. When you look at your ownership, ownership also has like a couple of legal, you know, implications and you can kind of follow some guidelines there, with of course, a little bit of freedom. To arrange as you wish. But what is absolutely never organized is the family governance side.
There are no laws that prescribe to you how to, whether you should have a family council or not. You know, pretty much every corporate law will tell you that you need a board of directors in your company, or that you are obliged to have a shareholder's meeting once a year. Nobody tells a family firm that they need a council to [00:23:00] discuss family matters.
So if you leave that to too late. In your family's history, and you need to then play catch up, sometimes it actually is too hard for the family to get used to regulating their behavior as a family. So this is where I think governance has a lot of complexity, but it makes it fascinating, but it is very, very complex.
Ramia El Agamy: That impacts hugely, right? Like on the ability to make decisions or to actually make deals outwardly. Oh, absolutely. If you cannot come to that agreement internally, it will defer everything. Like, that misalignment internally will defer from your, like, it will defer your growth. It will defer your ability to seize opportunities.
We've seen this last year with COVID. You know, strived that, you know, Have their decision making in mind and that have found some, or that, you know, in, in your words, Corey, that have struck some sort of a deal internally, if you will, on how this is going to go down and that has eased their negotiation with like the [00:24:00] uncertainty that they've been faced with, last year, which we really can categorize as force majeure that has impacted Absolutely.
Everybody. And so I think that this is why I love it when you talk about the governance side of things, because I think it's this principle of having your house in order, even at the most basic level and the family businesses, we like to also like do a lot by handshake and by just like, you know, it's implied and stuff like that.
But when it comes, the push comes to shove and especially when the family is actually seeking out bigger opportunities, when you're after bigger deals, when you want to like, you know, when you really are ambitious about your growth goals. You cannot try that, you cannot do that without facing the internal situation first, right, like you cannot do that without having your house in order, or at least you can't do it sustainably, it's eventually going to crumple, I mean, we've seen examples that actually became really big, you're right, but then eventually crumbled because the house wasn't in order internally.
So I think it's super important to connect it with the governance theme actually. Yeah.
Corey Kupfer: Yes. And let me talk about what could [00:25:00] theoretically be, you know, an ultimate deal for a family business. And I will say I did, listen to a little part of your, episode with our, Romeo with our common friend Dov Baran on his podcast.
We spoke about this a little bit. I, and I so agree with you, you know, this misperception, you know, or this judgment that people have, when, you know, the family businesses don't make it through the third generation. You know, and there are some statistics about that, you know, no, no question.
There's some math on that, some stats on that. But, as, as, you know, as you pointed out on Dove show, you know, that can happen to so many reasons, right? So that's family business. They'll quote unquote survive because maybe they sold, right. Or maybe and the big point you made, which I love was that how many businesses last that long, even so fall apart if the three generations like they've accomplished so much more than anybody else.
Well, but I do want to talk about sort of that decision and, you know, I have a theory on this that, you know, some people say, oh, you know, you get further away from the founder and, or you have, generations that are entitled and that's why these businesses [00:26:00] fail. And listen, sometimes obviously you see examples of that, you know, or it is some situations, but I also think part of it is just math.
In my mind, meaning that most people have more than one child. So every generation you go down, it becomes exponential in the number of people, at least in, you know, who have beneficial ownership, you know, interest in the company. And frankly, it just gets more complex, and it's tougher for a company or a family business to support, you know, when it had to support the founder and their family, it's one thing.
And then when it went to the next generation, which might be two or three kids and then their families. Now we've gotten exponentially, you go to the next generation, you could be supporting, you know, 16, you know, families, and it just gets harder and harder for a business to support that, especially if it hasn't been entrepreneurial with the next generations in expanding it.
So ultimately, you know, often there's a, it comes to a point at some point, in the family businesses. Whether it makes sense or whether you can [00:27:00] maintain it. And sometimes there's differences of points of view, whether you should sell outside, or maybe just bring in outside management and keep it, you know, family owned and all are in part.
Can you talk a little bit about, cause you deal with, you know, you, personal family, business experience, but you also have interviewed and deal with hundreds of clients. Family businesses. What is your experience been in, so the evaluation of that ultimate potential deal on whether you keep the business and the family or whether you sell it or bring in outside capital or even just outside manage?
Farida El Agamy: I think it's a very interesting point you make here and it definitely is part of, I would almost say a little bit the bad rap that family businesses get, specifically young family business members, right? So when I say I work with family businesses and I speak to people who have nothing to do with family businesses, they right away imagine, you know, the 25 year old with a Maserati, you know, cruising through London like that's kind of the image that people come up with right now.
I'm not saying that those don't exist, and I'm not saying that [00:28:00] that is not something that, you know, is part of a reality. I mean, I don't have statistics, but I would say the large majority of next generation members. Even from, leading large corporations, actually take are very aware of the responsibility that they have.
They are extremely, extremely aware that it's, as I said before, the, you know, the backpack full of stones. And however glamorous their life might look from the outside, there is a very clear responsibility that comes their way. Now, one thing that we always talk about in our association, which I think You know, in, in Europe it's done a bit better, but not very much in the, in, in, in the Middle East is the difference between, succession planning for the management, for executives, for the entrepreneur, right?
The person who has the entrepreneurial acumen. Which also in a, in my opinion is quite a matter of luck, whether each generation has that one or two or three or four [00:29:00] people who have that acumen that can, have the skill set to, to guide this family business forward. So the difference between the success, the successor in the executive role versus the successors on the ownership role.
And I think there is a lot of work that needs to be done to. To clarify for people that you might not necessarily be an entrepreneur by nature, and that is okay, even if you are born into an entrepreneurial family. I mean, nobody can, basically blame you for not being entrepreneurial.
That is not something you can influence. There's nature versus nurture. There's this whole study of where does entrepreneurial behavior start, but I think you cannot blame an individual for perhaps not having the inclination to be an entrepreneur. But what you can do is explain to that person that, you know, you have been given this responsibility.
You probably have benefited from being part of a family that has a well run or a, you know, successful business. Now, as a family, we are going to do everything we can to shape [00:30:00] you into a responsible good owner. And that doesn't have to be a full time job, but it will always mean that as long as you want to benefit from this organization, you will have to give a certain input, a certain type of input.
That input needs to have a quality. And what we are trying to advocate is that we make a very big distinction between ownership succession and executive succession or management succession. Yes. And, you know, if we do that properly, there are roles for everybody. I am of the opinion that you can educate pretty much anyone to become a good owner because it is a role that can, that has beautiful facets.
It has a role. It's a role that can be extremely creative. It's a role that can be supportive, that can be, you know, even inspiring and you can even, if you have. Entrepreneurial inclinations, you can even, you know, use those, but there has to be a very big distinction, specifically the moment you shift from the first to the second generation, because [00:31:00] typically this is where, and I always try to, to explain to people who are in the succession moment, specifically from the single entrepreneur to their next generation, to the second generation.
You have to imagine that one person has fulfilled, Between five to 10 different roles for this organization to thrive. They are the salesperson, they are the creative person, they are the people person, they are the leader, the visionary. It is very unlikely that you will have someone who can take over those 10 roles in embodied in one person, right?
That is very unlikely. So as a founder, you need to be aware that there will be not one person who can probably take it over so that you have to establish to governance a system whereby those some of those aspects that you have taken over or that you have naturally, you know, created for yourself being taken over by a system and then the next generation can come in with their own unique skill set.
Which is, which, you know, they [00:32:00] inherently have, and then start using those to create a new value for the company. So this is a little bit how I see that, that challenge that you described.
Corey Kupfer: Yeah. Yeah. Thank you. I think that's great insight.
Corey Kupfer: I want to shift us, to another area of deals that we see with families. And that is, you know, I, as I've mentioned, to you and as my audience knows, I, you know, I have this, sort of niche where I do a lot of work with, people in financial services, wealth management, And that includes family offices, you know, which, becoming more prevalent here in the U.
S. and certainly prevalent, around the world. And in those family offices, sometimes what, those offices are doing is investing, in other people's companies, right? Not just in the family, business. And sometimes the general, the multi generational wealth, you know, [00:33:00] gets managed through those family offices.
And of course, they invest in various ways. But one of the ways is, you know, is doing deals. And I know you all have some, exposure and experience with that. So, talk to us about what you're seeing there.
Farida El Agamy: Mm hmm. Should I take it? So, I think what's interesting in the family office field, first of all I try to always clarify that for us in Europe and then the Middle East I wouldn't exclude the UK a little bit because I think the UK and the U.
S. have had quite similar developments when it came to family offices. Mm hmm. But, you know, the family office concept is very Anglo Saxon, and I think it arrived a little bit later to continental Europe and is actually just arriving, I would say, over the past, has been arriving over the past 10, you know, decades, probably, in the Middle East.
So it's interesting for us, you know, from an academic perspective to observe how that model of a, Private wealth management, a structure is now starting to be implemented around the world. And it has kind of quite [00:34:00] different it starts looking very different. And I like that because I think, you know, the early family offices outside of the U.
S. really tried to replicate the typical U. S. model, which is, you know, first generation entrepreneur. Exponential growth, exit probably still within the first generation, perhaps at the latest second generation, and then the management of those assets, long term. Now in Europe and in the Middle East it's kind of different.
We are still very much in the, you know, operational family business field. So owners are still very much operational. Now, what we see, however, is that there definitely is this tendency that Operating owners, whilst they still are executives in their companies, are starting to establish family offices. Now, these family offices, literally, I've seen everything from there is an extra accountant sitting in the accountant's pool, and he's kind of the family office, all the way to a super sophisticated professional setup.
So we see kind of [00:35:00] an evolution of that structure. And I think what I find very, very interesting is that, of course, those individuals. Family offices are starting to display similar behaviors with regards to, investment strategies. They have their portfolios set up. They have their, asset allocation, nicely balanced.
Very often, if I look at the Middle East, for example, with its volatility, geographical diversification is really, really important. So there's all these topics. But what I see now is that in, in the next generation, in the younger generation of these still operational family businesses, so we still haven't exited those.
We're still managing factories and, you know, trading businesses. But we are now seeing a generation that says, hang on a second, I'm going to take my dividends and I'm going to actually set up a little investment office of my own. And I think the attraction of, or the, you know, the, I would call it attraction of VC specifically of VC investing has done a lot for those next generations to look at.[00:36:00]
Investment as on the one hand, an opportunity to kind of realize their own, you know, vision of where the world is going and the companies they would like to be involved with. But now we also see a sort of corporate VC behavior where family businesses are starting to realize our innovation pace is too slow.
So how I'm going to innovate is through, investment, direct investments in startups. So these are two developments that are fairly recent.
Ramia El Agamy: And I think what's really interesting about the recent or more recent emergence basically of the single family office, let's be very clear, of the single family office in like, you know, Middle East, Southeast Asia, Asia, and we just did a special collection on family offices in a barrel magazine, that was published last week and we combined, like it was interesting, we did interviews with people from the U.
S., Europe, Iraq and, and India. And so it was really interesting to see everyone's take on this. And one of the most interesting interviews we did was actually with Jay Bhupani from India, who explained also [00:37:00] about the mindset shift from a family business or an enterprising family towards like decision making in the family office, right?
Like, so what you have to learn that distinction between when you are making business operational decisions. And when you are making wealth management decisions, right? So, such a big shift. Such a, anyway, he, and he was very, it was a lovely entry. I really recommend everyone read it because, you know, He's being so candid about like, the, how, you know, as an entrepreneur, you come in with those expectations.
You're used to just like getting on with things and just doing these things and like, and then wealth management is such a different activity. And I think, and the types of deals that are open to you via the family office are very different than the types of deals that are open to you via an operating business.
Of course, I think there's a huge cultural shift. And I actually think that this is also one of those situations where. I actually do not necessarily think that the family [00:38:00] member who is the best executive for the operating business necessarily would make the best family office. Absolutely. No, of course.
I really think that those are, yeah, those are two very distinct sets of, yeah, yeah, yeah. So I feel like, and I always feel like that's kind of like, it's interesting. Creating a family office, interestingly, also like really opens up a whole, as you said, involving the next generation. It opens up a whole host of new potential roles for family members, which I think is amazing, right?
Like, because, family offices are also known to be like, usually a lot of families first foray into structured philanthropy, which a lot of next gens are super, excited about, right? Like, and they would never operate in whatever business is still operating, basically would never be interested in that industry, but they love what they can do by the family office.
And just to, to your point before as well, Corey, I just wanted to mention that because We all know I went on a rant on, Dov's podcast, actually two, like he's just mentioning one. He's being nice about it. So, and Dov lets [00:39:00] me rant, which is why I love him so much. So, so basically, so I went on this rant about the, like, you know, the longevity discussion as well.
And I think this, it's actually interesting because for me, it links very much with the family office, right? Like, so, It's just the fact that a lot of people have this misconception that the longer a family business exists and is established, that somehow they automatically become stronger, things should be coming easier.
But as Frida explained, you have to understand how many factors change on average around the business, just in the scope of 10 years, that's not even half a generation. Yes. That's why so many businesses fail after 10 years, right? Like most of them fail after, well, gosh, most of them don't even make it out of the startup phase.
Let alone. Last like 60, 70 years. I think the reason why family businesses got to get a bad rap actually for that, like get judged more for like, you know, failing and then the next gen gets failed. It gets sort of like, blamed and that whole entitlement discussion, whether true or not comes forth is actually because the outside world really loves the family [00:40:00] business and actually the outside world sort of society really.
Loves family wealth and family businesses because it inspires them. There's a sense of stability. But there's like lots of family drama. We also love family drama, but I've had a novella aspect of there's, you know, it is so much drama. I mean, our family is like a, so you walk into a soap opera every day.
Like it's fantastic. We should sell the rights to it. That's fantastic. But I think, you know, like, I just think it's very, like, I'm very, very passionate about this because you cannot romanticize this, right? Like this is business. We also don't walk around constantly thinking of ourselves as family offices or family businesses.
We're entrepreneurs. We're wealth managers. We are what we are. We do our work. But I think, and I think what's important to understand is, especially in this current context, I feel like I'm a big advocate of telling every family that we encounter and they tell us as well, look, especially in these circumstances that we're facing right now, like, you know, where a lot of things will change and have changed absolutely [00:41:00] forever.
You should feel comfortable to make the choices that you need to make without feeling that this is failure or without feeling that this is like, you know, you letting previous generations down because that's nonsense. Every generation needs to make the best possible decisions within the context that is divination.
You know what I mean? Like, and I think that's a super important message to send out there because this nostalgia ultimately leads to the family being ruined entirely, even though maybe. As you know, Cory Proby, making a better, like there could be a better deal out there than waiting for total ruin because you couldn't make, you know, you couldn't figure it out basically.
So that's what I'm very passionate about putting out there.
Corey Kupfer: No question. And listen, think about, I mean, there's a few things that I parallel, that you said, Romia, that, you know, you look at non family businesses, right? First of all, people judge family businesses, but look at some of the top companies and whether you want to talk about it The you know in the S& P index public companies, whatever I mean many of them weren't around 25 years ago forget [00:42:00] three generations ago, right?
And you know people moving out, so Even at that level, non public companies, finance companies, whatever, I mean, you look at, you know, whatever, Apple, Google, Microsoft, Tesla, whatever. These are, I mean, and the corresponding companies that, you know, whether it's, you know, who knows, U.
S. Steel or whatever it is, you know, who moved out. So, it's interesting. You don't hear that kind of judgment, you know, for those kinds of companies. That's number one. And then, the other thing is sort of, going back to the family office discussion, I, you know, I'm interested in this.
International perspective, because I think it's a great distinction that it is, more common, although obviously not, a hundred percent on either side, but what common in the U S for, families when they have an exit, to then take that money and create a, a family office and invest that, whereas, in a lot of other parts of the world, there's, you know, the family's still operating, how does that affect, affect what they're investing in?
Because although it's not always the case, I find. Many family offices in the U. S. End up because they have sold their business in a particular industry. [00:43:00] That's the industry they know and they will often invest in that industry or in adjacent businesses to that industry because that's where their expertise is.
But obviously if you're still running an operating company, there are times when that would make sense to invest in adjacent or whatever, but also you're not going to invest in directly. Oh, I shouldn't say that. Sometimes it makes sense, but Very often, there's at least considerations on whether you would invest in any kind of competitive company, right?
So, do you see these Stanley offices in, you know, the Middle East, in Europe, etc, UK, wherever it is? Investing, you know, looking to branch out and diversify much more or are they, investing in the areas adjacent to their core businesses or is it a mix?
Farida El Agamy: Well, it's very difficult to say. It's a very interesting question.
I'm actually quite fascinated by this question. And it's something that I feel specifically in the Middle East and even Europe, I feel we're missing a little bit of data. We're actually missing a lot of data, you know, that really starts giving us a proper, image of the investment behavior of family offices.
I'm [00:44:00] talking of obviously of single family offices, or even, you know, just the It's individuals coming from family business backgrounds that are investing their private wealth, perhaps not even, you know, instrumentalized or through a vehicle. So it's very interesting to see how, on the one hand, people seem to be extremely opportunistic.
And, really looking at. What's flying, where's the best, deal of the moment, people are networking as well. And you have to see that in the Middle East, obviously, your network has always been. You know, your, that, that was the main asset that you would have it's an, it's a society that is extremely dependent on personal relationships, trust, you know, long term trust.
Right. So we transfer relationships, across generations. So I think that's very important to, to understand, but now obviously with a fast pace, you know, Moving society that we have today, sometimes those [00:45:00] traditional behavioral patterns cannot be applied anymore. So what we see in an investment is a very opportunistic behavior.
It's, you know, I happen to know I happen to have access to a deal. I haven't happened to have access to an opportunity, and I'll just go for it because it just makes sense. mathematical sense, right? The risk is fine. The returns are fine. I, this makes sense for me. Then you have the people who are, a little bit more strategic and they indeed, you've basically mentioned it already.
On the one hand, you have people who say, I need to diversify away from my core business. I need to make sure that I don't have my private assets exposed to the same cycles as my core business. And that's why I'm going into a completely different direction. So I would say that's one way of investing.
The other way is the one that you've mentioned too, which is, I know, let's say shipping. My family has been in shipping for 80 years. [00:46:00] We lived shipping. We breathe shipping. So if I'm going to invest and I want to know that I know where I'm, you know, how successful I can be in a certain asset class.
I'm actually going to stick to anything related to shipping because that's what I know. Now I think what's going to happen is that we'll probably see with family businesses that have, that still have existing family, operating businesses, we're going to kind of see a split. We're going to see a hybrid behavior.
On the one hand, I would imagine that we will see a lot more of corporate investments, corporate VCs, that are going to come up. Whereby these operating businesses, as I said just before, are going to diversify and innovate through direct investments in innovation. Startups within their industry, but then I would say that the private on the private side on the family office side, I think that we are going to see more of a diversification, both by the way, geographical [00:47:00] and, sector wise.
So it might also be that they say, okay, I'm not going to invest in shipping, for example, in Norway, because I'm a Norwegian family business. I've always been in shipping in Norway, but actually I'm going to invest in shipping in Africa. Because it's geographically diversified. So I am going to not be exposed to the same, risk patterns.
So this is how I would kind of in short summarize the trends that I see, but I would love to see more research on this because I think this is going to be extremely important going forward and it is changing the entire, business landscape and the entire landscape of, you know, how SMEs or small businesses and startups are able to thrive or not.
So I think especially in the Middle East, the allocation of private wealth. It's actually a huge driver for economic growth if it's done in a smart way.
Corey Kupfer: Yeah. And it's interesting because obviously, you know, one of the difficulties in getting that kind of data is that, these are privately held, you know, family, there's not a lot of data on it.[00:48:00]
And, although obviously folks like you have a huge reach into this, what I find obviously is that some of these, or many of these, family offices are, you know, intentionally private, you know, in terms of what they're doing. So they, they don't want to share. There should be various reasons.
So, yeah, it's hard to, you know. Ought to get data on it, but, you know, but at least anecdotally it sounds like. Yeah, I mean, we're seeing some of the same things.
Ramia El Agamy: Mm-Hmm. . .
Corey Kupfer: So listen, you know, far to rob, Ramia, I could speak to you all for hours. ,
Ramia El Agamy: go to clubhouse Corey, let's say. Exactly, exactly.
We could do it 24 hour little bit. I didn't set 24 hour deal or room ,
Corey Kupfer: but, in terms of a podcast, all good things need to come to an end. So, in that regard, my. Second to last question is, if people want to find out more about, you, your companies, your publications, you know, all this stuff you do in family office, all the content you put out, what's the best place for them to go to find out more?
Ramia El Agamy: So, we, I mean, first of all, thanks so much for having us here. Like we, we love your platform. We love this topic as well, and we love [00:49:00] finding overlapping like ideas with the family business space. It's so interesting to challenge it every time from a different perspective. So thanks a lot for having us here.
I think the best way. To engage with us and our content is probably the, to go check out our magazine, which is on, farawad magazine. com. And we also have a very nice niche publication, which is dedicated to women. Another topic that I could rant on, Corey here, like, you know, it's called Webinar, WebinarFamilyBusiness.
org, which has a nice podcast too. We also have the, so the forum that I mentioned, so Frida's, so that Frida's, the GM office is a big network of family business in the Middle East. It can be found at tarawad. org. And so yeah, so I think those are mostly for in relation to the family business team.
Those are really our big, our big portals. We have various others, but I think it will take too long to mention, but also like, you know, just hit us up, obviously, like, you know, we're on LinkedIn, we're on all social media as well, and we love having conversations with people. So please like, just connect with us.
LinkedIn is best and that's a, that's a really good way to get in touch with us and see what, because we [00:50:00] constantly are sharing content. So I think that's a good feed to, to, to follow basically to understand more about the work that we do. Yeah.
Corey Kupfer: And we're going to have a number of those links in the show notes, folks.
So if you're driving or whatever, you didn't get that, don't worry about it. Just check out the show notes. You'll be able to, get access to the great content that, Farida and Ramya, and their, various, you know, outlets and companies are putting out. All right, so my final question of the podcast, and I'd, love each two of you to answer this, is freedom is my single highest I value and ideal in life.
And for me, that means everything from freedom, from all people around the world, from oppression, , and discrimination, and, to, the reason I'm an entrepreneur and I from my own business. And, you know, so what does freedom mean to you in your life and business? And, you know, yes. Just what does freedom mean to each of you in your lives and business?
Farida El Agamy: Oh that's, this is a final question. This you're asking me this at the end of ,
Ramia El Agamy: you, seriously, you don't know Farida at all, do you KA at school? Kari . This is the [00:51:00] beginning of a two hour need to fast under 60 seconds. That means what he says. It's the last question. Okay. So you to cut to
Corey Kupfer: the
Ramia El Agamy: shade.
Corey Kupfer: He needs to condense hours of discussion into a few sentences.
Farida El Agamy: Condense it. You can do it. You can. Okay. Okay. Let me think about this. One thing that probably comes to mind, like at the first moment is kind of the, the right or the possibility to seize opportunities. And I think that for me really represents pretty much the core of how I see freedom because What that means is it means I have tools at my disposal.
I have an environment that allows me to see opportunities. I have an environment that allows me to be part of a group or, you know, a movement that seizes that opportunity. And, I mean, again, this is a two hour conversation at least, [00:52:00] but. There's a lot of detailed chain reactions that position me as an individual in the situation to be able to take an opportunity.
And I think, you know, we can talk about education. We can talk about. discrimination, we can talk about so many different factors that would hinder a person to be in a position to seize opportunities. So I think Probably. Yeah. If I, if you force me to boil it down, then I think it's that.
Ramia El Agamy: In a similar vein, I would say, and much shorter because I'm not as eloquent as you are, in a shorter way, I would say probably similar vein, freedom to me is to receive the kind of respect that allows me to unlock my full potential without being worried that I'm, I will be punished for it or persecuted for it basically.
Probably. I think that's the ultimate freedom is the ultimate freedom lies in respect. Treating. [00:53:00]
Corey Kupfer: Love it. Love it. I so appreciate having both of you on the deal with us podcast. You've, just, the perspective you brought and, this will, although this, Conversation cannot continue on the podcast with our conversations will continue.
Absolutely.
Ramia El Agamy: Thanks so much. Thanks so much for having us. Great pleasure.
Corey Kupfer: Absolutely
