Kareem Elsirafy, managing partner and founder of Modus Capital: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Kareem Elsirafy (LinkedIn), managing partner and founder of Modus Capital. Edited excerpts from our conversation:

I’m Kareem, an Egyptian American entrepreneur turned investor. I’m the managing partner and founder of Modus Capital, which is a venture platform. We invest in early stage tech companies the traditional way, but also through venture building. We essentially cobuild and cofound companies with smart and skilled entrepreneurs and subject matter experts.

My last startup was a SaaS company in New York in the health and human services industry. It started from an idea on a pitch deck raising USD 2. 2 mn in seed funding, to now being worth USD 2 bn. That journey is very exhausting. This was from 2011 to 2015, and by 2015, I got founder burnout, so I transitioned out and exited. I took a little bit of time off to see what I wanted to do, and started consulting companies in New York and in LA with a team of operators.

We were helping companies break through stagnated growth, preparing and supporting them on raising funds and their next round. Our investor network saw that we were this value creation team that was helping companies, and asked if they could invest in these companies, so we started this ad hoc investment and operationally supporting company model. We started bringing our network transactions every month, and they suggested we set up a fund. While we thought about doing that in 2017, two of the companies we were working with got acquired by quasi-governmental organizations here in the UAE. That made me look at the region.

I landed in Cairo — because I’m Egyptian, of course — and I spent all of 2018 and 2019 learning about the ecosystem in the MENA region. What I identified was there's lots of economic opportunity, and opportunity to build valuable tech companies, and there's a lot of great talent, but not a lot of people who have gone from idea to exit. So if you're a first time entrepreneur, which most of the people in the Middle East are, where can you find skilled, experienced talent that's been there and done that? That’s where we come in, and this is how the venture building model came up.

We started with a pilot in Egypt and then came to the UAE during covid and set up in Abu Dhabi and partnered with Hub71. Now, we're in Egypt, Saudi Arabia, and Abu Dhabi.

I have three main areas of focus: fundraising, strategic operations and planning, and portfolio management, which involves providing the entrepreneurs I work with strategic brainpower and decision making where support is needed.

I think the focus now in the region is on building companies whose value is substantiated. Companies were raising money with valuations based on how much they're raising, and I see that this is an issue from the VC industry, where companies were pumping up the markup on their portfolio, so they can raise a second fund and a third fund. That model doesn’t work here. We’re not in Europe or the US, where you have the most mature public markets where companies can IPO.

I think that investors are going to look at proper metrics and KPIs and invest into a business based on its business merits. I think it is also the best time for investors to find companies. Anybody who's made tons of money always made it by investing in a down cycle, and then riding the wave up — so people who are being super conservative with their funds right now, I think are making a mistake. Now is the time to put money in.

I don’t think the [investment lull] is over. I think we are teetering between the tail end of it and the beginning of the upswing, but I think we'll have definitive clarity in the next 18 months.

I usually wake up around 4 or 4:30am. We have an international team and part of our executive team and my partners are in the US, so it allows me to catch them at the end of their day and I get to catch up with them. I wake up, read the Quran for a few minutes, and then do some reading. I don’t look at my phone for the first hour I'm awake. After that, I'll go to the gym, where I usually will be talking on the phone with people in the US.

Once I’m back from the gym, that's when I start looking at my computer. From 6-7am to 9-10am, this is where I get most of my work done. People in the US are sleeping, and people in Egypt and the UAE are still sleeping, so this is the time I own. After 10am, the company owns my time. That has me talking to my executive team, putting out fires, getting on calls.

It's important for everybody, especially people who are in leadership positions, to do a cost benefit analysis, and weigh the cost of their time, money, energy, mental capacity, etc, against the benefit for this task. If you do a cost benefit analysis for every task that you have, the ones that have a very big cost and very low benefit clearly go to the bottom of the list. The ones that have very low cost and very high benefits are the ones you probably want to do first because you can bang them out and get them done.

One thing that never changes is that being at the top of an organization is very lonely. You're the good guy when it's convenient — which is seldom — and you're always the bad guy [laughs], because the ball stops with you. There's a lot of crisis management, and every day there’s a punch in the face. But every day, I have to punch back. Some days, it's easy. Some days it’s extremely challenging, because as the company grows, the problems just get bigger and everything is on a bigger scale.

During the week, I always make sure to spend at least the last two hours in the evening — or at least 30-45 minutes in the morning — with my family. But it can be in extremes — Modus is technically a startup, and I’m an entrepreneur, so this isn't a corporate job where I can go play golf three days a week. So sometimes I go super hard all week, and totally disconnect on the weekend, or go super hard two or three months and then take two or three weeks where I switch off. Work life balance depends on the status of the business, so the more the business grows and matures and gets more stability, the more I can control that balance.

When I do switch off after my workday, I usually just hang out with my wife and my daughter in front of the TV. Most of the time, it’s either Ms. Rachel or Blippi playing on TV.

I really enjoy Conversations with Loulou. I was on one and I got hooked after. Those are great to hear the perspectives and stories of other people in the ecosystem. I’m also a big World War II documentary nerd, and I read a lot of Andreessen Horowitz (aka a16z’s) blog and Jack Abraham, the founder of Atomic, which is a venture builder. My two hobbies are snowboarding and racing motorcycles.

The best piece of advice I've been given is don't trade what you want right now for what you ultimately want in the future. It was given to me by my high school football coach. He always told me not to chase the short term, and to always be forward thinking.

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