Stats
- $60 million in revenue from initial e-commerce ventures
- $15 million exit valuation from first major portfolio
- $21 million exit valuation from direct-to-consumer agency in 2022
“Entrepreneurship is about seeing the bigger picture and harnessing opportunities where others see obstacles. My journey began with selling medical compression stockings from my dorm room, leveraging family knowledge and an untapped online market. This early venture not only introduced me to e-commerce but also set the stage for a series of successful business transformations, culminating in my role at WebStreet, where we strive to maximize the potential of digital assets through strategic acquisitions and management.”
– Derek Gaskins, founder of For Your Legs
Background
Derek Gaskins, WebStreet’s latest portfolio manager for Fund 8 and founder of For Your Legs, is one whose entry into the world of online business is as unexpected as it is innovative. Coming from a family deeply involved in the medical supplies industry, Derek found his niche in e-commerce quite by accident, a journey that started with an experiment on eBay.
His early adventures on eBay selling medical compression stockings provided him with the foundational skills and motivation to expand into more structured e-commerce online businesses.
“I got started by selling some medical compression stockings on eBay, and that took off. So then I built a website, and the first website I built was foryourlegs.com, which to this day is still one of the bread and butter websites within my portfolio.”
Track Record and Achievements
Derek’s journey in the online business pace is one marked by significant achievements and strategic exits. For instance, having started with a simple e-commerce site, he rapidly expanded his horizons, eventually managing a portfolio with revenues in excess of $60 million. Furthermore, his first major exit garnered a valuation of $15 million.
“I’m proud to say that selling medical compression and hosiery grew my portfolio to the point of doing over $60 million in revenue. I continued to build on that and exited one of my online businesses at a valuation of 15 million, which is pretty exciting.”
Following this, Derek identified a gap in the market for a direct-to-consumer (DTC) agency that went beyond traditional marketing services to include operational aspects often overlooked. In 2015, he founded a DTC agency that he later sold for $21 million in late 2022. Additionally, his accomplishments include:
- Launching, acquiring, and exiting a total of 25 businesses
- Specifically acquiring 11 DTC brands within the digital space
Throughout his career, Derek has demonstrated a knack for increasing profitability and operational efficiency. His strategic approach has led to:
- Increases in profit margins by up to 28%
- Revenue growth of over 100% in some cases
- Annual profit margin growth of over a million dollars in one of the businesses
- An astounding 786% increase in profit margins in another of his ventures
Reasons for partnering with WebStreet
Given the experience and online business acumen that Derek Gaskins possesses, why would he choose to partner with WebStreet?
- Financial Leverage: At WebStreet, operators like Derek benefit from significant financial leverage. By contributing just 5% of a fund’s value, they gain 4-5X leverage on their investment. This model not only enhances their potential returns but also minimizes the necessity for substantial upfront capital, making high-value ventures more accessible.
- Operational Support: WebStreet offers comprehensive administrative and strategic support, allowing operators to focus on scaling and optimizing their businesses. This support liberates them from the often cumbersome managerial tasks that can detract from core operational focuses, thereby enhancing efficiency and effectiveness.
- Access to Diverse Deals: Through WebStreet, Derek gains access to a wide array of investment opportunities in global markets—including emerging markets—that would otherwise be inaccessible.
- Strategic Collaboration: WebStreet’s micro-private equity model emphasizes collaboration and partnership, which has been instrumental for operators like Andrew Tjernlund and Mohit Tater in achieving growth and operational efficiencies. This collaborative environment fosters shared success and enhances strategic decision-making.
- Flexibility in Capital Deployment: Unlike traditional private equity setups that may pressure operators to quickly deploy capital, WebStreet offers flexibility that aligns with Derek’s long-term strategic interests. This approach allows him to make judicious decisions about the timing and nature of his investments, optimizing his outcomes.
- Scaling Operations: WebStreet is committed to scaling its operations and enhancing its portfolio offerings. This commitment benefits operators by providing them with additional resources and opportunities for growth, allowing them to expand their reach and impact more effectively.
- Enhanced Profitability: Finally, WebStreet’s revenue model includes a 10% carry on the profits, aligning the firm’s interests with those of both investors and operators. This incentivizes the firm to maximize profitability for all parties, creating a conducive environment for operators to thrive under WebStreet’s umbrella.
Current Role and Strategy at WebStreet
As a portfolio manager for Fund 8 at WebStreet, Derek brings a wealth of experience and a proven track record to his current role, investing in online businesses on behalf of WebStreet’s investors. He’s strategies come into play in the following ways:
A. Acquisition Criteria
Derek is particularly discerning in his selection of digital assets for the portfolio, focusing on several deal-breaker aspects that must align with his strategic vision. To him, strong differentiation in the market is of utmost importance, whether through product features, brand positioning, or intellectual property.
Doing so ensures that each investment has a distinct competitive edge in its niche.
“The deal breakers are really important… Making sure that we have strong differentiation via positioning, messaging, features, reviews, and, in an ideal scenario, intellectual property, are vital to success.”
B. Growth Strategy
Once a business is acquired, Derek’s strategy shifts towards growth and optimization. His extensive background in operational management allows him to identify and implement improvements that can significantly enhance profitability and efficiency.
“Post-acquisition, we go past the gross profit margin section of the P&L and really drill into the opposite side of the P&L and ask, ‘What are the opportunities?’ ”
C. Risk Management
Risk management is a crucial part of Derek’s strategy, especially given the volatile nature of the digital space. He is proactive in identifying potential challenges that could impact the portfolio, such as supply chain disruptions or changes in consumer behavior.
D. Team Collaboration
Of course, Derek has an excellent team that he works with, ensuring that his vision for his acquired online businesses comes to life.
“I definitely have an exceptional team in place that helps provide a different perspective on things. I call it the back office perspective.”
Conclusion
Derek Gaskins’ journey from serial entrepreneur to a pivotal portfolio manager at WebStreet encapsulates the quintessential success story that many aspiring operators and portfolio managers dream of. His ability to recognize potential in the digital market and transform insights into profitable enterprises has not only yielded significant financial gains but also paved the way for innovative business strategies within the industry.
WebStreet stands out as a beacon for those aiming to elevate their business acumen to the next level. With its strategic support, financial leverage, and access to a diversified investment pool, We offer a unique platform that enables operators to transcend traditional market limitations. Our collaborative environment and flexible capital deployment are specifically designed to nurture growth and operational excellence.
For operators and portfolio managers eyeing the horizon for substantial, sustainable growth, WebStreet represents more than just an investment firm—it is a partner that commits to your success.
Join us at WebStreet, where your potential is not just recognized but realized and expanded upon.