Stats
- 2-3x typical acquisition multiples for online businesses
- Significant reduction in time and overhead for website management
- High trust in WebStreet’s operator expertise
“We first got into website investing pretty early, and a big part of our acquisition strategy was investing in websites and micro-media companies to grow our own company. However, website investing requires significant time and effort, and it’s not passive at all. What WebStreet solves, in my opinion, is transforming this active investment into a passive one, allowing others to do the work for you while you take advantage of the returns. That’s the kind of investment that interests us at Alts.co and interests me as well.”
– Stefan von Imhof, CEO and Co-Founder of Alts.co
Introduction
Stefan von Imhof is the CEO and Co-Founder of Alts.co, an alternative investment community, newsletter, and series of funds. Alts.co invests in a diverse array of alternative assets, including tequila barrels, rugby teams, vinyl records, and websites. With a background that spans a variety of unconventional investments, Stefan has established a reputation for identifying unique opportunities that offer substantial returns.
“Website investing has been a significant part of our acquisition strategy. We invest in websites and micro-media companies as a way of growing our own company and our newsletter. However, the challenge with website investing is that it requires a lot of time, overhead, and active management. It’s not passive at all.”
Being in the alternative investment space and having talked to other investors, he recognized the need for a more efficient approach. That’s when Stefan turned to WebStreet, a platform that transforms the active management of online businesses into a passive investment opportunity. WebStreet’s model aligns perfectly with Alts.co’s goals, allowing them to benefit from the profitability of online businesses without intensive hands-on involvement.
WebStreet’s Background
WebStreet—formerly known as Empire Flippers Capital—is an innovative alternative investment platform designed to make online business investments accessible and profitable for accredited investors. By leveraging a co-investment model, WebStreet connects investors with experienced operators who manage the day-to-day operations of online businesses. This micro PE model transforms what has traditionally been a time-consuming and labor-intensive investment into a passive income opportunity.
WebStreet originated from Empire Flippers, one of the leading entities in the online business brokerage space. This pedigree ensures that the platform is built on a foundation of expertise and trust. The operators that WebStreet partners with are vetted and recognized for their operational excellence, which is crucial for the success of the investments.
“It’s all about who’s operating these sites. When you guys spun out of Empire Flippers, I saw a lot of names I recognized and respected. Mohit Tater is one such example. These folks are very active online and make a great name for themselves through their own sites and newsletters. Their operational honesty is palpable.”
Reasons for Investing With WebStreet
- Early Adoption of Online Business Investing: Stefan von Imhof and Alts.co were early adopters of investing in online businesses, using it as a key strategy to grow their company and expand their newsletter subscriber base. This approach, however, came with its own set of challenges: the need for active management.
- Transformation to Passive Investment: WebStreet’s platform offered a solution by transforming online business investing from an active, time-consuming endeavor into a passive investment opportunity. This was a game-changer for Stefan and his team at Alts.co.
- Trust in WebStreet’s Operations: One of the primary reasons Stefan chose to invest in WebStreet was the quality and expertise of its operators. Having recognized several of the operators from his previous experiences in the industry, Stefan felt confident in their ability to manage the investments effectively.
- Operational Honesty and Expertise: WebStreet’s commitment to operational excellence further reinforced Stefan’s trust in the platform. Knowing that the operators were highly skilled and reputable assured Stefan that his investments were in good hands.
“It’s all about the operators. If it’s any Tom, Dick, and Harry, that’s just not going to work. But with WebStreet’s vetted operators, you know you’re in good hands. Even though those folks aren’t household names, their expertise and reputation in the industry are well known.”
WebStreet’s ability to turn active investments into passive income opportunities, combined with its network of trusted and skilled operators, made it a perfect fit for Stefan von Imhof and Alts.co. This strategic alignment allowed Stefan to benefit from the profitability of online businesses without the intensive hands-on involvement, making WebStreet a compelling choice for his investment portfolio.
WebStreet’s Investment Value and Acquisition Multiples
One of the most compelling aspects of investing in online businesses through WebStreet is the attractive acquisition multiples. These businesses can often be acquired at significantly lower multiples compared to other asset classes, providing a high potential for substantial returns.
Acquisition Multiples
Stefan von Imhof highlights the remarkable value in acquiring online businesses through WebStreet, noting that the multiples are often much lower than those seen in the startup world.
“It shocks people when you talk about being able to buy a cash-flowing business at literally one and a half times revenue. Even in a high multiple scenario, it’s three and a half times and up, which is pretty unheard of with most investments. Especially in the startup world, where buying equity in startups often involves much higher multiples.”
Due Diligence and Value Enhancement
The key to capitalizing on these low multiples is thorough due diligence, a process that WebStreet excels in. By meticulously vetting potential acquisitions, WebStreet ensures that only high-quality, cash-flowing businesses are selected for investment.
“The key is to do the due diligence. After a serious round of due diligence, you can still find incredibly great deals with low multiples. There are a lot of below-average businesses out there, but with proper vetting, there are definitely still good deals to be found. And that’s what I trust WebStreet to do—find those deals and then use operational efficiencies to increase their value and cash flow.”
Operational Efficiency and Potential Exits
WebStreet’s skilled operators play a crucial role in enhancing the value of acquired businesses. By applying their expertise and operational efficiency, they can significantly increase the cash flow and overall value of these businesses, making them more attractive for potential exits at higher multiples.
“It’s almost like a too-good-to-be-true scenario. You can buy a business at one and a half or two times revenue and with proper management and operational efficiencies, potentially exit at much higher multiples, like four times and up. The fun part of this entire industry is doing that due diligence, cutting through the noise, and finding those hidden gems.”
WebStreet’s ability to acquire businesses at attractive multiples, combined with its rigorous due diligence process and operational expertise, ensures that investors like Stefan von Imhof can achieve significant returns. This strategic approach to investment makes WebStreet a valuable partner in the online business investment space, offering a compelling value proposition for investors seeking high returns with reduced active involvement.
Conclusion
Stefan von Imhof’s investment journey with WebStreet highlights the transformative potential of converting active website investments into passive income opportunities. His extensive experience in the website investing space, combined with his recognition of the operational expertise of WebStreet’s operators, provided a strong foundation for his investment decision.
“WebStreet makes website investing passive, which is tremendous. If other people can do the work for you, and you can take advantage of that, now we’re talking!”
This strategic shift allowed Stefan and Alts.co to focus on the profitability of online businesses without the significant time and overhead typically associated with managing such investments.
The attractive acquisition multiples and rigorous due diligence process employed by WebStreet further solidified Stefan’s confidence in the platform. This approach ensures that investors can achieve substantial returns while mitigating risks.
By leveraging the expertise of skilled operators, accessing attractive acquisition multiples, and transforming active investments into passive income opportunities, WebStreet provides a robust investment platform for those looking to capitalize on the profitability of online businesses.
“It’s been amazing watching you guys grow. I’m here rooting for you and cheering you on, continuing to invest in you.”