In this episode of the Money Seed podcast, we delve into online business investments with Blago Nestorov, Investment Manager at WebStreet. Blago offers insights into WebStreet’s unique approach to making online business investments accessible and passive for accredited investors. From e-commerce and SaaS to content sites and Kindle Direct Publishing, Blago explains how WebStreet manages a diversified portfolio of cash-flow positive online businesses, ensuring robust returns and minimal management hassle for investors.
Key Takeaways:
(0:35) WebStreet specializes in online businesses like e-commerce, SaaS, and content sites, investing in cash-flow positive assets under $1 million EBIT.
(1:40) WebStreet offers passive investment opportunities by partnering with professional entrepreneurs to manage the acquired businesses.
(3:06) Investors can passively invest in a diversified portfolio of online businesses through WebStreet’s funds, receiving quarterly distributions and reports.
(5:36) WebStreet’s funds are diversified across different types of online businesses and monetization models, managed by experienced portfolio managers.
(6:27) The due diligence process is thorough, with WebStreet evaluating around 200 businesses for each acquisition phase and selecting only 2%.
(8:49) Investors have seen annual cash returns north of 12%, with target returns of 20% annualized, including exits.
(10:57) Current investments are illiquid, but WebStreet is working on enabling a secondary market for easier investor exits.
(12:45) WebStreet primarily works with accredited investors, with a $60,000 minimum investment per fund.
(14:43) WebStreet currently manages around $20 million in assets across five active funds, with more funds in the pipeline.
(16:18) Management fees include a 1.5% AUM fee and a one-time 1% admin fee, with profits split among WebStreet, portfolio managers, and investors.
RAPID-FIRE Q&A
How did you get into the online business investment space?
My background is in finance, and I gradually moved into e-commerce around six to seven years ago. I joined WebStreet in mid-2021 and have been part of its growth journey since.
What kind of investors are you seeking?
We work with accredited investors who understand the risks involved and can allocate a small portion of their portfolio to this investment class.
What is WebStreet’s future goal?
We aim to expand and improve our investment offerings, enabling more people to gain passive exposure to the lucrative online business space.
How does WebStreet ensure alignment of interests with investors?
Portfolio managers are compensated based on the performance of the businesses they manage, creating a win-win situation for them, WebStreet, and investors.
What is the biggest challenge in managing online businesses?
The biggest challenge is ensuring consistent growth while adapting to the ever-changing digital landscape and platform policies.
How do you ensure transparency with your investors?
We provide detailed quarterly reports and regular updates on the performance and progress of the businesses in our funds.
We appreciate our listeners and are motivated by feedback. Visit WebStreet to learn more about us and our unique opportunities for accredited investors. Get more insights into alternative investing and learn how to capitalize on the digital world.
