In this episode of “Zero to CEO” on the podcast Strap on Your Boots, host Jason Sherman engages in an enlightening conversation with Mike Vranjkovic, an online business expert and executive at WebStreet. They discuss the ins and outs of owning established online businesses, from the initial steps for new entrepreneurs to the intricacies of investing in and managing online business portfolios.
Key Takeaways:
(00:16) Starting Out: Entrepreneurs looking to own online businesses should focus on acquiring essential skills, as similar skills are required across various types of businesses.
(01:45) Types of Businesses: Online businesses commonly include e-commerce storefronts on platforms like Shopify and Amazon.
(02:06) Business Acquisition: WebStreet often buys thriving businesses outright from owners who wish to exit and enjoy their earnings.
(03:25) Pandemic Impact: The COVID-19 pandemic accelerated the shift towards online shopping and remote work, boosting e-commerce but adversely affecting travel and hospitality sectors.
(04:32) Identifying Investments: Accredited investors should look for cashflow positive businesses and potentially partner with experienced operators if they lack the necessary skillset.
(07:13) Buying vs. Starting: When evaluating a business for purchase, investors should consider the established processes and product-market fit over starting a similar venture from scratch.
(08:18) Importance of Teams: The quality of the team running a business is crucial. Experienced operators or keeping existing management can mitigate risks.
(09:48) WebStreet’s Model: WebStreet raises funds from accredited investors and partners with experienced portfolio managers to acquire and run diversified online businesses.
(11:30) Performance Metrics: WebStreet’s funds have shown annual cash yields of 12-15% and an internal rate of return of about 20%, highlighting the importance of diversification.
RAPID-FIRE Q&A
What are the benefits of owning an online business? Owning an online business offers the potential for building wealth through creating cash flows and equity. Online businesses, especially those run entirely online without physical locations, can be highly scalable.
How does WebStreet support investors? WebStreet provides a passive investment option by creating diversified funds consisting of multiple online businesses managed by experienced operators. This helps investors mitigate risks and leverage the expertise of seasoned entrepreneurs.
What trends emerged during the COVID-19 pandemic? The pandemic accelerated online shopping and remote work trends. While e-commerce saw a significant boost, travel and hospitality sectors experienced downturns.
How can someone with no online business experience invest wisely? Investors without relevant experience should either find businesses that align with their existing skill set or partner with experienced operators. Investing through platforms like WebStreet can provide a hands-off approach with professional management.
What makes WebStreet’s model unique? WebStreet offers a diversified investment portfolio of online businesses managed by vetted portfolio managers. This approach reduces risks and leverages the experience of operators with proven track records.
What’s the future of online business investments? Online business investments are expected to grow as more people seek alternative assets beyond traditional stocks and real estate. Diversified funds in various asset classes, including online businesses, offer a new avenue for investors seeking to expand their portfolios.
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.
