Our newest round isn’t just another chapter; it’s a whole new book on how to invest and earn passive returns from cash flow positive online businesses.
Starting with Round 6, investor capital is dynamically allocated across a range of vetted businesses based on available opportunities during the acquisition period. This will deliver greater returns with reduced risk and a more streamlined experience for investors.
Intrigued? Keep reading to discover why Round 6 is the game-changer you’ve been waiting for.
Why We’re Shaking Up Our Fund Structure
Previously, WebStreet let investors invest in individual funds, each managed by a separate portfolio manager.
While this offered choice, it also posed risks—over 75% of investors diversified by choosing to invest in multiple funds, but those who didn’t found themselves vulnerable to a single fund’s ups and downs.
As we implemented stricter acquisition criteria based on what we learned from our previous five rounds, we also ran into challenges when it came to deploying capital. If a deal fell through or market conditions were unfavorable, capital would be left unused, forcing us to refund investors.
This was not the ideal outcome for our investors who were ready to invest that money and realize returns.
Ultimately this is why we made the decision to change our fund structure.
Round 6 streamlines our previous “invest in all option” by shifting investment into a single, diversified fund.
This revamp means your investment automatically spans all available assets in a round managed by different portfolio managers, maximizing exposure and returns. This shift brings more agility in capital deployment and better risk mitigation.
This is just the starting point for how our new fund structure will benefit investors. Let’s explore the other facets of this change and what investors can expect (and look forward to) in Round 6.
Delving Deeper: What This Means For You
Changing our funding structure comes with key benefits for our investors. Here is how the new structure will improve and streamline our investment process:
Enhanced Acquisition Process
With our new structure capital is agile and flexible.
No longer will deployed capital be tied directly to portfolio managers and their unique acquisition goals.
Capital can now effortlessly move across portfolio managers, ensuring a greater range of investment opportunities and a higher likelihood of deploying more of the available acquisition capital.
With flexible capital, here are a few scenarios that could play out:
- If one Portfolio Manager is unable to secure an asset within their criteria, that capital could be used by another PM to acquire a business. The outcome: more capital deployed
- In the case that there is a very strong asset that would have previously been outside of a PM’s price criteria, extra capital can be allocated for that acquisition. The outcome: The best acquisitions lead to higher investor returns.
Streamlined Investor Experience and Simplified Operations
We’re cutting the hassle of multiple forms and repetitive tax detail entries.
Before, when you wanted the “invest in all” option, it meant dealing with filling out paperwork for each mini-fund. Now with a single fund to invest in, documents only need to be submitted once.
To build off the previous point, fewer funds also equals fewer K1 tax forms. This simplifies the operational process for our team and makes tax season easier for investors.
Considering 75% of our investors chose “investing in all” for our past rounds, and our investment thesis relies on diversification, it made sense to simplify to a consolidated investment fund.
Diversification remains paramount to our investment approach. With one fund, every investor is guaranteed exposure across the assets available in that round. Now, we can provide that experience with less form-filling and save time for our investors.
Private Equity Style Investing
For future rounds, this new structure aligns us closer to a private equity fund rather than a “marketplace” for funding individual operators.
For larger investors familiar with how investing in private equity works, this creates an investing environment where investors are poised to make decisions based on WebStreet’s overall track record rather than individual managers.
This means more skin in the game for us, something we are happy to take on. Trust and decision-making are placed with WebStreet, just as a private equity firm would be trusted to choose the right acquisitions for their investors.
The Outcome: An Overall Better Investment Process
Imagine an investment world with less decision fatigue.
Less worrying about what to choose and if that investment choice is optimal. Less scouring of potential investments and trying to work out which might produce better returns.
That’s what we are giving investors: a single yet diversified place to invest capital and reap returns passively.
It’s all the benefits of “Invest in All” minus the paperwork, decision fatigue, and due diligence.
Investing with WebStreet is simpler than ever. Choosing to invest in our fund means you’re investing in WebStreet’s track record of five successful funding rounds, and all of the talented portfolio managers who contributed to making that success happen.
It’s a hands-off approach for investors as they give the responsibility to a team of trusted professionals to acquire the best online business assets for investment.
You may be wondering: “what if I could do better by choosing my own fund or portfolio manager?”
WebStreet’s data says otherwise; because the financial model is predicated on a fund containing one big winner that has on outsized contribution to the upside, the likelihood of picking that specific business is low. Now, there are often several big winners in a round but on the whole investors that diversified fared significantly better than investors that didn’t, capturing the upside every single time.
A Future To Look Forward To
Our transition to this new structure in Round 6 is not just about change; it’s about progress. The momentum we are building in Round 6 is just us getting started. Here are a few more updates that highlight what investors have to look forward to:
Our First Exits are Happening: This is a moment we’ve been building towards to showcase what investors can earn over the lifetime of a fund. Investors from early rounds now have a chance to cash in on an exit and see round trip returns.
Welcoming SaaS to WebStreet: Round 6 now includes SaaS—an addition to our portfolio that provides strong cash flow potential and an added layer of stability to our diversified portfolio of businesses.
Opportune Market Dynamics: The current market environment is opening doors to attractive deal opportunities at lower multiples, offering better acquisition and ROI opportunities for investors.
Ready to Dive In?
If the allure of SaaS and the prospect of earning regular quarterly distributions and strong returns sound tempting, now’s the time to take the plunge. Invest in our upcoming R6 Fund. Schedule your call today and let’s kickstart your online business investment journey together.
