The Exchanges

Q Okay. And typically any sort of dividend that happens like again in a public market is quarterly. Um, some are single, you know, once a year. How do you guys handle payouts?

A Yeah. So ours are quarterly. So we do quarterly cash distributions. Uh, we have what's on our platform. It's called a, we call it our web street wallet, but it really just goes into your web street account and each quarter you can either withdraw those funds, you can reinvest them. You can let them sit there and grow. Um, and then reinvest, you know, whenever you're ready. Um, so yeah, quarterly cash distributions. And I guess one thing that's important to hit on is it's a two third, one third split. So because you're not actively running these businesses, right? You don't own, you have no say in what's done in the businesses. You, the investors receive two thirds of the profit every quarter. And when these businesses are sold, which is generally in the two to four year range, after you invest, you receive two thirds of the profit on the exit. So if it's a For let's say it's a million dollar fund has three businesses. They all grow to collectively to a million and a half that half million dollar growth is the investors receive two thirds of that when the business is sold as well. So two thirds, one through third split throughout the life of the business until it's exited.

AI assessment note: “Yeah. So ours are quarterly. So we do quarterly cash distributions.”

Q So if someone were interested, is it something like Kickstarter where you can see individual companies that are available to be invested in? Or do you say, oh, I want the e-commerce fund or I want the SAS funds. Like how does that work?

A Yeah. Right now the model is not seeing the actual businesses. It's seeing the type of type of fund and the operator that's behind that. So, um, because we've had such a long history in the E-commerce online business space. We have a big network of people that have bought and sold many sites, right? Over the years, they've come to the marketplace, empire flippers or otherwise, and bought and sold multiple sites. They have a good track record. We bring them on because they, well, they have different reasons for wanting to come on board with us. Some of them want to do buy bigger and larger businesses than they've been able to afford in the past. And, um, uh, some of them, you know, just want to implement their strategy again on many, many different businesses, but whatever the case is, You come say, see like, okay, I want to invest in this fund because it's in the SAS monetization and I trust this operator's background. He's built and sold five different websites or five different, uh, softwares. You know, he's got a great team behind him and you get all of that information ahead of time. You can see what their track record is. And the last thing I'll say on that is, uh, a lot of these operators, they come work with us multiple times. So they'll come run a fund. They have a track record. They distributed, you know, 20% IRR over the last four years, and they're ready to do anothe…

AI assessment note: “Right now the model is not seeing the actual businesses. It's seeing the type”

Q What do you think is a reason why someone would look for this specifically?

A Yeah, the majority of our investors, uh, are more entrepreneurial type, right? They're aware, they may, maybe they've built and sold sites and they want to, um, continue to be involved in that space, but they're not interested in running them anymore. Um, like I said a minute ago, like a lot of people are heavy into the stock markets. They've got their four one K they invest in S and P 500. Um, maybe they've played around with a little bit of real estate, but they still have other money. They want to invest in diversify. Um, We get a lot of those type of investors. We get investors who really enjoy just learning, owning a piece of websites, knowing what those websites are, being able to talk about them with their friends at dinner table or talk to a party, whatever. Um, but generally it's people that, um, they don't want to be active in running these sites, but they are more interested as like an active investor, right? They want to know what they're invested in and then they get more from it than just the monetary benefit.

AI assessment note: “they want to, continue to be involved in that space, but they're not interested”

Q because he was building the company. Um, which I'm fine with because as the business grows, the value in it becomes more, and eventually it will grow to a point that it can afford to give me cash without destroying the ability to grow. So how do you balance those things? How do you pay out a quarterly dividend to all the investors without destroying the company's ability to grow?

A Yeah, that's really insightful. Um, and I can see. I could see that happening in a lot of different scenarios. So really that's where web street comes in. So some people might be wondering, you know, what, what does web street do to earn any part of this other than provide the website? Um, so we like to say, uh, we provide a fund in a box. So all the legal, all the taxes, all that stuff. I want more people with that, but the part you're talking about is where we really come in. Um, so we help ensure these operators, um, of course we audit all of their bank accounts, their, uh, P and L's. Um, but we also make sure they're making the best strategic decision. So a lot of times we will hold back distributions for a quarter or two, um, to help with fluctuations in inventory. So some of these that are FBA, Amazon businesses, um, you know, these are very experienced operators. They can definitely be trusted to, to run the business as well, but that doesn't mean they're perfect, right? So our team has a ton of experience in the online business industry. So accounting for things like seasonality, accounting for things like Google updates that may be coming down the road or advertising pricing changes, things like that, or, you know, supplier issues with, you know, we all are aware with COVID and different, uh, supply chain issues. Um, so there's a lot of times where we'll hold back work…

AI assessment note: “a lot of times we will hold back distributions for a quarter or two”

Q able to like, you know, like mutual funds, right? You can create an index of like different brands. So you can kind of go maybe to like a Robin hood or a Vanguard and say, I want to create this kind of custom index. Is there something like that, that you guys offer or something that you might do in the future? Cause I think that would be really cool.

A Yeah. Not currently, like I said, the, um, Once you invest and once the brands are purchased, you as the investor do know, but I understand completely what you're saying. You would like to know before you invest. That's a model. We've definitely considered. It's not one we're offering at the moment. Um, but I think probably down the road, we will, there's some different things you have to do, uh, from a regulation standpoint. And then also, um, It would be a little bit different. You would probably get commitments ahead of time. You need to be able to have the cash to go out and buy these businesses, right? So that's one of the things that makes us pretty competitive in the space is Not just that the operators are great at running these businesses. When we go decide we want to buy a business, excuse me, we have the money ready to go so we can be really aggressive in our negotiations and get a good price on the business, which is of course great for investors.

AI assessment note: “Not currently... That's a model. We've definitely considered... probably down the road, we will”

Q Is there anything that we haven't really talked about that you think would be quite valuable in rounding out this conversation?

A Yeah. Good question. Um, not really. I mean, I, I think we've, we've kind of talked the structure and the different business models, um, in depth. I, I just would encourage people if you're interested in investing, whether it's with us or whatever, um, Whatever asset class you want to be involved in to, to really do your due diligence and get educated on it. I mean, that sounds pretty basic, but if you're not understanding, you know, if you're not asking the types of questions that you're asking me or that we're discussing and really understanding how these models work, you're just going to be disappointed as an investor. Uh, it's more fun when you're educated, you understand what you're investing in, and then, you know, you're going to have some investments that are going to do well and some that won't. And if you don't understand how they work, um, I, I, I think that's a pretty big mistake. So that's kind of what, what I would wrap it up with, but I think we've talked web street and online businesses pretty in depth.

AI assessment note: “not really. I mean, I, I think we've, we've kind of talked”