How You Can Own a Piece of Empire Flippers Capital
Updated on July 13, 2023
EF Capital is the first vehicle in the industry that allows mainstreet investors to own fractional ownership of online businesses – and we’ve got some exciting news!
What if instead of just investing in the jockeys and horses, you were able to buy the actual racecourse?
We’re opening it up to where you can invest not just in the different operator deals we bring to the table, but open it up to where you can own a piece of EF Capital (EFC) itself.
We’ll get into it, but let’s back up here for a second.
Maybe you haven’t been following along with our latest venture that is EFC, so let’s give a quick breakdown on what EFC actually is. EFC is our unique solution to tackle a significant problem in the online business industry.
It’s a two-fold problem, actually:
1. Successful, proven entrepreneurs needing access to capital.
2. Investors wanting access to smaller, profitable online businesses without the skills/time to run them.
Your typical affiliate website, Amazon FBA business or micro SaaS generate higher returns than a real estate rental or a stock market investment.
Successful entrepreneurs and operators desperately need cash to help them scale and grow their businesses.
Investors want in, but how do investors find people who can actually run these businesses successfully? After all, very few investors have the time or capability to run these businesses.
EFC was launched to solve both of these problems.
We match operators with a proven track record up with investors looking to cash in on the strong returns that digital businesses offer.
The operator gets the capital, and investors for the first time ever get a way to cash in on digital businesses in a completely passive way.
These passive investments transform into investor cashflow through quarterly distributions.
Over just the last 18 months we have launched 3 Rounds of EFC. These 3 Rounds have brought in $18M+ in investments across 11 operators, who have purchased 25 digital assets. The early Rounds have started cash flowing, providing quarterly distributions of 4-5%. This is very much on track for the 20% annual investor returns we project over the life of the deals.
So, why are we going to offer you a chance to buy-in to EFC itself?
A Tale of Two Empires – Why EF Capital and Empire Flippers are Splitting
EFC is branching off from Empire Flippers.
It started as a sister company for us but has now grown up and is ready to go off on its own. EFC benefited greatly from sharing resources with Empire Flippers.
Currently EFC can only acquire businesses from Empire Flippers. They share our slack, customer support system, even our Hubspot marketing automation. On the surface nothing seems wrong here, of course a company you’re spinning up to complement the main one would have all these things in common.
Economies of scale, right?
The problem comes down to the actual acquisition of businesses. EFC frankly competes with our other buyers for the same businesses, and one could say with an unfair advantage built-in.
Now, we’ve got to be clear, we’ve done everything possible to create a firewall between EFC and Empire Flippers proper. Yet, it is still a concern that with EFC being so closely tied to EF that other buyers might feel like they’re only looking at deals after EFC took all the good ones.
This is of course not true, we force EFC to compete with our buyers like we would with anyone. Also EFC acquisitions advisors and EFC operators who are making the buying decisions and doing the negotiating don’t have any access to EF internal tools and aren’t able to see anything else that any other buyer wouldn’t. In fact, EFC lost a few deals to other buyers.
The bigger issue is EFC’s hands are tied to only buying businesses from our marketplace. This ties their hands when it comes to finding the absolute best deals. We think we’re one of the best marketplaces around but that doesn’t mean there aren’t good deals to be had elsewhere too. By limiting EFC to only the Empire Flippers marketplace, we’re also limiting EFC’s ability to deploy larger and larger amounts of capital as it grows.
What if EFC saw a business with another broker that was super undervalued? If EFC found the perfect business with amazing potential at a conference? Or what if EFC wants to support entrepreneurs who want to continue scaling their business with the help of investors rather than selling theirs off or buying another?
All of these are real possibilities that can provide strong returns for EFC investors.
But, it’s also not currently possible with the way we’ve set it up.
While we had a separate company, team, and incentives, we ultimately shared the same brand, resources and support. EFC and EF were competing for shared resources from departments like Engineering, Marketing, Accounting, and HR. In the end, EFC is too deep into the EF ecosystem to fully expand its wings and go to where we know it can go.
Our plan is to split EFC completely off the EF ecosystem, rebrand it, and provide an even more amazing experience for investors and operators as EFC buys more businesses from Empire Flippers and elsewhere..
All of this begs the question, what is the vision?
The EFC Moonshot – $100 Million Capital Deployed Per Year
Retail ecommerce surpassed $5 trillion dollars in worldwide sales in 2021.
The top 100 ecommerce aggregators saw over $15 billion deployed into them alone by institutional investors.
The last two years saw a decade trend of ecommerce eating the world happen seemingly overnight. And though financial markets are in a tough spot right now, there is no going back. Ecommerce runs, fuels and will rule the world of online businesses across a variety of business models.
All of this sounds great, right? Well, you can’t have any of it.
That is because the kind of opportunities I mentioned above are just not available for the everyday investor like you or me. These opportunities are typically reserved for private equity funds, who often lack the skills to run the assets and so they deploy the capital with operators.
This is the big picture. This is our moonshot.
EFC democratizes this whole process. It opens up the same opportunity not for those in the ivory towers of finance, but for the accredited investors like you.
You can now have the same opportunity as these private equity firms and invest into these digital businesses that are set to take over the entire world in the coming years. This is not an experimental business model either. We already mentioned the aggregators above, but this kind of business model has been proven over and over again.
You can see it at play with the many real estate investment platforms like FundThatFlip, Roofstock, or Crowd Street. There are companies like Masterworks doing it with fine pieces of art. Even wine and farmland are being sold as fractional investments now, offering a greater breadth of opportunity for investors to own alternative assets outside of just the stock market.
These alternative investment companies are no small fry either. They’re operating at huge valuations themselves for giving this opportunity to investors.
Masterworks is valued at over a billion dollars, and Start Engine too.
All of this is to set the stage for you at what EFC can become. We’re the only ones democratizing this asset class and creating an investment platform that gives accredited investors true access to this fast paced sector.
The good news is that EFC already has traction.
We’re a proven market fit. All the money we’re raising for EFC isn’t a raise for an idea, but a raise for a vehicle already in motion. The capital is merely fuel to let us go faster.
In order for EFC to work we have to do four critical things:
- Find and select proven operators
- Show ability to raise capital
- Help operators acquire assets at a profitable ROI
- Give investors solid returns to make it worth their while
The good news? We did all of this already:
- We’ve gone through 300+ operators using our knowledge of the online business world and selected 9 high performing operators so far
- Our 11 funds have closed $18.5 million from across 250+ investors and 3 different investing rounds
- EFC has helped our operators and investors acquire 25 assets so far with no sign of slowing down
- Our investors so far have received 4-5% quarterly cash on cash returns, on track for 20%+ annualized returns over the lifetime of the asset ownership.
All of this is just the start.
Our moonshot opportunity, our vision is that EFC is going to start deploying $100 million per year.
EFC has the opportunity to seize the entire industry by storm as the first, most innovative platform matching passive investors up with active proven operators.
The total addressable market here is huge. Talk to anyone about the attractiveness of owning an online business and almost everyone will say yes they’d love to get involved. Add in that the investment is completely passive and you get entire rooms of people raising their hands asking how to get started.
If any of that sounds incredibly exciting, I’ve got good news…
You had no option to invest in Empire Flippers back when we were starting out but you do have the option to invest into EFC before it hits all the milestones I outlined above.
This is exactly where you come in.
Owning a Fractional Share of EFC
From the beginning we knew that it would take multiple years for EFC to be cash flow positive. This is due to its structure of aligning interests with investors and operators and making money on the profits. There is a delay on when cash flows kick in for both EF, Investors, and Operators. First EF spends money and resources to find and vet operators, then it raises money from investors, then operators make acquisitions, finally the businesses begin paying out 1-2 quarters later. The delay for investors and operators is 9-12 months. The delay for EFC is 12-18 months. This is amplified when EFC is growing.
We initially funded EFC with a loan from Empire Flippers to cover operating expenses for its dedicated team. Now, it is ready for another round of capital infusion to take it to cash flow positive and pay back the loan to Empire Flipper so that it can stand on its own.
People who are excited about this project and wished they had the resources to do it themselves, can now just passively benefit from what EFC is creating by owning a fractional share of it.
We are selling a small minority stake in EFC to accredited investors with a $50,000 minimum investment per investor.
The majority of EFC will be owned by Empire Flippers co-founders Justin Cooke and Joe Magnotti, and of course the EFC managing partner Mike Vranjkovic who has led the project since inception.
If you’re interested in learning the details then fill out this form.
What does that next 5-10 years look like?
To put it bluntly, a lot can happen in that timespan.
It was only six years ago that our biggest business we had ever sold on the Empire Flippers marketplace was around $150,000.
Today, that is considered quite small by our standards and we regularly sell 7 and 8 figure businesses and we’ve sold over $400M in businesses in total. We went from a small start up to an industry leader that now boasts the largest team and curated marketplace in the entire industry.
We know a thing or two about building something big once we get all the puzzle pieces in place.
The next 5-10 years are going to be a wild ride for growth. The question is, will you come along for the ride?
If you want to learn more then click here.
