Challenges and Opportunities in Buying and Selling Online Businesses

About the Episode

A fairly new investment model for investing in online businesses is gaining strength and interest. Justine Cooke discusses this fractional ownership program, which is accessible online and available to retail investors. In this model, investors seek passive income through fractional ownership of online businesses, with operators receiving equity and investors receiving majority returns. Justin highlights the benefits of this model for both investors and operators, including increased exposure and investment capital. 

If you’re going to start a second business, build or buy something that’s close or could share a customer base with your original business. It’s so much easier.”

Justin Cooke

What You’ll Learn

  • Online Businesses: Hear about the differences in investing and operating online businesses.
  • Investment Fund: Learn what sets an investment fund apart when it focuses on matching passive investors with operators.
  • Challenges: Focus on finding operators and investors, then putting together the right team.
  • Business Growth: Hear about the growing pains and opportunities that came with starting Empire Flippers and WebStreet.

Topics Covered

How does fractional ownership in online businesses work? [1:41]
What does a typical investing fund look like in terms of deal size and number of investors? [10:08] 
How do operators work with the fund? Can they make acquisitions of multiple companies? [15:10]
What are the advantages of fractional ownership for retail investors in the online space? [19:35]
What is the screening process for finding operators interested in joining the fund to buy an online business? [23:50]
What are the challenges in buying and selling online businesses? [27:21]
What examples of litigation has WebStreet been involved in? [32:38]
How much diligence is done on potential buyers? [38:24]

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Meet Our Guest

Justin Cooke

Justin Cooke

Partner/ Co-Founder, WebStreet | Austin, TX

Justin Cooke is a seasoned entrepreneur, digital marketing expert, and a leading figure in the online business investment space. Justin is a Founding Partner at WebStreet, a company that’s making online businesses a more accessible asset class for individual investors. With a portfolio of 30+ successful online businesses, WebStreet is revolutionizing passive investment in online businesses. Prior to WebStreet, Justin founded Empire Flippers in 2011 and is the host of the Empire Flippers podcast.

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