NICE NICHE! Feat Stefan Von Imhof

Stefan Von Imhof has accelerated Alts.co (with his co-founder Wyatt) into a content & investment powerhouse, with 100’s of 1000’s of people along for the ride and continuing to grow. Stefan shares their unique company building story, which includes scaling the evolution of Alts into ALTEA: creating an invested investment community, focused on a broad range of alternative assets (no matter how esoteric they might be)
FFO: ‘Oh I don’t know: economic meets pop-culture trends and the power of curation with taste?’

Gaz:

So, tell me about the multi-faceted aspects of the business?

Stefan:

So we've kind of got like two things going on with the business right now.

We've got a media side of our business, which we're out here to tell every freaking story about alternatives; to learn as much as possible, and to take our community along for the ride. That’s fun and awesome.

But now we’ve got this private community focused on high net worth, accredited investors, serious alternatives, and that's what we're leaning into, and that's where all of the energy and effort is going into and that's what we're most excited about.

And that private community is called ALTEA.

ALTEA is the future of our company, for sure. The way ALTEA works is straightforward:

You pay an annual membership fee to join a highly vetted community with other accredited, high net worth alternative investors. You can invest in deals we bring to the table. And you can join our investor trips.

We have special deals that are vetted, that we bring to the community. And the fact is, we have more deal flow in alternative markets now than ever before. 

As we all know, some deals are great, some of them are okay, and you have everything in between. But for the best of the best — those are the deals that we actually bring to ALTEA.

And the best part is that we ‘invest together as a community’ (a minimum of $500,000) through an SPV (Special Purpose Vehicle).

In ALTEA’s first eight months, we did four of these SPV deals.

The first one was an artwork bundle through our broker in London. We raised $400,000 USD on that, and now that's done and dusted. That was the very first deal we ever did. $400k assets under management.

The second deal we did was actually another artwork bundle with a different type of British modern artist. This one's more of a long term hold, different investment risk and reward profile. We raised another $544,000 USD on that one.

The third deal we did was a tequila deal, and that one was really special, because that involved an investor trip down to Mexico to do the due diligence and to meet the tequila dealers and to go to the distilleries. We met the mayor, and got to know the players involved, and immersed ourselves in the scene.

Oh, and we took 15 members from the ALTEA community down on this all-inclusive tequila adventure for a week into Jalisco. Best of all, we came back with another half a million dollar investment in 80 tequila barrels that are literally sitting in a warehouse in the town of Tequila. I could point to the warehouse on Google. We know exactly where they are. We know how they're insured. We know who operates it. We know this is a great investment.

Gaz:

So on that, with some specific detail, if you take 15 investors on this type of study tour, what's the strike rate of how many of them invest?

Stefan:

Three or four of the folks that came on the trip ended up investing in the tequila deal. We’re talking about aspects of community as moat here, and getting people involved is half the fun. The other half is just the camaraderie — forming a kinship with other similar minded investors.

Everyone comes from different walks of life in our community, like, there's folks that are, you know, a lot of them have made a lot of money in real estate, let's say, and they just want something more exciting, something they can talk about at cocktail parties, you know?

Other folks come from a specific area of alternatives. They may come from the world of wine, but tequila is new to them. Other folks that we've got in the community come from the tequila world, but now they're looking for film financing deals, you know? And on and on it goes!

But the one thing everyone has in common is just a thinking outside-the-box mentality; a hunger for esoteric, exotic alternatives. But the key is that they're good deals and they're vetted, and this is what we do that nobody else does.

First, there's a million investment communities out there, and almost none of them are focused on alternatives. Second, even the ones that like to dabble in alternatives, they don't do the due diligence. That's the most important part! They’re basically just giant databases of deals, and it’s all do-your-own-research. Off in the deep end you go! FAFO.

That is not us at all.

We do the curation and hard work that like no one else wants to do. That's what we love doing the most. That's what Wyatt and I have in common. In fact, that’s how we found each other, through due diligence, really.

We love diligencing deals. It's a huge part of what we offer. And it's, it's super meaningful. I mean, to give you an example, those first three deals that we did, they raised nearly a million USD combined. We’d launched deal number four, which was a film financing deal, financing a Hollywood film.

And this is like, man, this deal is everything that we are trying to be and bring to the world.

It's unique. You literally cannot get this stuff anywhere else. It's alternative as heck. It's potentially very lucrative. It's emotional, like the Hollywood angle. I mean, these are real star studded films that you're going to help finance. These are essentially short-term bridge loans. And the proof is in the pudding.

Gaz:

So where are Alts and ALTEA heading towards in your future, now?

Stefan:

We can basically bring about one vetted deal to the community per month. That's kind of where we're at right now. This is not inherently the kind of thing that can scale to a degree where we're doing. Like, truly, if we're doing this right, there's elements you can scale, but there's things that you cannot scale.

We’re starting to bring some incredible, unique stuff to the community. A collection of three Ferraris. Litigation finance deals. We’ve got our first investment in sports teams, with a small investment into what will eventually (hopefully) be an 18th NRL team in New Zealand. 

We are basically focusing on quality above all else, because all it takes is one shitty investment to sink your credibility.

We had some investments that haven't been great, but, we've never had a strikeout or anything close to that. They don't all have to be home runs, but they've got to at least be singles, doubles, triple, and you can't strike out. You just cannot.

Now, on one hand, our deal flow is a really good thing. It means we don't actually have to do the sourcing on the deals. They're basically coming to us by virtue of who we are. People find out about us. People talk to each other, word of mouth, blah blah. But vetting deals is another story.

The first thing we do is we just vet it ourselves. We do a sniff test, basic research, and we make sure that a fact is a fact, before we call it a fact.

But the other thing that we do is, every single deal we get, we put in front of the entire community. This is a demand exercise. The goal is to see what the best deals are from the 200,000 newsletter subscribers that we have. If something's a winner from this broad demand standpoint, then we say, “All right, let's look into this deal further and potentially bring it to ALTEA.”

And once it’s in ALTEA, experts within the community help diligence the deal!

We call this concept “Decentralized Due Diligence”. And the concept is interesting, because as our community grows, we get more and more experts in different areas now that can help us.

This is the thing so many people don't understand about our business. They always tell me, “Dude, I love what you do, but how can you be freaking experts on all this stuff?”

I tell them, I'm not an expert on all these asset classes, are you kidding me? We find the experts and fold them into our community! They're in our community. They help us diligence deals, and I’ll give you an example:

There was a really in-demand deal for a Philippine avocado plantation investment opportunity. So it's basically buying avocado plantations in the Philippines. They have the right weather. Asians are developing a big taste for avocados. The big companies aren't there yet. So on paper, it looks good. 

We put it in front of the community, and demand was through the roof. I mean, just through the roof, I'm talking like over $4 million in demand. Everyone wanted in.

So we knew we could definitely raise at least $500,000 if not maybe, close to a million bucks from the community. 

But is it a good deal?

Well, it turns out there's a farmland avocado specialist in our community.

This guy (who is a PhD) basically did the due diligence on this deal. He created a pro forma cash flow analysis. I mean, the amount of effort he put into this, basically just for himself to learn well, and then he shared it with us, and then we read it, and we shared it with everyone, and that we basically came to the conclusion that, like, look, it's not a bad deal. But it definitely has some risks. So we didn’t end up spinning up an SPV for it after all.

But the point I’m trying to make is, we're not the experts, we partner with experts in this stuff. And then by virtue of doing that, overall, after a while, well yes — there are asset classes that we have definitely become experts in.

I am an expert at tequila investment, for sure. But you know, that's not the way we build our way towards that with every asset class we are. We do not pretend to be experts on them. We just partner with the experts, and they're already in the community. That’s the critical thing here.

Where we kind of are now is, we're in a position where we can bring about a dozen unique, alternative, vetted investments to the community each year, and each one will raise at least half a million, up to maybe a a million and a half each.

So we're adding about six to maybe $20 million in AUM per year. That's at the current size, that's at our current operational capacity, if we continue to execute, and hopefully we can, that can go up, but that's that's where we're at at this very moment.

Gaz:

So I'll maybe ask a two sided question, but I think they'll both come together quite nicely. One is, you've got people autonomously leaping into work that's not really theirs, but they're part of your community sort of attached themselves to your brand, and sort of feel this sense of agency to to get involved and and not do your work for you, but as in, do the work for the people, serve the people, so to speak. So I find that really cool and interesting.

Stefan:

It’s truly self interest, yep, but it's self interest for the benefit of everybody. So remember what I said about we, we're trying to learn this stuff for ourselves, to figure out what's a good investment and take everyone along for the ride.

So are other people in the community? Yeah, so, this guy reached out to us. He's like, “Hey, man, I did this due diligence on this deal. Do you want to see it?”

I'm like, oh my god, absolutely, I do. Thank you. He says, ‘I didn't do it for you. I did it for me, but I might as well share it with you.’ And I simply say, ‘Oh yeah, let's talk right away.’

So it's an important distinction, because really it is for them, but it does benefit everybody.

Gaz:

So, on content and audience growth, you’ve got this side, the Alts progress. And then on the other side of the business, you're building this community, and you just continue gaining readership globally, in all these different pockets of the world, which is truly interesting.

Alts has become the curator and the taste maker, for the group of people that find this like, common interest in the initial days of getting started. But who was the tastemaker for you to be able to get the inspo and get started on building this thing?

Stefan:

The truth is that, there was nothing else like it, and we just wanted it to exist! There was so much happening in 2021 from so many different angles, and no one was just doing the hard work of just wrapping it all up into a single value prop, a single package.

And it's funny, it's the opposite of what they teach you in business school, which is, like, “focus on a single area and then move to other verticals.” And I just said, fuck it. There's so much happening right now in the alt investing world. There's so much to invest in, but nobody is doing the hard work due diligence, no one's making sense of it, trying to learn it all.

I'm going to do the opposite of what they taught you and they teach you in business school. I'm going to go as broad and wide as possible. And I think, in the back of my head, I knew that would be a good strategy, because while you can spread yourself too thin doing this, on a long enough timeline, it actually works.

And then also the other thing, one market goes down, another comes up, right? So you're not beholden to certain asset classes like others, you know, I won't name company names or whatever. But, there were competitors. There were companies that we thought were competitors back in 2021 and they kind of aligned themselves too closely with, actually, certain collectible asset classes.

Meanwhile, we had moved way beyond the world of collectibles, you know. We moved into real stuff. And so now they’re kind of suffering, if not out of business completely. And we're in a whole other realm.

Let's not kid ourselves, we still love collectibles! That's still a part of what we do! But we never made it our core identity like they did. And that has made a huge difference.

And so when those markets suffered, we didn't really suffer because we had moved on to other markets.

So in hindsight, there was no one else doing it, no one else doing it as broadly, and that has served us well.

See, people love how spread out we are. They know that even if what we write about one week isn’t what they care about, they won’t think, ‘Oh, I'm done with you guys,’ or whatever. They’ll keep following us, because they know the next week it'll be something different.

And, like, the fact that you keep mixing it up keeps people coming back, gets people interested. I mean, we have had some stuff I've covered where, like, right when I hit send, I'm like, “What am I doing? I don't really think this is great.” And then sometimes people say, “Dude, that was awesome!” Haha. So who the fuck knows.

And then there are other issues I'll put my heart and soul into. I hit send on Sunday, I wake up on Monday and I check my inbox. And…there are just no comments about it. No one’s in there, it’s like nobody cared. So it works both ways! 

Gaz:

Yep, you never know what's gonna, you know, resonate. Such as when our mutual friend Dan introduced me to the world of heritage plates.

Stefan:

Oh yes, yes, heritage plates, absolutely.

You probably know some of those same people we interviewed for that issue, right? We can't name names, but like, you know, there's some people that I know he's friends with, and he introduced me to, and so I took a rabbit hole into that world, and, oh my God, that was… I mean, we got written up in the Sydney Morning Herald on that one.

It was… I had all these people from that world reaching out to me asking about it afterwards. But the thing is that market isn't actually that great anymore. It's kind of like, it's like, some people love reading about it, but there's no, I would not invest in license plates anymore. Those days are kind of over…

I mean, this is what we do, you know, we just, we're just exploring markets, man, that's it.

There have been a couple where we've, we've really nailed the zeitgeist on, like, timing and, you know, we were early to x trend and that kind of stuff. Yeah. I mean, tequila, tequila is absolutely one of them.

I mean, that drum beat just continues to get louder and louder. Yeah, even now, if you Google tequila investing, we rank highly. We come up super hot. So there have definitely been some big wins.

Gaz:

So if you're, if you're speaking to someone, and you're like, excitedly landing the light bulb moment for someone who's unawares of Alts, or the position you're taking in, sort of, like driving interest in these categories, etc. what are you going to communicate to someone who's unaware of you, or what you're doing, and what are you most excited about in sort of landing that context with them?

Stefan:

Yeah. I just tell them, like, look, the idea behind Alts is simple. There’s a million startup syndicates out there, right? There's a million, like, real estate community and syndicates and funds. And that's all fine and dandy.

But, like, what about all the other alternative investments, right? Where do you go if you want the off-market deals for barrels of 100% agave tequila? There’s no market for that you can just access, right? You don’t just go to tequila barrels dot com, drop half a million, and trust the guy on the other end. It doesn’t work like that.

To get the best deals, you have to know people! You have to do the hard work that no one else does. Same with avocado farms in the Philippines, same with pro sports teams. Same with music and film and litigation finance deals.

You just gotta do the hard work.

That’s where Alts comes in. That’s why we do the research. That’s why we get to know people in these industries. That’s why we go to Mexico and Nashville and everywhere in between.

We’re a place for serious alternative investors to get access to those unique, vetted deals you simply cannot get anywhere else. Learn about these alternative markets from other community members that are experts in some of them, invest through our SPVs, and get to know other folks in the community through our Investor field trips. 

There’s just nothing like it out there. This is the community we've always wanted to build. It's the community within the community, right? It's the, ultra serious high net worth folks that, you know, really want to shine in this world. There's just nothing else like it out there. And that's why we love it. I love it.

Gaz:

Alright, I'm going to just fire four rapid questions at you, just single answers, pop culture related. 1. Alts focus: something to keep an eye on in the future, like that you're passionate about.

Stefan:

If you know me, you know I'm obsessed with vinyl and nostalgia, music nostalgia, right? It could just be my bias, but, I mean, it is fascinating. How many people there are like me, and I think us, out there right now, like there is something very serious happening with nostalgia, in a way that wasn't the case when we were kids.

So, put it this way: when you look at Gen Z picking up cassettes, you know, vinyl records are obviously coming back in a huge way. That wasn't the case like when we were in high school. Man, like, we, like, we knew of the 60s, but we didn't care that much. We didn't, we didn't attach ourselves to that, to 60s culture. Yeah, maybe shape, way, shape or form.

But yet, that is actually happening now, and you've got folks as young as like, 25 and as old as that are like, deep into this, this vaguely nostalgic period from like, the 60s all the way to the 90s, yeah. That is a trend that is endlessly fascinating to me. Endlessly fascinating to me. I believe in it. I think it has legs. It clearly has legs. Look at the numbers.

And so, you know, I am a little biased there, and I like to cherry pick some data sometimes in this area, let's not kid ourselves, like we talked about vinyl revival, like streaming is absolutely king. And, yet there is no denying it you know.

But at the same time, the fact that something that's literally four technologies old…! I mean, in between vinyl records, you had the tape cassettes, you had CDs, then you had MP3s that you downloaded, and then you have streaming that you don't download MP3s, right?

Four technologies old. It's coming back. It's like 7% of the market right now. I mean, it's just fascinating. And so, yeah, I that is a trend that I don't you could write a whole message on what it means and the psychology behind it, and many people have started to do basically that, but from an investment standpoint, yeah, it means there's a lot of collectible nostalgia out there, and that is a huge part of what we do.

Gaz:

2) So you're recommending someone a movie to someone. What movie is that?

Stefan:

Again, not to be that dork, but I mean, dude, do you want to know what I do every Friday? For real, almost every Friday, I walk my ass down to a shop on Swan Street in Richmond, yep. And there's a, there's a business there that has DVDs. A big building, three stories high, full of DVDs. Not even kidding.

The guy who runs it, like, he knows everything about every movie ever made. He's probably got, I'm just guessing, 15,000 - 20,000 titles, no joke. I mean, it's just packed to the gills with DVDs. There's no space in there! Everyone's trying to shuffle past one another, and I swear it's packed every Friday.

People are picking up three movies for 10 bucks for the weekend. Yeah, on DVD. I mean, it's just so nostalgic. Hate to go back to that answer, but I'm discovering old stuff. Yeah, some of it holds up extremely well.

Some of it doesn't hold up at all, yeah, but I just…I love that physical media. I love discovering the old stuff. I also love directors commentary. And you get that with DVDs, you don't get that with streaming, right?

Awesome deleted scenes, director's commentary. So, yeah, I mean, I'm the wrong person to ask if you want to, you know, talk about the latest Marvel movie or something. I couldn’t care less about the Avengers.

But if you want to talk about, you know, Weekend of Bernie's, I’m your guy!

Gaz:

I feel exactly the same way director's commentary is a missing piece, and I still have vivid memories of being in video stores and seeing, like in horror sections, I remember there was such a stark visual on the horror titles, whereas, you know, that’s sort of missing now.

Stefan:

Yep. But I wouldn't get into VHS. That's a garbage technology. It has no legs, in my opinion, none. Yeah, blu ray is flawed too, for different reasons. Stick to DVD collecting and thank me in 20 years.

Gaz:

What's the ultimate record?

Stefan:

Oh, man. I mean, so I don't know if you can see I've got all my records (points behind). Oh, hello. Oh, they're there. Oh, they're all amazing. So I'm gonna, I mean… look, the cool thing about record collecting is, with Discogs and stuff, now you can just enter all your inventory into the database and kind of understand what you're sitting on, what things are worth.

So the most valuable record I have is this, this Beatles copy of Revolver, it was re-mastered by Mobile Fidelity Sound Lab. So back in the 80s and 90s, these guys basically took Beatles records and they were way ahead of their time technologically, they stripped out all the junk in the in the in from the Masters, yep, and they just crisped up the sound and, like, fucked with the compression. And I'm not actually a technophile audiophile. I don't actually understand how it all works.

This one record is about $400 and it's like, when you when you hear the vocals come through and the crispness of the guitar, it’s like John and Paul are right there in the living room with you. I mean, it's just, I've never heard anything that's crisp in my life. So if you ever see Mobile Fidelity Sound Lab, those records are really tough to find. They don’t make them like that anymore. They're all super expensive, but the quality is unreal, and you compare that to, Spotify and the compressed…you know, the highs are cut off and the lows are blown out, and everything's all tinny and, this is just such a beauty by comparison.

So, I only take that record out once every few months or whatever. I don't want to ruin it. But that's what I love about it. It makes when you listen to a record so much more meaningful and impactful. Because you can't just play at any time. You have to really care for it, place it on the, you know, turntable, and be careful, and it just makes you appreciate everything more. And, you would also never listen to just one track, with vinyl collecting, like, why? There's no way -  you just, you listen to the whole rack, or at least one side of it, every time, without question. Like, no one just listens to one track! 

So yeah, that's kind of my most valuable record, my favorite one. It's the best combination of quality enjoyment, which is a great metaphor for the Beatles, right? They're the best in the world at what they did, and they were the most popular. That’s so rare.

Gaz:

That was so awesome man, thank you for sharing. I'm loving this emphasis on collecting behaviour, seems like the perfect note to end on…

Stefan:

The thing I love about collecting records is that, from an investment standpoint, it’s bloody awesome. It’s basically the only collectible you can actually use, and it still goes up in value every year, like 5-6% per year.

Here's why. With most collectibles, you can't take them out of the package, right? You can't enjoy them. Like, if you have a Star Wars figurine, that has to stay pristine. It can't be messy. You cannot just take it out of the packaging, let alone play with it, right?

I don't like that. But here’s the thing, there is surprisingly very little demand for sealed vinyl. No one really cares if it’s sealed. What matters…what matters is the Grails. What matters is you have an original pressing of, you know, a Hendrix record in stereo, or you've got a, you know, an original pressing of the Led Zeppelin or the Doors or something like that. It doesn't have to be in shrink wrap. Nobody cares. They just want to listen. The shrink wrap situation is totally irrelevant…

*interview wraps up as Gaz and Stefan continue talking excitedly about record collecting*

Follow Stefan on LinkedIn, and message him (he reads everything): https://www.linkedin.com/in/stefanvonimhof/
Alts: https://alts.co/
ALTEA: https://alts.co/ALTEA/