We Interviewed Nick About Vint Journey To 6-Figures In Revenue

Vint

Skyrocketed from ZERO to $438K ARR in 7 Months

Industry: Wine Investing

Vint Case Study Proof

Full Interview Transcription

John:
This Artifact was commissioned by WeAdvertiseYourBusiness.com to tell the stories of their client's journey towards seven figures in revenue. Hi, I'm John from Artifact and in this episode I spoke with Nick King CEO and co-founder of Vint. He told me about how his company is democratizing wine investing, why wine is such a great asset to invest in, their major upcoming launch and much more. Enjoy.

Nick:
Hi, I'm Nick King co-founder and CEO of Vint.

John:
Awesome. So tell me about Vint. What's the backstory, what problem is Vint trying to solve?

Nick:
So, two years ago I got very interested in alternative assets. I looked at wine and what stood out to me about wine, looking at it through the lens of an investor was strong returns, low volatility, low correlation to traditional financial assets in a very inefficient market. And when I say inefficient, I'm talking economic inefficiencies. So if you look at the stock market, the price of an Apple stock will be within a fraction of a penny. When you look at the wine market, pricing spreads are very wide. However, in this really interesting market, there's a lot of exclusivity, the barriers to entry are high, a lot of information assymetry. So it's tough for everyone to participate in the market. So my co-founder Patrick and I explored business models and we wanted to open this market to the broader population. So the business is what is called a Reg A+ platform. So we are SEC regulated and what this regulation allows us to do is acquire collections of wine, list them on the platform, and offer fractional shares in the offerings. So pending SEC qualification, our first offering is a $46,000 California collection, 1000 shares, $46 a share. So you think about the problems of lack of transparency, high initial investments, and inefficient invest structures. Vint removes all of those. The process is fully transparent, it's very easy, anyone with $46 can invest.


John:
That's really interesting. What was your backstory with wine before this? Was this something that you had a passion for, or was it just that exploration of alternate assets that got you interested in this sector?


Nick:
Yeah, my background is in the investment industry so what stood out to me about the wine market was looking at it purely through the lens of an investor. And what I tell people is if I was incredibly passionate about the underlying wines, that would cause a lot of bias in the picking of the wines for different collections. So we have experts, we have masters of wine, we have certified som's, we have an individual who ran a $30 million wine investment company, and those are the people that I work with to help source. But my, I don't want to say lack of passion, but the fact that I didn't have these biases before launching, I think helps to create a better investment offering.


John:
You sort of touched on it in your overview, but tell me a little bit more about what makes wine such an interesting investment, is there a lot of investment going on in wine or is that another thing that you guys are exploiting? What makes it so attractive for you as something to invest in?


Nick:
Yeah. So first, on the sourcing side, because the market is inefficient, we think we can find undervalued wines relatively easily. We take a two pronged approach to source wine using data and also fundamental analysis. So if you can create alpha or return on the sourcing side, we try and do that. And then if you think about the long term hold nature of wine, this is a long term investment, three to seven years, maybe longer than that. You let the econ 101 supply and demand dynamics take place. So people drink wine, supply goes down, as wine ages, quality improves, also scarcity comes into play. So you have increasing supply with increasing demand. Theoretically, the price should always go up as per microeconomics.


Nick:
And then third, making an interesting investment our catalysts. So some things that we look at are upgrade cycles, change of ownership in vineyards, in various catalysts that can lead to appreciation, and then looking at the broader market, how much is being invested into wine right now? It's a good question. The market is opaque, so it's tough to give an exact answer, but the fine wine market has been valued anywhere from $5 to $10 billion. Right now, most platforms or firms are targeted at higher net worth individuals, so we're targeting the 99% who can't afford a $25,000 initial investment, and those who want to take control of their own portfolio, be transparent offerings, and invest through Vint.


John:
Yeah, that's awesome. So you mentioned a little bit about the supply. How do you guys select your wines? What goes into that side of your company?


Nick:
So on the supply side of the business, we take a very holistic approach. So I look at the wine market and I'm looking at it purely from an investment lens. I'm looking for undervalued wines, I'm looking, where can we get the best pricing, but we combo that with a team of experts. So we have two of the 57 masters of wine in the United States on our investment committee. We have the other individual who ran a wine investment fund and a certified som on the team. So we combine my investment knowledge with their fundamental analysis of the underlying wines to source them, and sourcing from credible suppliers is one of the most important things in the business. And we only work with highly qualified merchants or exchanges who have hundreds of millions of dollars worth of fine wine in their network. So provenance is absolutely key and that's the chain of command of the wine. So it's gone from winemaker to merchant, to exchange. We make sure through our various suppliers that that is concrete and clear.


John:
Interesting. So what else so far in the company has been big milestones or accomplishments for you guys?


Nick:
There's a few, one is going through the SEC process, just taking the time, allocating the capital, and executing through that process. That's been about eight months in the works. The second is, the product is fully developed. Because these are registered securities, there's a lot that goes on in the back end of our product, so my co-founder and CTO, Patrick has fully developed that product. We're somewhere between an MVP and a decent product, but it is ready for launch. Third is we're growing the team. As I had mentioned, I want to surround myself with experts in the subject matter. So we have an advisory board of five individuals, two masters of wine, wine investment manager, and an individual on the marketing side, and lastly, an importer with also so financial services background. And one area that we focused on is building out the supply side. So if you think about the business of the marketplace, the supply side are the offerings, wine and whatever else we may expand into, then you have a product in the middle, and then you have the demand side, retail investors, other types of investors. Our supply side and access to fine wine is over a billion dollars now. So we can really scale quickly once we launch and we raised and closed a pre-seed round, which was oversubscribed.


John:
Nice, yeah. So tell me about this big upcoming milestone with your first collection. Tell me a little bit more, sort of expand. You've mentioned it at the beginning, but expand on what this collection is, what the wait list was like, what has gone into this for you guys.


Nick:
Yeah. Collection number one is the California collection. It's a $46,000 offering, 1000 shares all priced at $46 a share. The underlying wines are Screaming Eagle, the 2010, 2015 and 2016 vintage Harlan Estate, The Maiden and Opus One, the Opus and Harlan are both 2017 vintages. So what has gone into this? There's quite a bit that went into the sourcing. We sourced direct from winery, we sourced through a wholesaler, we had to set up our storage facility, our storage facility is Domaine Wine Storage in Washington, DC. They store tens of millions of dollars worth of wine, they ensure it for us as well, and a lot of legwork that we want to handle so that our investors don't have to do it themselves. We want to make it as easy as possible. When you think about the underlying collection, we have this thesis, basically there are three key points.


Nick:
California wines have been gaining in global prominence over the last 10 years. So 10 years ago, California wines represented less than 1% of the fine wine market. Now that market share is over eight and a half percent. We expect this trend of globalization of us wines to continue and demand should rise for these wines like Screaming Eagle, Harlan, and Opus. Secondly, all of our Screaming Eagle wines are 100 point scored by Robert Parker. Robert Parker is the most famous wine critic. And when you look at some of the older Screaming Eagle 100 point scores, those wines are priced anywhere from 15% to 80% above what our vintages were acquired for, so we think there's relative value in that opportunity. And then lastly, with Screaming Eagle, there's a 10 plus year wait list, there's less than 800 cases produced in some of their vintages, and this scarcity and shortage of supply drives consistent long term appreciation. And we want to provide our customers, investors with our thought process behind why we are acquiring these wines.


John:
Yeah, that's really interesting. I imagine that just getting here was a big deal for you guys. Does this feel like a big milestone for you guys?


Nick:
Kind of. Once we launch and sell out the first offering, I think we'll take maybe an hour and be like, this was nice. We can celebrate a little bit. But for me, it's onto the next one, and onto the one after that. I'm trying to take it one collection at a time while also thinking big picture. So yes, it'll be exciting when we sell out this first offering because it's been and over a year and a half in the works, but it'll be onto the next one, focus on the Laurent Ponsot, the Super Tuscan, our upcoming offerings, because selling out one offering, that's great, but we're trying to really grow quickly.


John:
So what does a company built around wine open when they have a big monumental occasion for their company? What are you guys going to crack open for the first collection?


Nick:
Yeah, this is a secret plan. For each collection, we'll have a bottle of champagne, print out the California collection, stick that on the bottle and we'll open that every single collection we sell out.


John:
Nice. That's a good little tradition to get started. So tell me about what Paul has done for you guys, company, why you guys brought him in, and how he helped your business.


Nick:
So before we were working with Paul, all of our growth had been organic, just word of mouth. It was growing at a steady, relatively slow rate month over month. When we started working with Paul about a year ago, we wanted to start testing out scalable customer acquisition growth strategies. So we had asked one of our advisors if he had anyone in mind in terms of an agency, he connected us with Paul. Our first goal with Paul was to improve our SEO, and I'll caveat this, that I am no customer acquisition experts, but basically we're not ranking on any pages in Google yet, so we're working with Paul to create optimized content that we will put on the site so that we can rank higher. That takes time, three to six months, maybe more, but it lays the groundwork for organic search acquisition, which is always cheaper than having to pay Google to acquire customers. Secondly, Paul's working on search engine marketing for us. So right now the strategy is to use keywords as opposed to social advertising, because one, we'll be able to build out an audience that we can replicate on social and reach them through keyword targeting. And second is you're going to get higher quality users from people who are Googling how to invest in wine and they see a Vint ad and they click on that. So those are the two areas that we're working with Paul.


John:
Nice. What sort of progress have you guys seen? Are you starting to see that groundwork laid so far or seeing the plans and knowing they will come to fruition? Have you guys seen any first steps along the way that you're happy with?


Nick:
Absolutely. So we started the SEO content a few weeks ago. We launched three blog posts and a press release. So I don't know the exact number of back links that are now linking to vint.co, but I would imagine it's in the hundreds now. So on the most recent report we saw, we are now ranking for wine investing in the 20 range or so, compared to not ranking at all. So it's small, it's a small win right now, but you need those small wins and they start compounding, and they start turning into, into bigger moves. And then on the paid marketing side, we've seen tremendous growth in our customer acquisition. So pre Paul and just organic growth, we were growing around 10% month over month in terms of weightless users. Now with paid acquisition were growing 25% plus, 25% plus this month.


John:
Oh, that's awesome. So what are your guys goals looking out to the future? What's your sales goals 12 months from now? What collections are you guys lining up over the next 12 months? What's to come for Vint?


Nick:
So I think of the next nine to 12 months in three periods. So right now we are in the launch phase and focused just on the California collection, but then right after we have four more collections that we've lined up. We have a Laurent Ponsot collection. For anyone who has watched Sour Grapes, he's the French individual who helped crack the Rudy case. That's a really interesting catalyst collection where we have access to his quote unquote rookie card vintage at his new wine brand. We think we might be the only people in the U.S. with those wines. We have a Super Tuscan collection lined up, which tells a really interesting story of Italian wines who went against the grain to come up with a better wine making process. We think that that story runs exactly parallel to the story of Ben who's going against the grain of traditional wine investing and offering a better product and experience. And then we have a few more for the next few months. So this period of post-launch is prepping us to fundraise this summer.


Nick:
The plan is to go out and raise. We haven't decided yet, but somewhere between $1 to $3 million in terms of seed fundraising. Once we get that, it's all growth. We've locked down access to the supply side, we have set up interesting financing mechanisms for the supply side. Our product's developed, so that capital is going to be used to scale the team and grow our user base. In addition to that, we want to test out alternative offering styles. So looking at whiskey, we have individuals in our network who raised whiskey funds to invest in casks, another individual who has a database of whiskey bottle pricing. So we think that could be a very interesting next vertical to scale into.


John:
Yeah, that's interesting. I was going to ask if you guys were planning to head into different assets. Okay, cool. Well then let's wrap up with a direct address to the listener. Think about whoever's listening to this, whether that's somebody who wants to invest or whether that's a customer, or I don't know. Anybody who is listening to this and hearing about your business, what would be your closing message, telling them about Vint?

Nick:
Vint is the future of wine investing. Our mission is to make the wine market investable in the most efficient way. We will do this by increasing transparency, promoting diversification, removing barriers to entry, and putting the choice in the hands of our users. We will democratize this great asset class.