Joint Venture FAQs

Hi everyone,

Now that our joint-venture opportunity has been live for a couple of weeks, we’ve had plenty of time to gather lots of questions.

I love getting questions and feedback (even negative) as it gives me a chance to better explain, or even improve the offering.

So keep them coming, feel free to ask any question, and throw some solicited feedback my way.

Question 1 - How Much Has Been Raised So Far?

We’re at just under a million dollars confirmed, and another couple hundred thousand reserved, so that is very encouraging. We have enough to close on the first 2 acquisitions and will proceed as soon as we can.

The total raise is $2.5M and we do expect that target to be oversubscribed in the next couple of weeks.

Question 2 - Does It Matter When I Invest?

Whether you’re the first dollar in or the last dollar in, you’ll still be diversified across the whole portfolio. You won’t just be an owner of the first business we buy if you invest now, for example.

That said, there are a few large groups planning to invest so the remaining amount may go quicker than you expect.

Question 3 - What’s The Relationship Between The SPV and ONFO?

There’s no real underlying connection. Obviously the SPV relies on our expertise, our deal flow, and we are co-investing, but the SPV is designed so that investors get exposure to our expertise and deal flow, without being exposed to our corporate overheads.

This is why the expected returns are so good, as it’s a lean operation for investors.

You may remember that six months ago we raised money via Preferred Shares.

Those ARE connected to the main company, and many people weren’t keen on that, and wanted more upside.

So, the SPV is an iteration that takes care of that concern, while offering more upside. Win win.

The health and performance of the ONFO common stock isn’t related to the SPV though. You’ll be an owner in a small portfolio of online businesses, managed by a professional team.

Question 4 - How Do You Define An Agency?

We actually show examples of the types of business we are going to buy on this page: onfospv.com, but the short answer is they are marketing agencies, designed to help small businesses with some or multiple elements of their marketing.

Our most recent acquisition RevenueZen is one example.

Important note - the businesses we acquire are already profitable. We’re not making angel investments.

Question 5 - Do You Replace The Management When You Acquire A Business?

Ideally the management and owners will stay, or at least retain some equity and be incentivised to help us grow. That’s the case with 75% of the businesses in our pipeline, which is great.

One of the biggest issues with online business acquisitions is what happens when the founder leaves, and we’ve worked hard to build a compelling offer that incentives people to stick around.

Question 6 - Is This A Cashflow Play Only? Will There Be Capital Gains?

It’s definitely going to generate cashflow, but there will probably be capital gains too.

If you’d invested in RevenueZen for example, you’d be enjoying cash on cash returns in the 25-30% range already, but would also be looking at a business that’s on target to 2x by the end of the year.

That won’t happen every time, but across the whole portfolio we expect there to be gains.

Question 7 - Where Do You Get The Expected Returns Data From?

The businesses in our pipeline are being sold for around 3x Net Income. If we maintain that income level post acquisition, the cash on cash returns would be 33%.

It doesn’t always work exactly that way, sometimes there’s a decline before they rise again, sometimes they rise immediately, sometimes they stay flat, but based on our track record with the previous agencies we bought, we’re confident in the returns we’re projecting.

Question 8 - How Quickly Will You Deploy All The Capital?

Sicne we already have the businesses in our list that we want to buy, it is just a function of how quickly we raise and how long it takes to complete the due diligence and paperwork.

My best guess would be to be fully deployed and up and running by summer 2024.

Question 9 - When Do The Dividends Start?

Most likely at the end of Q3 2024, so 3-4 months from now. They’ll flow consistently every quarter from there.

Question 10 - Can International Investors Join?

Yes, most countries are available. Go to onfospv.com and click “invest now” to onboard to our platform.

It will automatically redirect you to the right portal for your country.

Question 11 - Can I Book A Call With You?

Yes! Just hit reply to this email and we can go from there.