Adam Torres and Ian Ippolito discuss Private Investor Club.
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Show Notes:
Private Investor Club has an extensive due diligence library of over 1000+ sponsors and deals. In this episode, Adam Torres and Ian Ippolito, Founder & CEO at Private Investor Club, explore the evolution of Private Investor Club.
About Private Investor Club
The club is headed by Ian Ippolito, who founded the club in 2015.
As a former serial tech-entrepreneur, Ian wanted a conflict-of-interest-free place to find new investments, discuss their pros and cons, and negotiate better terms.
The club began as an organic offshoot of conversations with other investors from Ian’s other website: TheRealEstateCrowdfundingReview.com, which, within a couple of years, had grown very quickly. New members generally came in, and continue to enter, via word-of-mouth and referrals from existing members.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest on the show, just head on over to missionmatters. com and click on be our guest to apply. All right. So today’s guest is Ian Ippolito, and he is founder and CEO over at Private Investor Club.
Ian, welcome to the show. Thanks so much, Adam. Great to be here. So good topic today, man doing due diligence on private placement investments. So excited to get into that and to learn more about private investor club as well, but I guess just to get us kicked off founder of private investor club, , like, how’d you get the idea?
Where’d that start? Well what happened was I used to be a serial entrepreneur and I was in the, it used to be, you kicked the habit. Hold on. Wait a minute. That’s what my viewer or my listeners want to know. No, just go ahead. You. Well, you know what? It is a hard habit to kick, and I don’t know if it’s something that a true entrepreneur ever really kicks, because there’s always something in the back of your mind or there’s something that you want to do, or there’s a little project couldn’t help it go
But yeah, so basically, you know, I had a, a good exit, so, you know, I was able to sell my company. Mm-Hmm. . And now I was transitioning from being. you know, an entrepreneur to managing my money and, you know, managing my family’s money. And at the time there was a lot of advice on, like, well, you know, put this amount into stocks and put this amount into bonds.
And I didn’t feel comfortable, you know, with just going with that cookie cutter advice. And what happened was right at that time, this new thing was being started called real estate crowdfunding, which was the idea of you could, you know, it used to be if you wanted to buy real estate, you had to know somebody and he had a lot of money with crowdfunding.
The idea is, oh, well, now, you know, you can put in a small amount and then a whole bunch of people pull money into the deal. And you didn’t necessarily know the person to start with. So that was just starting to come out when I, you know, had retired and was, you know, starting this new thing. So I, I got into that just to invest my own money and kind of devoted all my time into that and did all this due diligence on a whole bunch of different platforms and The word kind of got around that, hey, Ian has done all this due diligence on all these platforms.
You should ask him for, you know, the stuff and I actually got a little bit annoyed because so many people were asking me about it. And 1 day, I just said, you know what? I’m just going to put it out on a website and then you can go on it. And I’ll just tell people you can go out there and get it. And so yeah, So I created this website.
It was called the real estate crowdfunding review, and it’s still out there today. And it just talks about, you know, experiences. Like I interviewed investors and you know, what went well, what went wrong. And so all that information is out there. And, but what I found was that, you know, and it’s great. And that’s why it’s still out there, but.
What was missing is like that’s on the public internet and a lot of things can only be discussed privately. You know, there’s, there’s nondisclosure agreements. And so in order to do that, I realized, you know what, I need to create like a private club where everything is protected by nondisclosure agreement.
, and then investors can really discuss, you know, deals, honestly, you know, and say the good ones and the bad ones without being worried, you know, about it and really talk about them. So, so that’s how it was started. that’s great and I love when somebody is you know, they, they have a problem or they have a challenge and they, they, for themselves, they’re trying to figure it out and then they end up, you know, figuring it out.
But the end result of figuring it out is really building a community. That’s amazing. Like that’s really what you did. You built a community. I know that’s the term we use nowadays, but how long has private investor club been around by the way? Like how long have you been working on it? Oh, it’s been around now probably like eight or nine years.
So, and it took a while to build that community at the beginning. It was very, very slow. Yeah. And looking at that back then, people weren’t, people weren’t thinking about community as much, I would say, eight years ago. Now we hear that term a lot, but I like that because that, that was more of the end result.
Probably in the beginning, you were just thinking about like, Hey, I want to get some other investors together and let’s mastermind or let’s figure this out. Right, exactly. It’s like, well, you know what? I know how to do this type. I know how to look at these deals, but I don’t know how to look at these, you know, maybe I don’t have self storage or I don’t know this.
And if I could get other people together, you know. Together, we’re a lot better. And yeah, that’s, that’s basically the idea. Phenomenal idea. so talk about the evolution? So you started obviously it started as you said a small group and then and then obviously it grew like Tell me about a little bit about the evolution So it started small and it took a while, you know took several years before it even got a decent size It was just word of mouth.
So People would say, because it’s private, you know, it kind of has to be that way. I would be worried if it was like, Oh, viral. It’d be like, okay, so you got a bunch of it’s quality, then people aren’t just sitting around like, Oh, what club can I join? Cause I have all this expertise that I want to lend.
Yes, that’s exactly right. That’s exactly right. So, you know, it took time. and the other thing was, I quickly learned it’s like, well, someone would apply and say, Hey, you know, I was referred by somebody. And then I had to figure out, well, how do I see if this person is allowed in or not? And you know, the concern was that there would be sponsors in there.
So people that have their own investments are either going to like tout their own stuff or they’re going to knock down their marketing channel for them instead of a real club. Yep, exactly. Exactly. So I had to spend a lot of time thinking about that. And I started off with myself evaluating every single person.
And as it, as it went on, and it grew bigger and bigger, that became all encompassing. Yeah. Yeah, exactly. You saw the problem right away because it was like, I was like, I didn’t have time to look at investments because I was like evaluating all these people coming in. So that was like the first thing where I was like, well, you know what, I need to get some help here.
So I got, you know, so now, now I have other people doing that for me. And then I can concentrate on the investments, which is the part that I enjoy. And so as this thing is gaining traction, what was the value of the club and the organization that you feel that was best addressing the needs of the community that was forming?
Like as you, cause I’m sure I’m just going to assume, and if I’m wrong, you tell me, but I’m going to assume that the original thesis evolved and it got bigger. Like the vision got bigger as you started getting more feedback from the community. Like, like talk to me about like the value that you, that you found that you could add and meet.
Yeah, yeah. So yeah, you’re right. Because, you know, it started just like I told you, which wasn’t really much and just like trying to solve that need for me. And it grew into basically 3 things. So 1, it became a place where it’s actually not easy to find good investments. It’s easy to find bad ones, you know, but it’s not easy to find people to take your money in and experiments on it.
Absolutely. I agree with that. Exactly. Exactly. It’s super easy. You know, it’s very easy to invest that way. But if you’re you know, if you’re looking for a conservative investment, you know, with a sponsor, it’s established, you know, all that sort of stuff. It’s very difficult to find. So the, the main thing for the club that, that I get out of it is the fact that, wow, you know, instead of me just looking for these deals, now there’s 6, 000 people looking for these deals.
And so whenever someone finds one, they bring them to the club and go, Hey, look, I found this. And then that comes to the second thing, which the club does really well, which is, you know, maybe they bring something that, you know, I don’t know anything about. It’s you know, at the beginning, litigation, finance, or real estate, or private equity, or venture capital, whatever it is, and they post it out there.
And a lot of times, even the person that brings it says, well, I don’t really know about this. What do you guys think about it? And then together, I mean, honestly, people just hammer on it and they say, well, what about this? And that doesn’t look good. And this looks suspicious. And, you know, so people just really, they do a lot of due diligence on the deals to try hammer them and try to make, hopefully make them break so that they can pass on to the next one.
But. If not, you know, some of these survive this process and, you know, people then invest. And the other thing that the club does is that, you know, as an individual investor, I’m not bringing a lot of money to these sponsors, you know, I’m not gonna get any special treatment, but when there’s a whole bunch of people, all of a sudden, you know, they can bring together a significant amount to a sponsor where they might say, Hey, You know, we’ll, we’ll give you guys a discount if you bring in this amount of money and where individually we can’t get it, but together we can.
So we end up getting better terms. Talk, talk to me about the due diligence side of things and the library you’ve created. Like, how did all that develop? Okay, so basically what happened was started, like, I described it to, you know, it was just like, yeah, someone mentions the deal and you kind of build it up.
But, you know, And then, and I guess I should add to that, you know, every investor is different and I really see it in the club because everyone comes from a different, you know, everyone’s got different risk tolerance. Everybody’s got a different financial situation and they’ve got different financial goals.
So something that’s like, right for me. Can be 100 percent wrong for someone else. And so you know, it really brought out for me in the club that, wow, there’s such a wide spectrum. And, you know, something that there’s no 1 answer that, oh, this is a great investment. There’s no such thing. It’s like, it’s just going to be a good investment for a particular person.
So what the club does is it just kind of, it doesn’t go. Oh, well, you should invest in this. You know, it’s not making any, you know, It’s not, you know, people are making their own decisions, but what it is, it’s a place where people can ask questions and they all get cataloged there. So it’s very easy to see a summary of, well, okay, you know, this particular deal, you know, if it’s a real estate deal, well, they have the leverage is 65%, which is a conservative amount of leverage, you know, Oh, they’re putting a lot of their own skin in the game.
They’re co investing, you know, 10%, which is a large amount. So you can see all these different things. And then. It’s a great starting point for the individual investor to go, Hmm, you know, what’s my, what, what do I want to look for? And then try to figure that out for themselves. So you, you categorize this, right?
So there’s an entire library for people that have access to the platform that they get access to. Am I off on that? Well, you could call it a library. It’s basically like an interactive forum where this stuff kind of builds up. Yeah. So it’s like builds up. Yeah. Over time. So, and then as new people have experiences, they, they write about it.
So it’s like, it’s a living, you could call it a living library, I guess. I understand. I understand. No, that, that’s great. and if you think about like did you say over 6, 000 members? Whoa. Yeah. Yeah. Over 6, 000 now. Wow. that’s interesting. That’s time flies, right? You’re like, how’d all these people get here?
Right? I know. Really? Oh, that’s interesting. So what do you look for? Like what typically makes a good member would you say? Yeah. Well, you know, the number one thing, because, you know, lot of people start off, you know, they may not have a lot of knowledge in a lot of these areas, but main thing, honestly, is a lack of a conflict of interest.
The biggest 1st thing, because it’s almost so many people come in and really, they kind of have a. A little agenda and you know, the agenda is, Hey, I’m selling this and you know, I’ll pretend I’m an investor, but you know, I want to actually pitch this or, you know, I want to the bad mouth, my competitors or whatever it is.
So that’s really biggest and most important thing. Number one thing, we spent a lot of time looking for that. It takes a lot of work actually to figure that out. But once that’s the case, then, you know, a person who, like I mentioned to you, We really believe in the club. I believe it. And I hope it passes down to all the members that like, there’s no one group, like perfect answer and everything.
There’s no one. This is a great investment. There’s a horrible investment. So if a person comes in and, you know, we can tell sometimes they’re not a fit if they’re like, oh, well, this investment was awesome for me. And anyone that doesn’t, it doesn’t think it’s great. You know, they start insulting them and things like that.
there are a lot of investments clubs are like that, and they get very. You know, when people get very aggressive, tone of the club is very courteous, very professional, and always, it has to be that the type of. Thought process that you know what my particular situation might not be the same for everyone else that helps us all get along better, too what are some of the areas that you’re looking for in terms of like that that the club covers It’s not it’s probably pretty broad, but just can give us some examples.
You said real estate. That was one of course Yeah, real estate is one. So anything that’s not public market. So these are all what they call alternative investments So yeah, real estate is one some of them are called uncorrelated assets, which means that, you know, they’re not directly associated with the business cycle.
Like you know, when the stock market goes down, these are not necessarily going to go down. So they’re kind of they’re they’re not connected. So there’s things like litigation finance, which is where you basically are financing or not paying an expert to do it, but. This company is financing law firm to take on a law case, and if they win, they get the proceeds.
So, you know, whether you win or lose, it has nothing to do with the economy, it has nothing to do with, you know, these things, so it’s not correlated. So, there’s litigation finance, there’s things like music royalties, there’s things like life settlements, there’s these things called GP stakes funds, where you’re basically buying, The business of being a fund manager from some other fund.
So there’s all sorts of things. There’s private equity where you’re buying. when you buy public stock, you know, you’re kind of, you’re kind of buying it to trade with, with a, with a private equity company. Usually you’re getting in there. You’re trying to improve it usually and then trying to sell it.
this was private equity. And then there’s venture capital where, you know, And this is one of the riskiest types of investments, but it’s startups. So, you know, most startups do fail, but it’s, it’s buying into, into startups. And you know, occasionally one of you, you’re hoping for the next Facebook or whatever, those are very rare, but so all sorts of investments.
Wow, Ian, I’m just thinking about your experience doing this since, I think you said 2015 or it’s been a while, like eight years or so. So I’m like, man, at this point in the game, I’m not saying individual investment, but I mean like type of investment, geez, you’ve probably seen them all. Like you just said, so many fun.
And I don’t know if when the last time I even heard that term was, I might have read it in something I don’t know how long ago. I haven’t heard anybody say that and it’s probably been a decade. I don’t even know. . And you’re saying it like it’s a common investment that everybody, I’m like, geez, you’re lexicon, or like, does anything surprise you in terms of type of fund?
This is an unfair question, but this is just my curiosity. I can’t help it. Sure, sure. You do. You think you’ve probably seen every structure at this point? That’s packaged. I mean, that’s not public. That’s not packaged in a certain way. I don’t mean like a creative deal. Like, that could be, right. But like, I mean, like that’s packaged and has any kind of scale.
You’ve probably seen it all by now. I’ve seen it a lot. I don’t want to say I’ve seen it all because it’s all the time. People will bring something new. It’s like, wow, that’s really cool. You know, I hadn’t thought of that before. Even now to this day, I’m just curious, not this week or today, but I, you know what I mean?
Like even now, like at least monthly, you’re getting surprised. Like, huh. Yes. Yes. It’s like, Oh, I’ve never thought of that. Or there’s a really good new twist that they’re supposedly doing. I want to learn more to see if, you know, I really feel comfortable with that or not. Yeah. Even after I asked you that, by the way, the reason I asked you that, by the way, it’s just because this is, this is a place for it’s interesting about this club is that it’s obviously you mentioned before, not everybody’s experienced, but those that are experienced also like get value out of this as well, which is super interesting.
Yeah. Yeah. Yes, exactly. No one knows it all. You’re still being surprised and you’ve been doing this, like living this for years and going back to like approving the applications way back when it’s true. It’s true. And that’s after looking at, you know, thousands of deals, you know, a year. So, yeah. That’s fun.
What’s interesting to you right now? And I don’t mean an individual investment. I’m not asking you to endorse anything or anything like that. I just mean like, yeah, you don’t have to, I’m not putting you on the hook for that. But like, what’s interesting, like what’s come across your desk lately and maybe deal structure or type or just things you’re seeing in the market right now.
And for context, for everybody that’s listening. We’re not giving any investment advice today, but it’s April 18th, 2024. Just so you know, just in case you’re listening to this in two years and you’re like, that’s not interesting. All right. I did the practice for you. So you didn’t have to do it yet. Now, now, now you can just answer the question.
What’s interesting right now. Great. Thank you. I appreciate that. You’re welcome. So a lot of people right now are moving away from, well, okay. So, so real estate in certain sectors have had a little bit of a downturn. So. For example, like office, real estate, yes, it’s hurting because of the post COVID and what’s going to happen now in this world.
So that’s hurting. You’ve got self storage, which was once a very, very good asset class for recessions. But this recent, you know, recently has not been doing so great. So there’s stress there. And there’s some of these very aggressively. Structured multifamily deals. So apartments, which is also one of those popular things, but you know, those are also seeing stress.
So, so people are moving away from those right now, or they’re saying that, Hey, you know, I already have enough invested in that. Let’s see how those deals come through and looking a lot for non correlated assets. So it’s like, you know what’s going to happen with interest rates? Who knows? are they actually going to go down?
Everyone hopes they are, but we don’t know. So, you know, what’s an investment that could do well, you know, regardless of what happens. And that’s what I’m seeing a lot of people interested in and myself too. And so I mentioned GP States. So this is, this is a really interesting investment. So it’s, it’s investing in Another fund manager.
So fund manager could be a hedge fund manager, or they could be any of these things that I mentioned, like private equity or venture capital or real estate or any of those, but by buying, there’s a difference between investing with someone and buying their business, because if you invest with them, like, like if you’re investing in the office, that that investment’s going down right now, but if you invest in the manager of an office that you fund, they still get a management fee no matter what.
So, you know, regardless of how it’s performing. So there’s components of it that are just very steady. And so, so I am right now, I’m really, really liking these sponsors that are offering these GP stakes funds. and I mean, just an example. So if you look at like, let’s just say, I don’t know, it could be any funds.
Let’s just say it’s a real estate fund. Right. And let’s say that manager is actually, you know, not rigid and obviously they’re prospectus and all things they have to do allow for, you know, investments in different areas. Let’s just, let’s just qualify it by saying that not blaming any manager.
If you’re, if you have an all office fund and you’re, I mean, I don’t, I don’t think anybody’s like expecting you to have worked a miracle depending on where you were at. Right. But let’s just say using that same example, there’s a manager that a prospectus and they’re, and they’re able to Move between office and other areas, maybe retail is doing better or something else.
So now if you’re buying a piece of this stake fund, then what you’re doing is maybe that person’s really good at marketing, maybe they’re good at reading. Maybe they’ve navigated other markets well, and they see this and this thesis you agree with. So even though the real estate market may be moving, and if you still wanted that exposure by investing in that, you might, you know, have a, disproportionately larger return than doing something else.
It’s based on the management team. So it’s almost like buying a business, right? Am I off on any of that? Anything I said? No, no. It is absolutely like buying a business. It’s like becoming a co owner of the business basically. And yeah, there’s a lot of, you can look at it as like, you know, I, I like this manager and maybe what they’re doing now is out of favor, but so I think I can get it at a good price where like, if everything was like roaring and doing great, I think I would pay a lot more.
So my, my people might consider that an opportunity. Yeah, that’s interesting. Well, Ian, we’re about out of time for this episode, but this was a lot of fun, man. If I could just be a fly on your wall to hear all these deals. Oh, wait a minute. People can be a fly on your wall. How? By joining. That’s how. That’s right.
Private Investor Club or applying to join. Excuse me. How do, how do people get more information, Ian? How do they continue the conversation? So just go to www dot private investor club dot com. They can apply there. Like I said, now, if someone is a sponsor, they actually can apply there too, because we have this thing called the marketplace, so they wouldn’t be allowed into the club as an investor.
But if someone wants to just put their things in front of other people, and it’s a free thing too. so we accept both types, but just as far as someone becoming an investor in the club, they would have to be not associated with a, with an investment fund. Amazing. And for everybody listening, just so you know, we’ll put the link to the privateinvestorclub.
com on in the show notes. So you can just click on the link and head right on over. And speaking of the audience. If this is your first time with Mission Matters or engaged in an episode this is a daily show. Each and every day we’re bringing you new topics, new content, new founders, new stories, new ideas.
If that sounds interesting to you, hey, hit that subscribe button. We have many more, many more interesting individuals coming up on the line and we don’t want you to miss a thing. And Ian Thank you so much, Kyle. We got to finally do this. I know we’ve been crossing paths, but good to have you on here, man.
And wishing you much more continued success with private investor club. So thank you. Thank you so much, Adam. Great to be here.
