We Study Billionaires - The Investor’s Podcast Network - TIP403: Wine Investing Gets Better With Age w/ Anthony Zhang

Starting point is 00:00:00 You're listening to TIP. On today's episode, we have a very inspiring guest, and that is 26-year-old Anthony Jang. Anthony dropped out of college after being awarded the Teal Fellowship grant from Peter Teal to pursue his first business, Envoy Now, which ultimately sold four years later. He then went on to fund Know Your VC, a second venture that quickly sold, and now for his third act, he has founded Vino Vest, a platform for investing in wine. In this episode, we discuss why you should consider adding wine to your portfolio, the basics of wine itself, and what separates a fine wine from all the rest, learnings from Peter Thiel and Mark Cuban, how to build a portfolio of wine or simply invest in an index of wine, the biggest risks to the wine industry, how to impress your significant other next time you're at dinner

Starting point is 00:00:49 or the wine shop and a whole lot more. Anthony is clearly wise beyond his years and a lot of fun to speak to. I really enjoyed this energized and educational discussion on wine, and I know you'll find some takeaways from it too. So without further ado, please enjoy learning about wine with Anthony Jang. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Welcome to The Investors podcast. I'm your host, Trey Lockerbie, and today I am super excited to have with me CEO and founder of VinoVest, Anthony Jang. Welcome to the show, Anthony.

Starting point is 00:01:41 Thanks so much for having me on, Trey. I really appreciate it. So I don't know a whole lot about wine, and we're going to dig into that a lot, I think, on this episode and learn a little bit more along with everybody else. But when I was learning more about Vino Vest, what was the most interesting thing that was coming up for me was your background, because you're 26 years old. This is the third company you've started. And there's a lot to explore with that. So I'd like to start off by, well, for example, we study Peter Thiel on the show quite a bit, and you are the first Teal Fellow that I have met. So I'd love to hear a little bit about how that fellowship experience was for you.

Starting point is 00:02:18 Sure, Trey. So for those of you who are not familiar with the Teal Fellowship, it is a program where Peter Thiel gives students or prospective students $100,000 to essentially drop out of college, drop out of high school and pursue their business ideas. And the whole thesis behind it is that some great ideas just can't wait. And when I got accepted to the TEAL Fellowship program, I was running my business out of college. It was a food delivery app called Envoy Now. And I had always subscribed to the belief that to be able to start a business, which was always my end goal, you needed a four year degree at a great college. You needed some great work experience, maybe at a investment bank or a consulting company, and then you go back with that work experience

Starting point is 00:03:05 and you get your MBA, right, from a top program. And then after that, maybe you're ready to start that business. And having the experience of meeting a lot of other Teal fellows through the application process, a lot of the fellow prospective applicants and candidates and even talking to Peter Thiel himself really gave me that belief and confidence that I don't need to wait another eight, nine years maybe to start my business and realize my dream. I'm doing this right now, running a business out of college, and if someone like him could take a chance on me and give me both the confidence as well as the resources to be able to support myself, dropping out of school and pursuing my business,

Starting point is 00:03:45 that's not an opportunity I can pass up ever. So TIL Fellowship was extremely rewarding for me having that community of other college high school dropouts because, you know, when you're 18, 19 years old, your friends are everything, right? You're in the dorms. Social life is bigger than school life. And when I dropped out, that was one of the things I was really afraid of is that like, where is my community? Where is my tribe going to be? And thankfully, I was able to make some really amazing friends of other young, sharp founders who were building world-changing ideas and we were able to stick it through the thick and things of building a business together and building very different businesses as well.

Starting point is 00:04:25 Well, let's talk about Envoy now a little bit. It's a food delivery system, as you said, right? I believe it's sold fairly quickly after the founding and maybe after this grant. So for those who don't know about the grant, what does the money go towards? Because as you mentioned, $100,000, which might sound like a lot of money. And for an individual, yes, it is, but for a business, that's not that much money at all to kind of grow and scale in the grand scheme of things, maybe for a startup, but, you know, longer term. So what did that money go towards for you? How did it help you grow and grow? and ultimately sell the business? So for the $100,000 grant, I put it all into the business. Thankfully, right after I'd gotten the TEAL fellowship, I went out and fundraised. So we raised a million and a half dollars and I just put that 100K on top of that, right? It's a grant. I could technically do whatever I wanted with it, but the best use of money was to grow the business.

Starting point is 00:05:19 And for us, it was just expanding to more markets. We were college focused. So it was tier two, tier three cities where the big grub hubs and door dash of the world just didn't have scale. And we thought that by capturing these markets where there's a lot of density around college campuses, really cheap labor because all of our delivery people were students, and also that extra sort of X factor, which was the community. You had to have an EDU address to be able to even get service, even open up the app. And students who say were 6 p.m. they knew after classes, they're going to be. going to hit the library, but they wanted a Chipotle burrito beforehand, they knew that there

Starting point is 00:05:58 were a lot of other students that probably wanted that exact same thing. So by just swinging by Chipotle getting six burritos instead of one, you pretty much have your dinner covered for you. And it was just a really friendly and fun way for the community, be able to help each other out and get closer as well. So for us, that was really what the funding went into. And it was an amazing experience. As you mentioned, we sold the company about four years after founding to a a company called Joy Run, which is now owned by Walmart. Incredible. So obviously you went through that fundraising process and probably met some VCs,

Starting point is 00:06:31 which may be a good segue to your second venture, which was called Know Your VC. So I'm sure there's a story there. How did you come up with Know Your VC? What was the background there? Yeah, Tray. So Know Your VC is essentially a Yelp or a Glass Door for rating both venture capital firms, individual partners within those firms, as well as angel investors. I started this in 2017, which, if you can recall, in Hollywood, was when the whole Harvey Weinstein scandal was moving and really catching a lot of steam.

Starting point is 00:07:03 And in Silicon Valley, there was a very similar movement of a lot of brave women and minority entrepreneurs coming out into the spotlight and sharing some horrible stories about how these VCs had either sexually discriminated against them, racially harassed them. and it was just a lot of the same power dynamics that I saw in Hollywood. And for me, being in a very fortunate position to be backed by Peter Thiel, being male, I had a lot easier of a time fundraising than those minority in female founders, even though fundraising is already very difficult. So I just felt very strongly that there needed to be some more accountability and transparency on both sides of the table, not just everyone's kind of holding a lot of these investors to almost like a God status tier or literally hold the keys to your company's success or not

Starting point is 00:07:54 with that funding. I just thought there should be some more balance to the ecosystem. And given the social climate at the time, me and a few buddies, we hacked together this website over the course of two weekends. We launched it and it just caught on like wildfire. Within a few months, we had hundreds of thousands of unique searches on the platform, searching for different BCs. It wasn't just founders submitting reviews on BCs. It was was even VC submitting reviews on their peers, right? If you're all invested in a company together and you're sharing a board, that's some really valuable insight for other peers to be like, hey, should I co-invest with VCAA or VCB? And that was my second business. And it was really

Starting point is 00:08:34 not something that I ever imagined would blow up the way that it did. But I just felt so strongly that this needed to exist in the world that thankfully me and my co-founders, we were able to get it out at just the right time. Curious about your personal experience with VCs, what were some of the biggest learnings from actually taking money from the VC? You hear good and bad stories all the time. Was yours more favorable? Were there any big takeaways that you would advise, you know, upstart entrepreneurs today?

Starting point is 00:09:03 I would say I've been very fortunate to have some incredible investors, but probably the biggest surprise is that the brand name really does not matter as much as the person you're partnering with. You take a firm like Andresen Horowitz, right? It's one of the most famous VC funds in the country, probably in the world, but the person that you talk to, the person that you bring on your board is more important than the brand name, right? That's something that I didn't really realize.

Starting point is 00:09:32 And then when I was looking for VC's, I was like, I just want to top tier VC. That means I'll get the best help, I'll get the most attention. But you realize that, especially with a lot of these bigger funds, especially in a round or Series A round, even if they lead your entire round, they take the whole allocation that is such a small drop in the bucket for their entire fund size that it's hard for them to justify the resources and the time that they're putting into it when on the founder side, you're, you know, they're the only help that I have. And then when you compare it to maybe an angel investor or a smaller emerging fund manager, where they're just, I think, hungrier

Starting point is 00:10:10 or more generous with their time, some of the smallest angel investment checks, like people would put in 10K, 20K of their money really went to bat for me in the early days and really were people that I could lean on as a confidant, not just as an investor that, you know, of course they want me to make money so they can make money. It was just a lot closer than that. So that would really be my piece of advice for folks fundraising is that there's a lot of capital out there, but really focus on people who you think will actually spend that time with you because it's not always going to be sunny days and growth that's up into the

Starting point is 00:10:44 right. There's always going to be road bumps and you want folks that can actually help you who maybe have been there before in your shoes as a founder in the past who can then be able to help the problem solve instead of just be like, hey, you got a bad quarter, you know, ignore you or they're in radio silence, which can happen sometimes too. Now, what's the story with Mark Cuban? Was he an investor as well or was he just someone you met along the way? Oh, so So the Mark Cuban story, this was my sophomore year in college with Envoy Now. And I had not yet made the decision to drop out yet, although I was considering it. And he came to our school as a speaker. I idolized Mark Cuban. I thought he was so cool. So I actually skipped class to go and see his speech.

Starting point is 00:11:29 And I remember the funny thing was that I was in an entrepreneurship class. And the whole goal of that class that semester was for folks to launch their own business. And I remember, remember, in the syllabus, the professor said that if the class was able to cumulatively raise $50,000 in funding, then everyone would get automatic A's. So just kind of remember that as I dive into this story. Our professor had trouble with me skipping his class to go see Mark Cuban. He was like, you can see the recording online. You know, it's just a speech. If anybody skips this class to go see him, you can get doctor letter grade. So I took the hit anyway. So I was like, I need to go see him. I don't know.

Starting point is 00:12:09 know when I can ever do that again. And at the very end of his speech, is an executive producer of Shark Tank Mark Burnett was there. Our business school dean was there as well. And our dean was like, hey, Mark, everything's recorded already. Do you want to do an impromptu shark tank session? And we can pick some students in the crowd to pitch you. And Mark's like, sure, why not? Right. And I was just waving my hand like crazy. Like, it was about to fall off because I wanted so badly for the opportunity to pitch Mark Cuban. Thankfully, I was picked. I pitched him, and that was my first investment offer ever, a $100,000 offer from

Starting point is 00:12:45 Mark Cuban, Mark Burnett, for 10% of my business, which meant that somebody valued Envoy Now at a million dollars. And to the time, to the 19-year-old, that is like the biggest number I could even think of. And that was really a turning point in my life because just having someone that I looked up to so much, give me that confidence to be like, hey, your business is worth something. And not only do I think it's worth something, I'm willing to offer you an investment to have you really be able to take it all the way. And that was, I think, between Mark Cuban and Peter Thiel, I was like,

Starting point is 00:13:21 there's two billionaires offering me to that $200,000 to drop out of school and run my business. This is never going to happen again in my life. That's a pretty good sign that you're doing something right, I would say. Yeah. Oh, and just to just to wrap it up, because I got that 100K, everyone got automatic A's in that class. So getting docked a letter grade for skipping did not matter at all. Amazing. So, you know, those guys, the billionaires, you hear about stories, not quite like that, but, you know, them putting in $100,000 into a company and they do it quite a bit. So you're like, okay, how much FaceTime you're actually getting with these guys? And is there really any influence they can have on you at that scale? I'm curious, have you had any person? personal connection with either of them that made a really lasting impression on you? I'll be honest in saying that the time that I spent with them was very fleeting. Maybe, I would say, two to three in-person meetings, a lot more over email, especially Mark. He's

Starting point is 00:14:19 notoriously good at responding really quickly. And for me, it was really just having that sort of shift into feeling like I had the confidence and I could execute on this huge scale, because I don't think I ever saw that my ceiling could be that high. And coming from a background where no one in my company or in my family had ever started a company, my ceiling was like, just go to the best college ever and then go to a great investment bank and then try to make as much money as I can so I can save enough to start a business. I'd never really thought about the venture capital world where you're hearing about these hypergrowth companies. You're hearing about these billion dollar valuations and just really,

Starting point is 00:15:01 open my eyes to have them welcome me into their world, introduce me to people who had been there and done that, right? Like founders my age or even younger who have done incredible things. And I think just having those two folks be able to, I think, shine a light on that. And obviously being backed by them helped to open a ton of doors, that's really the biggest value that I've gotten out of being associated with them. Well, yeah, that belief in yourself is invaluable. So that's a huge takeaway. All right. So now we have Vino Vest, which is your third entrepreneurial venture.

Starting point is 00:15:37 I mean, you're 26. Not too many 26-year-olds are this interested in wine. So what got you interested in the wine market to begin with? Yeah, that's a question I get a lot. And I think to really take it back to the early days, I grew up abroad. I grew up in Beijing and Hong Kong for the most part. And wine was a huge deal there, right? It's a, especially wine from Bordeaux and Burgundy is a huge part of being culturally relevant or as a status symbol.

Starting point is 00:16:05 So I always knew that wine had value, especially really rare wine. But I never really thought of it as an investment until selling Envoy now. I went to my first financial advisor and they're like, hey, Anthony, you know, what do you want to do with the rest of your life? And I said, start companies. And they're like, all right, well, that seems risky. So let's put all of your money into really safe stuff. And I looked at the plan, I was like, I don't really want to do that. All of my friends are angel investing or they're into crypto and they're buying real estate.

Starting point is 00:16:34 And a lot of people that I really respected were getting more and more into investing in wine. And to me, it just had such a cool factor that the other asset classes didn't. The fact that you could drink it, could invest in it, you could sell it. It was just really aligned more with my identity than I thought it would. And I wanted to try my hand out at it. And when I attended or attempted to get into my first auction, I realized why wine collecting for most people is out of attainment, right? You need a ton of capital to even have a wine seller to hold your wine.

Starting point is 00:17:08 You need access to the best wine auctions, to the best wine reason. Usually those mailing lists or wait lists are even a decade long to even get on it. And then finally, the knowledge, right? There's a lot of information out there on tasting notes and wine and how it tastes, which critics like what, but there's really no stock analyst equivalent talking about, hey, you should buy this winery's wine because of reasons ABC that are more financially driven. And realizing that all of these pieces needed to be in place for even just someone like me who was just a retail investor who wanted to just put a couple thousand dollars into it and see how it

Starting point is 00:17:46 went, it just was very obvious to me that this needed improvement, this asset, class that's been around since even before our founding fathers has returned great appreciation and yield to investors all around the world, yet it's only available to less than 1% of people in the world. So with VinoVest, we really sought to democratize that process. First, just for me, just to figure it out with myself and have an easier way to invest in wine. And then I realized, after talking with friends and telling them how excited I was about investing in wine, a lot of them were like, hey, Anthony, why don't you manage?

Starting point is 00:18:22 some of my money too. And I'd love to be able to try my hand out of being a wine investor. It had that cool factor. And I realized that I could either just start a wine hedge fund or open up a platform so that anybody could learn and invest in wine with the technology and infrastructure that we built at VinoVest. And the latter was just a much more interesting opportunity that could affect hundreds of thousands, even millions, rather than just having a few large LPs and a fund. Let's take a quick break and hear from today's sponsors. All right, I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future.

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Starting point is 00:22:49 Go to Shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. Amazing. So for those listening right now who are saying, yeah, but I don't know anything about wine. Even if you do, and even if I'm giving this money to this platform, I know nothing about it. So I'd love to just take a little bit of a detour.

Starting point is 00:23:13 to talk about wine itself and specifically the characteristics that make up a quote unquote fine wine from anything else. Yeah, I think that's a great place to start because I was in the same boat five, six years ago. I didn't even know that you could invest in wine, much less what made wine investable versus the stuff at Trader Joe's, right? So to me, it's a few criteria. Number one, it's going to be longevity.

Starting point is 00:23:39 Most of the wine that's produced in the grocery aisles is actually meant. to be consumed within a couple years, but there are subset of wines that actually age and get better with time. And that's why you have that old adage, right? Ages like fine wine. As the aging process happens, there's inevitably going to be less supplied than it was on day one, right? Like say winery A, they make 10,000 bottles by year five, maybe there's only 5,000 just due to natural

Starting point is 00:24:06 global consumption. Maybe at year 10, when it's reaching its peak maturity, there's only 1,000 bottles. that supply and demand dynamic really plays into the price appreciation, and then you also have the appreciation of the wine that actually changes its flavor profile. And then I think the third factor is really based on brand equity, right? Why are people paying $2,000 for a Louis Vuitton bag that's made of the same leather material as another bag that may be from a cheaper retailer, right? There's that sort of brand value that is intangible that happens with a lot of luxury goods. and a lot of art or cars.

Starting point is 00:24:45 And that's really that third factor that we look for that is it sought after, right? Does it have more global demand than the winery can actually produce? And those are really the factors that drive fine wine versus regular wine. And where did these wines typically trade? Is there sort of a southerbees of sorts for wine? You mentioned these auctions. Where does that typically happen? Yeah, so southbees and Christie's are, I would say,

Starting point is 00:25:10 that some of the two biggest auction houses for wine. They sell everything, but wine is definitely a big part of their business. And the great thing about auctions is that they've been around for a long time. And it's a format that a lot of people are familiar with. I think the downside is that there's a lot of information asymmetry and the fees, right? You have to pay 25% on top of the strike price. And for someone who's looking at it as an investment, wiping out 25% gains is very significant and can't really recover from that even in a year or two. Another reason people might be looking to wine right now is that all other assets are pretty higher at all-time highs.

Starting point is 00:25:49 And as I understand it, wine is not very correlated with anything else. So it kind of makes it this alternative asset of sorts. Do you have any data around what wine is most correlated with? Yeah, so you're exactly right. And that wine has very little correlation to your global indices like the S&P, or the NASDAQ, what it is correlated most strongly with is actually emerging market growth. So if you think about wine and the high end sector of wine, it really is kind of that upper class that is consuming it, right?

Starting point is 00:26:21 They're taking the supply out of circulation, which then drives the market even more. So when you're looking at emerging market indices, you know, like developing countries like China or India, and see that upper class become even wealthier, that's been the strongest correlation point that we've seen to prices of fine wine. And if you look on a more micro level, you're seeing that certain regions are falling in favor or out of favor, which also leads to some pretty dramatic price increases in certain regions versus others. So, for example, we had tariffs in the US against most European wines until earlier this year. And that led to a 25% cut on all French wine, all Spanish wine, UK wine, German wine, but those tariffs actually excluded the country of

Starting point is 00:27:13 Italy and it excluded all sparkling wine imports, so champagne. And because of that, over the past two years, the region of champagne and Italy as a country have outperformed the global wine indices and they're returning 15 to 25 percent on average over the last five years. Amazing. That actually brings up another question about the geography of the best wine. in the world and you said it's changing, what are some of the impacts that are causing that change? If you think about your sort of blue chip wine regions, it is going to be what we call

Starting point is 00:27:48 the old world. So in Europe, regions like Burgundy and Bordeaux are the ones that Thomas Jefferson invested in, right? The Romans invested in and that was kind of your starting wine growing regions. But now it's become a much more diverse and global landscape where you're starting to see wines out of Napa, out of Oregon, out of maybe lesser known wine regions in Italy and France that are really coming up. And one of the big reasons other than just changing consumer preferences is also climate change. It really can't be ignored that. At the end of the day, this is an agricultural industry and there are some really real effects

Starting point is 00:28:27 that climate change has had on a lot of these blue chip regions. Number one is the higher volatility in temperatures, which, you know, they, you know, they, you unfortunately destroy a lot of the yield. If your yields are 20% down, you have to release your wine at a higher price. And then on the other side, for wine regions that maybe previously were a little bit too cold to produce great wine, so regions like maybe Oregon or northern parts of Germany, they're starting to come into the climate where they're producing some really incredible world-class wine.

Starting point is 00:29:01 So newer regions are starting to pop up and gain a lot of. consumption demand, which is then driving investment demand. You mentioned those auction houses. Do you have to be an accredited investor to even participate at those auctions? So thankfully, with auctions, technically anybody can participate, but there are minimum thresholds to be able to participate in some auctions versus the other, right? If the starting price of a case of wine has $100,000, most people are priced out of that auction, right, if they want to start with something smaller.

Starting point is 00:29:34 So I would say that's really the only requirement for wine, especially if you're just buying it direct, there's really no regulation around it. You just need to be drinking age so you can purchase alcohol. So you mentioned climate change. I imagine that's one of the biggest risks to the wine industry overall, but are you saying that it's generating some opportunity in other areas as well? Yeah, I think where one door closes and other opens, right? For a region like With Napa, you're seeing the average yield go down over the course of five, 10, 15 years. And what's special about this fine wine industry is that they can't really just shift their vineyard to another part, right?

Starting point is 00:30:16 Then Napa, the wine wouldn't be Napa. That's why only certain parts of the world have great wine. So they're doing a lot to be able to convert back to, say, more organic or sustainable practices to be able to get the most bang out of their buck, the most juice out of their grape, but when you look at the opportunity side, not only does that create lower supply for even greater demand, but it also forces price appreciation. And then when you're talking about those colder regions or climates that I mentioned, those are new sort of your, you know, say emerging market stocks, right?

Starting point is 00:30:52 Those are your maybe up-and-comers where they don't have that same brand value as Napa or a Bordeaux wine, but there's a lot of. certainly a lot more upside to grow. Now, I did go to Napa once, and when I was there, I learned a little bit about estate-grown grapes that produce wines. Not a lot of people may know this, but a lot of wines are just this amalgam of all kinds of grapes from all different estates that are kind of blended together, sometimes in a big factory that's not even on the maybe winery estate that you know and love.

Starting point is 00:31:25 I'm curious, does that add any value to the end product, or is it ultimately just the quality in the brand, as you mentioned before, like anything estate grown in a brand, does that make it more valuable? It absolutely does, because if you think about it, the estate grown wine is a very specific place, and the winemaker has a lot more control over that specific place, but that also means that they're limited, right? They only have this, say, five or ten acres to farm with. So even if their demand doubles the next year, they only have this five or ten acres to

Starting point is 00:31:56 farm with compared to bulk wine, right? If they usually, if there is more demand, they can just scale up and just grapes from other places that might not necessarily be from their main winery just to scale up and scale down demand. And because of that and because of the different grapes, they still know that the consumer wants a consistent flavor year and year out. And because of that, they add a bunch of stuff in it that is chemical that does kind of strip away from what makes a single vineyard or an estate grown wine a lot more unique. and it just kind of starts tasting a lot more homogenized. So that's really the biggest difference. And because of the extra labor that goes into a state grown wine where maybe grapes are handpicked instead of having a machine go through them, right?

Starting point is 00:32:41 Or they're buying really high quality grapes from, you know, mountain tops where the yield is just going to be a lot lower than if you're just buying it from, say, Fresno or like somewhere in the middle of California where it's just flat land, right? And they're just optimizing for production. All of that moves into the price, moves into the desirability, and also ultimately the taste for the consumer. Awesome. Let's talk a little bit about VinoVest.

Starting point is 00:33:06 What does the team at VinoVest look like? If I were to invest $1,000, is there some kind of Somalié on your team that's taking it to the market? Or how does it look? Yeah, that's a great question because I think with a concept this new, even though people may understand why you should invest in wine, you know, the fundamentals of the asset class, When you look at our platform, they have a ton of questions. Am I investing in wine?

Starting point is 00:33:29 I'm investing in a wine fund. And the short answer is that for a retail investor to come on board, we don't expect you to know anything about wine. What we do expect you to know is your expectations financially, right? Is this trade for you a five-year hold? Is it a 10-year hold somewhere in between? What is your asset allocation when it comes to your entire portfolio, right? Is this a 1% thing, a 10% thing for you?

Starting point is 00:33:53 And then also, what's your risk appetite? If you're only sitting on bonds and cash, you might want to get a little bit more aggressive with your wine portfolio strategy. But if you're, say, all in on crypto and startups, maybe you want something a little bit safer to counter that volatility. So once we narrow in on those parameters, we've actually built out an algorithm that can automatically be a robo advisor for each customer. So everyone gets their own portfolio.

Starting point is 00:34:18 Everyone gets their tailored strategy based on those factors of time horizon, investment amount, timing in the market, aggressiveness in terms of your risk appetite. And what we'll then do is we'll go source out all those wines from our connections, so winery partners, merchants, wine exchanges, and be able to store them next to strategically located professional wine storage facilities. So we got one in Napa, we've got one in Bordeaux, France. We've got several that are also located next to major wine trading hotspots like London, Hong Kong, Singapore. And our goal is to really take away all of the hassle, distress, the unknowns out of

Starting point is 00:34:56 investing in wine, like access, custody, storage, and give you a beautiful online experience just like if it were on Robin Hood or just like if it were on Coinbase. So you mentioned a fund of wine. So now I'm kind of wondering, am I pooling my money together with other people going in on very expensive bottles of wine, or does my $1,000 or so go to buying its own one bottle of wine? How does that typically look? We actually have both options. So for our retail investors, the option is for them to each own their own wine. So, Trey, if you wanted to, with your $1,000, you know you own these, say, 10-12 bottles, you could actually come to our warehouse and be like, hey, this is my locker.

Starting point is 00:35:38 If I, for any reason, wanted to drink it or visit it, you could do that. And it's not shared with anybody else, which gives the end user a lot more control on when they want out and when they want it, right? With our fund product, which is primarily catered toward RAs and family offices, they have more so of a set strategy, right? They're money managers. They're managing money on behalf of a lot of clients, and they want to get consistent exposure. So say, we put together a $10, $20 million fund for an RIA, that's going to look very different than if we're constructing a $5,000 portfolio for a retail investor. Interesting. What's the most expensive bottle of wine you've seen on the platform?

Starting point is 00:36:19 Cool. That's a fun one. We've had bottles of wines that are over $150,000 a bottle. These are going to be really high-end burgundy, so wines like DRC, which stands for Domain de la Romani Conti, and Domain Le Waugh. Those are two bottles of wine where when I started investing in wine, I was like, there is no way a bottle of wine could be worth 50K even. And every single year, those wines continue to appreciate and defy all expectations of just being more and more desirable because the yields. It's just so, like they have such a commitment to excellence and quality that if it does not pass their test, they're just going to make less. And especially with the sort of volatility of the climate in these past few years, they've

Starting point is 00:37:04 not compromised on their bar of excellence, but what they have done is just released less and less wine. Now, have you been tempted yourself to pop open a bottle of $150,000 wine or, you know, what's the best wine you've ever tasted? Yeah. Thankfully, I have got my drinking cellar here at home and then I've got my Vino bestseller far, far away in France. So the temptations are easier when it's out of sight, out of mind.

Starting point is 00:37:28 But I'd say for my favorite bottle that I've had recently, it was got to be, I got married a month ago. So we had a really special bottle of wine. It was a, thank you. It was a 1995 Dom Parignon Onotech, which means that they left the champagne in the wine caves of Don Parignon for an extended amount of time, and they only recently released it less than 10 years ago. So that means that the champagne has had more time to interact with the wine cave, with the yeast,

Starting point is 00:37:59 and be able to have a more complex set of flavors than a regular bottle of Dom even from the same year would be. So it's what we call an extended elvage. So it just stays in the seller for longer than than usual. Wow. So what does the mark to market kind of look like for wine? You mentioned the $150,000 bottle. Is that fluctuating daily, annually? How often are these prices getting updated? So that's what we're really passionate about, Vinovus is to be a market leader in providing data for the wine world. Because if you don't know how to value it properly, how can you treat it as an investment, right? And the wines that we deal with were gathering massive amounts of data points from all different sales channels, whether it be auction, whether

Starting point is 00:38:45 it be the primary market, whether it be wine exchanges happening, you know, both in Europe, in Asia and in the Americas, gathering all these data points, normalizing them, and showing our end customer what somebody paid for it most recently. So it could be last week, it could be, you know, last hour, the more so, I would say, liquid secondary market wines are being traded multiple times a day as well. Yeah, that was my next question was how liquid are these markets? What would you kind of compare it to? I would say it's very much so not like crypto or the stock market, maybe one day, but the cool

Starting point is 00:39:23 thing is that because it's not a regulated financial market, it is 24-7, it is global, so is wine. So when you're looking at the liquidity, especially as a lot of these wines get closer to, to their peak maturity period, so maybe it could be 10 years, could be 20 years in the future, we start to see a lot more activity when they reach their drinking window. So, for example, if you knew you wanted to hold this ball of wine for 10 years, everyone else is probably having the same view as you or they want to probably hold it for the first seven.

Starting point is 00:39:52 And then once you get to 8, you're 8, you're 9, a lot of people are looking to buy and sell an offload. So we do see different liquidity windows where some wines start to really pick up in liquidity they're traded multiple times a day. Other times they're not traded, you know, even for weeks at a time. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up and customers now expect proof of security just to do business. That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance, risk, and customer trust together on one AI powered platform. So whether you're prepping for a SOC2 or,

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Starting point is 00:43:22 Funds Perspectus at Fundrise.com slash income. This is a paid advertisement. All right, back to the show. And so going back to my portfolio, now we're talking about on Vino Vest, what does the fee structure typically look like on Vino Vest? Are you paying management fee on top of, you know, finding these wines and storing them, et cetera, or just an asset center management kind of fee? What does that look like? Yeah, so Vino Vest doesn't charge a carry. We lump all of our services under one management fee. So that includes your acquisition of the wines. It includes your storage insurance for the storage, which is really important because wine is one of those few asset classes where custody is one of the most important things for it to retain and increase in value. And for us, all of that ranges

Starting point is 00:44:12 from 2.85% all the way down into below 2% depending on the package that you choose with VinoVest, depending on how many assets you have on the platform turns your dollar value. Very cool. And so you mentioned sort of having a fund as well. Is there an index of sorts for wine? Do I want to, I only wanted to invest in the best burgundies from all over the world. Is there an index for that? What does that look like?

Starting point is 00:44:38 Yeah, I'm glad you mentioned that because there is built out an index called the Vinov S-100. So we track all the major regions as well as the major players within each region. And then to your point, we've also got sub-indices, right? So we've got the Burgundy 50 or the Bordeaux 50, where if folks wanted to dive in and develop a thesis around a certain region or a certain producer, we've got the tools for them to be able to have that analysis and be able to make those decisions as well if they wanted to. You mentioned generating a lot of data around the wine market. Is this secret sauce behind Vinovests?

Starting point is 00:45:13 Is it a whole other business stream to consider data on wine on top of the just management of people's portfolios? I really think that is our secret sauce because no matter how good our algorithm is, if you don't have the best data set, you know, it's useless, right? You need clean data, you need reliable data, and you need the most, I'd say, largest access to data in the world. So that's what VinoVest is today. We've spent a lot of time and resources in ensuring that we have sort of the best bird's

Starting point is 00:45:44 eye view of the market than anyone can have. And for us, we want to be able to leverage that into our technology, but we really do believe in increasing transparency in the secondary market. The thing I don't like about auctions is that it's very opaque, right? You have no idea who else is in the room. You have no idea what the past comps are. Sometimes the fee structure isn't really transparent. And I'm sure everyone's had a similar experience, maybe even at a restaurant.

Starting point is 00:46:12 They see the price of a wine on a wine list, and they go to a different restaurant in the same town, that bottle of wine could be a completely different price, you know, maybe 20, even 30% off. And I think with the data that VIN-O-Vest is bringing to light in the secondary market, it helps not only consumers have more trust in the market in general, but it also helps winemakers, right? They know their wine is going to increase in value in the future, but by when, right? By how much? Should they be holding back some of their inventory and release it on like a a 10-year anniversary or on a 20-year anniversary when they know they could probably make more money on the release rather than releasing it all on day one.

Starting point is 00:46:52 So we believe that data can really empower both sides of the industry to be able to have more transparency, more trust. And I think that also breeds greater participation, which is the whole mission of VinoVest. So what happens when I want to sell my bottle of wine? Do I have to wait for someone like me on the other side? Do I have to wait for a Sotheby's auction for it to sell? What are the typical constituents of exiting a deal, so to speak, on the wine side? Yeah, that's a great question.

Starting point is 00:47:21 So we have our own secondary trading platform where you can interact with thousands of other traders who are looking for that wine. So you can put it up on the platform. You'll be able to see all of your bids and offers just like a stock market would be, and you get matched up to the highest bidder. Very cool. Well, listen, this is so incredibly inspiring. This is your third company, and you've exited two already.

Starting point is 00:47:48 This is an awesome idea. But what I found most inspiring just when I was researching you is that you've actually persevered, not only through multiple companies, but through a significant personal challenge as well. So I'm wondering if you'd be open to perhaps sharing about an accident in your life and how it's impacted, because I think it could be really influential and inspiring to a lot of our listeners. Yeah, I'm happy to, Trey, and I think, how'd I say this? About five years ago, I had an accident. I

Starting point is 00:48:17 broke my neck diving into a pool. And what that did, in addition to just break my neck was, it rendered me a quadricollegic. I had a spinal cord injury on impact, and I was unable to move anything below my shoulders. I knew immediately something was wrong. What I didn't know was the extent of that injury. It's a permanent injury. I spent four months. months on a ventilator, learning how to breathe again before another almost a year in intensive inpatient rehab. I'm at a wonderful hospital called Craig Hospital in Denver. They're specialized for traumatic spinal cord injuries and brain injuries. And I learned how to live life again, just something as simple that you take for granted, like being able to breathe without the

Starting point is 00:49:02 assistance of the ventilator or developing the muscle function to be able to feed yourself with a fork and I'd have to be on an IV drip for months. That was the hardest thing I've ever had to go through. And even today, five and a half years later, I've been really fortunate to be able to regain some function. But I'm sitting here in a wheelchair. I still need a lot of help in my daily life to be able to work and be independent and still do the things that I love to do,

Starting point is 00:49:34 which is building businesses. But having that experience in my life, and I just remember having a statistic stuck in my head after I learned about my injury is that 80% of people who have a spinal foot injury never go back to the workforce again. And for me, I was like, holy, you know, I didn't want to be that 80%. I wanted to not only get a job, or now I guess I made my own job, but also give other people jobs, right? That's part of what I love about starting and building and scaling companies. And I hope that what I'm doing can inspire others, right, not just a spinal quino energy,

Starting point is 00:50:12 but any sort of life-changing event where a lot of people are just faced with a decision where it's like, hey, do you want to just roll over and give up and feel sorry for yourself, or do you want to push through? And really having that decision, I remember just, you know, I was staring at a ceiling in the ICU for weeks on end, just being like, When what's going to happen to my life again, can I ever go back to normal? Realize that like, hey, life moves on with or without you. And you can choose whether you want to still try to pursue your dreams and do the best that you can or if you want to just let fate happen to you.

Starting point is 00:50:50 And that's really the biggest lesson I learned through having a spinal cord injury. Unbelievable. Well, I am so incredibly impressed not only with your background, but just all you've persevered through and you obviously seem like a very optimistic, very focused entrepreneur, the kinds that you aspire to invest in, and knowing that about your background. I mean, it's just one of those things you'd never know, just having met you, but it's something that's incredibly profound and really just, I guess, inspiring. That's the best word I can think of it.

Starting point is 00:51:23 So thank you for sharing that, first and foremost. Before we kind of wrap things up here, I wanted to see if you had some resources that we could share with our audience on, you know, maybe that helped you get to where you are, especially caught up on the wine education you have, maybe the best books you've read about wine, and then maybe even the best books you've read about investing since you do a bit of that as well. Yeah, I'm more than happy to. I think the book that really got me into wine was called The Billioners Vine.

Starting point is 00:51:52 And if you haven't read the book, it's fascinating. It's a quick read and it's detailing a story of a bottle of wine that people believe to be from Thomas Jefferson Seller. It was going to go up an auction as one of the most expensive bottles of wine ever sold. And it was just whole kind of like a, you know, almost like a national treasure type, forensic hunt on determining the origin and authenticity of the bottle. I won't spoil it for people who do want to read it. but the mystery and intrigue just really drew me into the world of fine wine and got me into the

Starting point is 00:52:27 mindset of why old wine is that valuable. And I would say another bonus resource, if you're not a big reader, is going to be a movie called Sour Grapes. It's on Netflix, it's on most streaming platforms, and it details the chronicles of the largest wine fraud in history. This kind of mad, genius type slash con man person scammed some of the world's most influential and and wealthy people in the world out of nine figures worth of wine over the course of almost a decade. Today, this guy is still free in the world. So it's a really, really intriguing story as well on kind of that sort of high-end wine world. In terms of investing, I would say I read a really impactful book about a month ago called The 15 Commitments of Conscious Leadership.

Starting point is 00:53:20 It's more so investing in yourself, but I believe that that's the best way for you to gain clarity on what you want to invest in, right? Not just money, but your time. So that book has been really impactful for me and I often flip back to it in chapters and commitments that I can make to myself to be able to learn faster, be a better person, and be a better CEO to my company as well. And in turn, I believe that breeds better outcomes for our investors on VinoVest, who are trusting us investing in wine through our platform, but also our shareholders.

Starting point is 00:53:55 You know, we've raised venture capital funding for this company as well. And I have two different duties to serve them the best I can in addition to my duty to our employees. You know, when you mentioned the billionaire's vinegar, which I haven't read, but I'm going to down, what was coming to my mind was this joke I've heard about, you know, how do you become a millionaire. You start as a billionaire and then you open a winery. So it raises that question. Why are wineries, you know, stereotypically just known to be such a bad investment? I think that's a really funny point that you brought up because it really is, I think,

Starting point is 00:54:30 such a tough business. If you think about it, A, it's it's agricultural, right? So there's a lot of things that you're at the mercy of that you don't have control in. Number two, there's a very long cycle, right? You actually need to wait five to seven years after planting the grape so for it to actually mature and produce fruit. So there you're ready more than a decade in the whole, or more than half a decade in the whole. And then you need to find a winemaker to actually age the wine. Right. So that's another one to two years, which puts you at the seven to nine year mark. And then you have to find distribution and licenses. And especially in the United States, we're all familiar with how common-a-the-three-tier system is, where there's a different license

Starting point is 00:55:08 you kind of need in each state, those license alone can take up to a year, year and a half to obtain. So you're a decade in, you burn a ton of money, and you haven't even sold your first bottle of wine yet. And the average American is drinking $20 wine, right? It's really hard to break into that luxury segment of these crazy bottles that we've been talking about because it just takes time, right? And another thing is that wine takes time to age too.

Starting point is 00:55:33 So how do you even know as a new winery, if you can make a bottle of wine that can age 20 years, 30 years, and stand up to the grades. That's another thing that only mother nature and time can tell. So if you think about it, it's like the learning cycles are so long on an industry like wine, which is why a lot of people are attracted to it because of that sort of romanticism and traditionalism that a lot of winemakers still have to respect. All right. So tonight, when I go to the wine shop with my wife and I want to sound smart and look cool,

Starting point is 00:56:06 give me some tips. What are like a couple wines I should look out for, dollar price? That's, you know, that's a good deal, so to speak. Give me an idea. Is there anything that comes to mind, you know, one to three options or a different variety or something I should be out on the lookout for? Yeah, that's a great question. So I think now that we're on, around the holidays, right, a lot of us are thinking ahead to, you know, Christmas, New Year's, I think champagne is going to be one of your best bets. But champagne isn't cheap, right? It's expensive. for a reason and I think the main reason is that it's from champagne. However, you can have some pretty incredible sparkling wines that can't be called champagne because they're not produced there,

Starting point is 00:56:46 but are made in the same method or have the same level of care and detail. So a lot of the proscicos and covas, especially when they're made by, to your point, the estate, right? There's a lot of producers that just buy bulk grapes, but the ones that do grow their own grapes, ferment their own grapes, and sell them, those are the ones that have most control over the quality. So if you look for grower sparkling wines, your local wine stop, you know, Somalié or employee there could point you to some pretty special stuff that's usually undervalued. If you're looking ahead to something maybe a little bit bolder for the main course, I think there's a ton of value in Italian and Spanish Reds. You know, Napa Valley, great Napa Valley wines are incredible world class, but they could also

Starting point is 00:57:32 costs you easily into the hundreds of dollars. For the same level of quality, for the same level of attention to detail in history, a lot of the Italian Brunellos or Riojas from Spain, you can get for under 50 bucks and it is just every bit as good. It just hasn't had, I think, that same sort of reputation and name recognition as, you know, your Bordeaux or your Nappos or Burgundy's. A big trend I've been seeing lately is around natural wines and even like orange of wines, it's a little bit different, but are those the kind of wines you mentioned earlier that are supposed to be enjoyed sooner than later? So that's a great question and a very controversial one in the wine industry.

Starting point is 00:58:13 But I'll give you my take. We all want to be healthier, right? The natural movement has swept through everything from your food to now spirits and now wine. The reality is that most of investment quality wine is natural and has been natural since day one. So, you know, a domain delamero Moni Conti, the one that I mentioned earlier, that's $100,000 a bottle, they've been organic for decades. They've been sustainable and biodynamic for decades, but they just don't publicize them as being natural because for them, it's not a fat, it's not a trend.

Starting point is 00:58:48 It's a way of living. It's a way they believe will get the best results out of their vines, and that's why they do it. On the flip side, a lot of the newer, I think, trendier wine companies are doing it to catch a trend, right? And because there are very loose rules around what you can call natural and what you can not call natural, there's a lot of controversy in the winemaking community, right? Is it the fact that you are not using pesticides, you can be called natural? Or are you actually fully devoting yourself to being organic, right?

Starting point is 00:59:19 What is that sort of hard definition? And because there isn't one, or at least there's no guidance issued by the FDA or anything like that, there's been a lot of back and forth in the wine community. But I think at a high level, it's usually lower sugar, it's usually lower in additives, and it's made with more respect to the land where you can be able to use less water the next year round and be able to not have to put in a ton of pesticides for it to get to the right yields, right? I think moving back to that style of farming is better for all of us in general. Well, I have to agree. Well, Anthony, this has been incredibly fun, really entertaining and educational and inspiring.

Starting point is 01:00:00 And I've had a lot of fun. Before I let you go, I want to make sure I give you a handoff to, you know, for those who want to follow along with what you're doing with VinoVest, any other resources you want to share. Absolutely. I mean, first of all, thanks for giving me the time. I really enjoyed our conversation as well. And I think for me, I realize that most people listening are probably brand new to wind investing. And I want to be a direct resource for you. So Anthony at vinavest.co, I read every single email. So if you want to personally give me a shout out or ask me any question, I'll be there for you.

Starting point is 01:00:33 And on Twitter as well, I'm Anthony underscore J underscore Jang, which is my first middle last name. And I also respond to everything on Twitter. So I realize that wine can be very intimidating to most people and wine investing is a whole other dimension. And I want to be that resource that I wish I had starting out in this industry. really enjoyed it. Thanks again. Awesome. Thank you so much. All right, everybody, that's all we had for you this week.

Starting point is 01:00:59 If you're loving the show, please don't forget to follow us on your favorite podcast app. Check out all the amazing resources we have for you at the Investorspodcast.com. And if you want to get in touch, you can always reach me on Twitter at Trey Lockerby. And with that, we will see you again next time. Thank you for listening to TIP. Make sure to subscribe to Millennial Investing by the Investors Podcast Network and learn how to achieve financial independence. To access our show notes, transcripts or courses,

Starting point is 01:01:28 go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision consult a professional, this show is copyrighted by the Investors Podcast Network. Written permission must be granted before syndication or rebroadcasting.

We Study Billionaires - The Investor’s Podcast Network - TIP403: Wine Investing Gets Better With Age w/ Anthony Zhang

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