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Good morning! It's Tuesday, January 16th. Today we’re covering Vinovest, an alternative investing platform that lets users easily diversify into fine wine!

THE FEATURE

The Entrepreneur Managing $100M in Fine Wine Assets

The average investor doesn’t consider adding fine wine to their portfolio, a strategy long seen as isolated to wine snobs and the uberwealthy. 

Anthony Zhang is changing that with his fine wine investing platform Vinovest, which has over $100M in assets under management!

Founder Story

Zhang started his entrepreneurial journey in college with his first company, EnvoyNow, a food delivery service tailored to students’ needs. 

EnvoyNow’s big break came in 2015 when Zhang skipped class to see Mark Cuban and Mark Burnett speak at his campus. Zhang was lucky enough to be selected from the crowd to deliver an impromptu pitch to Cuban and Burnett, which ultimately secured him a $100K investment from Burnett for a 5% stake in EnvoyNow. 

Not long after, Zhang was recruited by the Thiel Fellowship, a program started by billionaire Peter Theil that gives young entrepreneurs $100K to fuel their startups with just one condition: they drop out of college.

But then, tragedy struck. In 2016, Zhang became paralyzed from the neck down following a swimming pool accident. Despite the life-changing event, Zhang returned to Envoy and grew the company until he sold it to JoyRun for an undisclosed amount in 2017.

The same year, Zhang started his second business, Know Your VC, a company that compiled background information on venture capital firms to protect and educate new startup founders. 

Finally, Zhang created Vinovest in 2019, a company that’s kept his long-term interest as he seeks to dominate the fine wine market. Vinovest is now home to over 150K investors and 650K wine bottles managed. 

So, What’s the Business?

Vinovest is a fintech company in the alternative investments space, allowing users to invest in fine wine online without a personal wine cellar or insider knowledge. 

To maximize returns and make investing easy for newcomers, Vinovest doesn’t allow users to make specific asset selections. Instead, they offer three portfolio options created by their master sommeliers and a proprietary algorithm that evaluates a wine’s investment worthiness: 

• Short-Term (Aggressive): focuses on wines that mature in 5-7 years

• Medium-Term (Moderate): balances risk and reward with wines that mature within 7-10 years

• Long-Term (Conservative): optimizes for maximum portfolio diversity over a 10+ year period

Vinovest users completely own the wine they invest in, meaning they can sell or even drink it anytime they want— but few do. The Vinovest platform, with its proprietary data analytics, notifies investors when their wines peak and will receive a maximum return. 

The business model for Vinovest primarily relies on management fees, which differ depending on account size and tier designation: 

• Starter: $1,000+ account balance and 2.5% annual fee

• Plus: $10,000+ account balance and 2.35% annual fee

• Premium: $50,000+ account balance and 2.15% annual fee

• Grand Cru: $250,000+ account balance and 1.9% annual fee

How They Win: Offering a Non-Correlated Asset

2023 was a rough year for the fine wine market. The Liv-ex Wine 1000 index, the broadest measure of the fine wine market, dropped by 13.7%! Vinovest performed better but still saw a 9.1% loss. 

Compared to the S&P 500’s massive 24% return last year, it’s easy to write fine wine off as a bad investment. But, looking back one more year to 2022, we can see the benefits of this alternative investment— its price movement is independent of the general stock market (“non-correlated”).

In 2022, the S&P 500 saw an 18% downturn, while the Liv-ex Fine Wine 1000 index saw a 13% return. 

This doesn’t mean fine wine and the stock market have an inverse relationship. Instead, it shows that the two are non-correlated and have independent price movements. So, alternative asset classes, like fine wine, are legitimately viable for investors who don’t want to put all their eggs into one basket. 

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