The State of Athlete Investing
Exploring the new dynamic of athlete venture funds, athlete syndicates, and athletes as angels.
As some of you knowโฆ
My entrance into content started around showcasing savvy athletes as businessmen and investors.
But the state of play in 2021, is far different than it is today.
There are some trends taking place worth digging deeper into.
Letโs Dive In ๐
Funds Around Athletes
Over the years, weโve seen syndicates bring together multiple athletes to a deal.
The thing isโฆ
Syndicates arenโt that lucrative for the people doing most of the work (which can be a lot to organize):
a small fee for bringing everyone together
% of the profit if the company has an exit
This dynamic has pushed the people organizing syndicates into a new model which I call โAthlete Venture Fundsโ.
So whatโs going onโฆ
Venture funds are being raised (mostly outside of the US) around athletes.
While the websites of these funds showcase athletes and their PR announcements talk about the players involved โ keep in mind they rely far more on institutional money than the actual athletes.
Iโm curious to see how these funds utilize athletes at scale for portfolio companies.
What You Need To Know
The value of athletes continues to increase day-by-day (and increasingly on the business side of the equation).
20 years ago, athletes were assets on the field and โdumb jocksโ in business.
Today, athletes are assets on the field and even greater assets in business (eyeballs, influence, networks).
Itโs important thatโฆ
๐
๐จ๐ฎ๐ง๐๐๐ซ๐ฌ ๐ฎ๐ง๐๐๐ซ๐ฌ๐ญ๐๐ง๐ ๐ญ๐ก๐ ๐๐ข๐๐๐๐ซ๐๐ง๐๐ ๐๐๐ญ๐ฐ๐๐๐ง:
โข athletes that are part of a fund
โข athletes together in a syndicate
โข athletes with their own venture fund
โข athletes as individual angel investors
๐ฌ๐๐๐๐๐๐๐ ๐๐๐ ๐๐๐๐:
โข athlete-led funds (The Players Fund, APEX Capital)
โข athlete syndicates (Sequel, The Players'โ Impact)
โข athletes w/ own fund (35V, Serena Ventures, RX3 Growth Partners)
โข athletes as angel investors (Mario Gรถtze, Kelvin Beachum Jr.)
They all have their pros and cons โ along with distinct differences including industries they look at, stage of investment, and ๐ฎ๐ฐ๐ด๐ต ๐ช๐ฎ๐ฑ๐ฐ๐ณ๐ต๐ข๐ฏ๐ต๐ญ๐บ the level of involvement of the athletes.
For example, an athlete as an angel investor can be named in press releases and will be extra incentivized to open up their resources to make sure the company succeeds.
Athletes as part of a syndicate or fund shouldnโt really be named in press releases and weโll see what level of involvement they end up having (still a new concept).
One thing Iโm seeing in the marketโฆ
An Unbalanced Market
Like any market, supply and demand are everything.
Right now โ there is a massive supply of โathlete investorsโ and โathlete funds/syndicatesโ but potentially a decreasing amount of demand for the value they can bring to startups.
To me, this is going to make athletes more valuable individually as investors than together as a group.
This is why sometimes I laugh when I seeโฆ
โLebron James invests in _____โ and see in that same article that โthis investment was made through LRMR Venturesโ.
It wasnโt Lebron investing as an angel, but his team/venture arm doing a deal and then the PR people trying to finesse the headline. Lebron may not even know about the deal and will have limited/if any involvement in helping it succeed.
On top of all thisโฆ
Some of these athletes with their own firms now have loads of investments. How much value are they truly adding?
They canโt do social posts for every company or set up intros to their network with every founder โ so how much do you value the 48-hour PR push and how good is the team around these athletes?
The best athlete investors are the ones who are extremely picky and follow a niche.
Pau Gasol comes to mind as he has a small team around him and they focus on:
Late stage sports
Spanish entrepreneurs
Health, wellness, fitness
He showcases this beautifully on his website:
Itโs clear what heโs passionate about, invests in, what stage, and how he will add value.
Where Is This Headed
The athlete investing space is evolving and weโre entering territory never seen before.
As I said, anytime youโre dealing with an entity you should bucket it:
athletes that are part of a fund
athletes together in a syndicate
athletes with their own venture fund
athletes as individual angel investors
All of them are completely different! Itโs important to understand the dynamics so youโre aligned.
Iโm rooting for many of these athlete-related investing entities to win โ and am curious to see how they operate.
Podcast ๐
Todayโs guest is Soma Somasegar, Owner Seattle Orcas & Seattle Sounders.
Venture capitalist & 30-year Microsoft tech executive Soma Somesegar has entered the sports industry through ownership.
Youโll enjoy this episode as we discuss:
Journey to pro-team ownership
State of cricket in North America
Sports franchises as an investment
Check out the podcast episode here.
๐๐ต'๐ด ๐ด๐ฐ ๐ค๐ฐ๐ฐ๐ญ ๐ต๐ฐ ๐ฎ๐ฆ ๐ฉ๐ฐ๐ธ ๐๐ฐ๐ฎ๐ข ๐จ๐ณ๐ฆ๐ธ ๐ถ๐ฑ ๐ฑ๐ญ๐ข๐บ๐ช๐ฏ๐จ ๐ค๐ณ๐ช๐ค๐ฌ๐ฆ๐ต ๐ช๐ฏ ๐๐ฏ๐ฅ๐ช๐ข ๐ข๐ฏ๐ฅ ๐ฏ๐ฐ๐ธ ๐ฉ๐ข๐ด ๐ต๐ฉ๐ฆ ๐ข๐ฃ๐ช๐ญ๐ช๐ต๐บ ๐ต๐ฐ ๐ฃ๐ณ๐ช๐ฏ๐จ ๐ต๐ฉ๐ฆ ๐ด๐ฑ๐ฐ๐ณ๐ต ๐ต๐ฐ ๐๐ฎ๐ฆ๐ณ๐ช๐ค๐ข ๐ต๐ฉ๐ณ๐ฐ๐ถ๐จ๐ฉ ๐ฐ๐ธ๐ฏ๐ฆ๐ณ๐ด๐ฉ๐ช๐ฑ. ๐๐ธ๐ฆ๐ด๐ฐ๐ฎ๐ฆ ๐ค๐ฐ๐ฏ๐ท๐ฐ.
Thanks for reading today!
Peace,
AP