Weekly Roundup: Business of Athletes, Sports, & NIL (December 4-10)
Ray Lewis, Serena Williams, and Jeter make business moves, the NBA takes a backseat to NCAAM, and the differences between VC and PE.
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0:00 - Feel good stories
Dick’s Sporting Goods $150M in donations, Manny Pacquiao donated 100% of fight proceeds to charity, and the Boston Celtics gifting $155,000.
1:50 - Business of Athletes
Nike is cutting ties with Kyrie Irving, he reportedly earned $8-12 million/year with the contract.
Ray Lewis, Emmanuel Acho, Baron Davis, and other athletes have invested in the $15M Series B round of MOON ULTRA, a consumer electronics company.
MLB teams have spent over $1 billion in player contracts so far this offseason.
Sue Bird and Megan Rapinoe revealed “A Touch More”, the company will create scripted and unscripted programming.
Derek Jeter’s online card trading company, Arena Club, has raised $10M in Series A funding.
Serena Williams has launched Will Perform, a topical wellness company for athletes.
6:10 - Name, Image, and Likeness
Opendorse, announced that it closed a $20 million fundraising round, including an investment from former NFL player Will Compton.
Texas A&M’s esports team recently revealed the school is negotiating with College Station to lease a new facility at Post Oak Mall.
On3, a college sports media company, announced the launch of the On3 Athlete Network where athletes can now sign into their profiles.
Prospex, an NFT trading platform for athletes and fans in NIL is now live in the market.
10:00 - Future of Sports
Fanatics announced that it raised $700 million at a $31 billion valuation.
GameOn Technology, a conversational chat platform, closed a $35 million Series B funding round.
Zenkai Sports, a natural and sustainable performance apparel brand, closed a $1M funding round to fuel growth and product development.
KissCam, LLC received a U.S. patent for its “KissCam® Contest,” revolutionizing the traditional kiss cam live segment at sports games.
This is wild:
The COVID year, transfer portal, and NIL created a strange gap between college and pro sports.
Short Passage of The Week
5 unforgettable truths from 2022:
It’s okay to take your time.
Be intentional and stay present.
Stop keeping tabs on people you’re trying to heal and move on from.
The only thing in this life you have control over is where you put your attention.
If you are torn between two options, choose the one that holds the greatest chance of bringing you long-term inner peace.
Source: Yung Pueblo, Poet, Meditator, and Speaker
Leila Hormozi runs a reported $200M portfolio of businesses.
She posted a snapshot of her daily schedule:
For reference, this was Ben Franklin’s reported daily schedule from the book “Think and Grow Rich”.
What’s your schedule look like?
NIL is transforming sports right before our eyes.
Players who would typically leave for the NBA, are now staying in college and making more money.
Private Equity (PE) and Venture Capital (VC) are often used synonymously, but there are many differences that you should know about.
Both invest in private companies whose shares are not publicly traded on exchanges, however, VCs generally invest earlier in a company's lifecycle than PE.
To go one level deeper, we can categorize private market investors by stage:
1) Angel: Individuals
2) Seed: 1st institutional check
3) Growth: Series A - C
4) Late Stage or Crossover: C through IPO
5) Buyout: Majority control, Debt
Note: There IS an OVERLAP
Let's dig into each 👇
Angels give support to start-ups at the initial moments, when most institutional investors are not prepared to back them.
They may be families, friends, or former colleagues of the founders.
They usually invest when a company is trying to go from PowerPoint to reality.
• Check Size: $10K to $250K
• Holding Period: 8 to 10 years
• Target Return: >75% IRR or +10x
Seed-stage investors are the first institutional check into a company.
Capital is typically used for market research, product development, and business expansion.
At this stage, the first full-time sales and marketing people are usually hired.
• Check Size: $250K to $2M
• Holding Period: 6 to 8 years
• Target Return: >60% IRR or +10x
Growth investors typically participate in Series A, B, and C rounds.
They pour fuel on the fire once product-market fit is established.
This is when a company is scaling for exponential growth.
• Check Size: $10M to $50M
• Holding Period: 5 to 7 years
• Target Return: >40% IRR or +7x
4/ Late Stage or Cross Over
Companies look to show efficient growth, marching towards a sustainable long-term financial profile.
Proceeds may be used to go from single to multi-product and expand sales internationally.
Investors often build starter positions to go bigger at IPO.
• Check Size: $50M - $150M
• Holding Period: <5 years
• Target Return: 25 to 35% IRR or +5x
This is when you buy the entire thing, usually using debt, to make it more efficient and can flip it later.
Flavors include LBOs (leveraged buyouts), take privates, rollups, platforms, and holding companies.
Free cash flow is usually needed to pay down debt, which is prevalent.
• Check Size: depends on strategy, could be hundreds of thousands to billions
• Holding Period: 3 to 5 years
• Target Return: >18% IRR or +3x
That's a wrap on Venture Capital (VC) vs Private Equity (PE).
Passage by CJ Gustafson, CFO PartsTech
“You can’t cheat the grind. It knows how much you have invested, it won’t give you anything you haven’t worked for” - Eric Thomas
Thanks for tuning in today!
I listen to Joe Rogan and My First Million all the time.
It’s cool to be included in a list alongside them by professional soccer player Matt Smith.