#3: Sports and Venture Capital
Despite market volatility and a pandemic, sport remains resilient.
Gone are the days of men in suits dominating the venture capital industry.
An influx of “non-traditional” backers has shifted the VC landscape, creating competition with historical investors: banks, insurance companies, pension funds, and large corporations.
Amongst these new investors are famous actors/actresses, musicians, and even social media influencers. The likes of Ashton Kutcher (Sound Ventures) and Chainsmokers DJ Alex Pall (Mantis VC) are leveraging their platforms to seek out solutions in tech and AI.
Similarly, athletes are using their multi-million dollar salaries to write checks.
Today’s athletes have technology at their fingertips, creating a global fanbase that transcends sports. For as many fans as he reached throughout his career, imagine if Michael Jordan had social media…
Armed with capital, millions of followers, and unique expertise, athletes are becoming serial investors and entrepreneurs:
In May 2022, Naomi Osaka started Evolve, the first female-athlete-led sports agency.
Kevin Durant founded 35 Ventures, gaining equity in Postmates, Therabody, Acorns, Coinbase, and others.
The NFL Players Association hosts an annual pitch day for startups with female and minority founders.
Earlier this year, the Atlanta Hawks launched Hawk Ventures, boasting a $50m fund aimed at minority-led and customer-experience businesses.
Rory McIlroy’s VC firm Symphony Ventures has invested in 10+ companies including Future, LetsGetChecked, and Kaia Health.
Many players, teams, and leagues have invested in industries such as healthcare and technology, but much of their capital is being deployed back into the arena they know best: sports.
And for good reason…
Sports betting, an almost $4.5b industry, will continue to grow as legislation loosens at the state level.
Broadcasting rights for professional sports are now worth billions with the NFL’s media deals leading the way at $110b.
From in-game analytics to human performance to fan and stadium engagement, tech is changing the way we play and consume sports.
Institutional investors are entering the world of sport: TXV — a human-performance-themed investment firm — just announced their new $500m “Evolution” fund targeting sports teams and late-stage tech startups.
Institutional business leaders haven’t had much stake in sports until very recently, so they would be wise to partner with current and former athletes who bring relevant skills needed to build in the world of startups and venture capital.
Take tennis, for example.
A recent article in the Financial Times explores the parallels between being a highly-ranked tennis player and being a successful investor. The best tennis players in the world are able to take on just enough risk in their shots to maximize the amount of winners they hit against the number of errors they make. According to Howard Marks, author of Mastering the Market Cycle: Getting the Odds on Your Side, the same is true in investing.
“When you aspire to returns well above those available on investment-grade bonds, it’s not enough to avoid losers; you actually have to find (or create) winners from time to time”
You don’t have to look far to see that these concepts are not just true in theory.
Serena Williams, certainly the greatest female tennis player to ever live, has won 23 singles and 14 doubles Grand Slam titles over her illustrious career. With a patented serve and powerful groundstrokes, Serena modeled her game using principles of risk tolerance, always looking to win on her terms.
Mirroring her on-court success, Serena’s VC fund Serena Ventures has invested in over 50 companies since 2014.
The latest American tennis player to enter VC is former world no. 35 CiCi Bellis. At just 24 years old, CiCi is trading in her rackets for checkbooks with the launch of her new investment firm Cartan Capital. Backed by a team of professionals spanning finance, media, and healthcare, Cartan Capital is eyeing sports and health tech as promising industries for disruption.
To learn more, listen to this week’s podcast episode with CiCi Bellis, Managing Partner at Cartan Capital.
Great read!