Players Fund: The Rise and Rise of Athlete Investors 💸
Players Fund: The Rise and Rise of Athlete Investors 💸
In a world of individuals, athletes are recognising the power of equity over endorsement and looking to expand their horizons to find more ways to get involved in investment and entrepreneurship...
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BIG IDEA
In October of 2020, Patrick Mahomes and Rory McIlroy were among a group of athlete ambassadors reported to take equity in Whoop when the company raised $100 million at a valuation of $1.2 billion.
Less than a year later, the fitness tracker had raised another $200 million at a valuation which would have trebled their investment.
For Will Ahmed, the company’s co-founder and CEO, he believes there is a strong incentive, from a product development and pure marketing perspective, in letting these stars invest and having them authentically involved in the company’s growth.
“As a storytelling entity, I think that leagues and teams are overrated in comparison to the individual athlete, because the individual athlete, although a superstar, is still a human that you can relate to,” he told SportsPro in an interview last November.
This mindset is not unique. It largely coincides with the democratisation of media, which has given individuals, including athletes, more power than ever before to connect with an audience, an important factor in the value creation of many athlete-led investments.
The trend shows no sign of slowing down, either.
You only need to look at the number of individual or creator-led brands appearing, from MrBeast’s Feastables and KSI and Logan Paul’s PRIME, to Conor McGregor’s Proper Twelve Whiskey and Jake Paul’s micro-betting platform Betr.
“Capturing attention will only get more valuable in the coming years and if you can hold an audience, community's attention, you will win big because the individual [to] community connection is everything,”explained Alexis Ohanian, Founder of 776 Partners, via a post on his LinkedIn.
As a result, you’re likely to see more and more athletes willing, and wanting, to take minor equity in established brands and startups, too – be it Whoop, Blaze Pizza, or even a sports team, like we’ve seen with Tom Brady at Birmingham City or JJ Watt at Burnley FC.
Ultimately, athletes (or content creators) can help to shape the narrative, to drive increased media and commercial interest, and to share their insights and expertise in product development, quite often tangibly driving up the value. In exchange, they can benefit from the remuneration that accompanies the growth that they have fuelled - a reward which is likely to be far greater than what they could command from a standard endorsement deal.
Laird Hamilton, an American big wave surfer and the founder of Laird Superfood, came out with a good quote on the My First Million podcast, explaining that, “In your evolution as an athlete, you evolve into wanting to be your own sponsor.”
Ultimately, this mindset shift to go beyond endorsement into ownership means that athletes today are more curious than ever to learn about investing and entrepreneurship.
While you will get some athletes starting their own companies, typically, over the years, this involvement has come from investing either as angels or as part of a syndicate into specific, ad-hoc deals.
However, there is obviously only a limited number of deals that any one individual can make, limited by the capital (and time) that they have to invest, and the size and access of their networks.
So, as this recognition of the value of ownership versus endorsement grows among the athlete community, it will create demand for more opportunities and more formal structures to be introduced – as seen with the launch of The Players Fund last week.
The athlete-led fund, which includes the likes of England Cricket captain Ben Stokes, AS Roma’s Chris Smalling, and Bayern Munich’s Serge Gnabry, is set to invest £40 million into Seed to Series A stage companies working across human performance, media, digital communities, and smart commerce, and aims to empower the athlete community as investors.
The first-of-its-kind fund brings together these athletes alongside seasoned VCs, leveraging their combined expertise, global access to opportunities and value creation ability, to support entrepreneurs and accelerate the future of athlete investing.
“By combining our resources, networks, and experience, we can achieve so much more collectively than as individuals,” added Stokes. “The Players Fund provides a structured way for athletes to confidently step into early stage investing and to do so alongside teammates and fellow athletes."
While we will continue to see athletes and creators launch their own brands, angel invest, and invest via collectives, the launch of this athlete-led fund is telling: It is another step in levelling up the opportunities for athletes and entrepreneurs to access one another and exchange value at an entirely new scale.
In a world centred on individualism, this launch is a signal that the whole can still be greater than the sum of its parts – a phenomenon that athletes know better than almost anyone.
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