HOW PRO ATHLETES ARE SCALING STARTUPS TO CHAMPIONSHIP LEVELS
Article by: Maria Natalia Rodgriguez // LinkedIn
Gone are the days of players just slapping their names on car dealerships and restaurant franchises. From the NBA to the NFL, the most seasoned, business-savvy players have recognized the value of equity over money. Increasingly, players are opting to invest or partner with startups in which they can get personally involved.
This shift has proven to be mutually beneficial. This new group of venture capitalists (VCs) are creating portfolios of investments that will generate returns long after they retire, and allow them to selectively work with companies that align with their missions. Besides their net worth, startups are finding great value in taking in athletes as part of their board of directors, advisors, or even co-founders by leveraging the player’s influence, brand legitimacy, knowledge, and connections.
LEGITIMACY
Partnering up with an athlete might be just the right move to help new or stagnant startups grow. When an athlete backs a company as an investor, partner, or advisor, it sends a strong message to customers that helps legitimize the athlete-company connection more than an endorsement deal.
When Stephen Curry, Golden State Warriors guard, decided to invest in Snap Travel, a Canadian travel startup, it helped bring positive attention and legitimacy to the company.
“If you’re an end-consumer about to spend $1,000 on a hotel booking, you might be a little hesitant about trusting a newer brand like ours,” said Hussein Fazal, CEO and co-founder of SnapTravel to Crunchbase News, “but if they go to our home page and see our investors, that holds some weight in the eyes of the public, and helps show we’re not a fly-by-night company.”
Having Curry on board helped the company grow outside of the travel industry and into the tours and events space, opening many new doors for them.
INFLUENCE
On and off the court, it's hard to overlook the value of the social media clout that having a premier athlete in your team can bring to the table. For most consumer companies, social media is the primary acquisition channel, and startups often spend a lot of time and money amassing the necessary amount of followers to influence their industry.
When you partner with an athlete, you get their recognizable name, brand, and audience distribution. An athlete's backing can lower the marketing costs for portfolio companies, and when founders weigh the strategic value of their potential investors, pro-athletes often have an advantage due to their large following of loyal fans and powerful influence.
“A founder might reach out to that athlete specifically and build a sports advisory board, or give them stock options that are directly tied to a certain amount of social media posts or wider PR”, says Paul Rabil to CNBC, professional lacrosse player and founder of Rabil Ventures. Athletes have strong communities that allow them to introduce a product to their fans in a genuine way."
EXPERTISE
Athletes are beginning to take more decision-making roles in the startups they choose to partner with and invest in. Oftentimes, athletes can bring the best team management principles to the table from their years on the field and their experiences through arduous recruitment processes.
San Francisco 49ers cornerback, Richard Sherman, joined Decibel, a VC firm backed by tech giant Cisco, as an investor and advisor. Sherman, who was recently bestowed with the title of “best cornerback of the decade” by Pro Football Focus, was brought in to utilize his experience on the field to advise founders on how to build championship-level teams and how to push the boundaries of conventional thinking in the tech industry.
One of his first tasks with the firm was to work with Blameless, a startup that develops AI-driven software that helps engineers find glitches in their applications. Sherman identified with the company’s mission and with the need to religiously study his own team and his opponents and introduced the company to the concept of “blameless postmortems” in sports. Sherman also utilizes his on-field experience to advise the board of Vicis, a helmet company that uses technology designed by a team of engineers and neurosurgeons to reduce head trauma in football.
UNPARALLELED NETWORKS
Players can also be valuable assets to any startup stalled by gatekeepers. Athletes are powerful people that can open a lot of doors. “They helped us make connections in music, fashion and all things tangential to sports,” said Zack Weiner, Co-Founder of Overtime, a digital media company backed by NBA stars Kevin Durant, Victors Oladipo, Carmelo Anthony, and Baron Davis, in an interview with Crunchbase News.
Basketball, in particular, has always been tied to celebrity culture. The high visibility of a courtside seat makes for one of the main perks for high-dollar ticket holders. Access to these networks has been essential to Overtime’s growth since the company expanded its programming into sports-adjacent lifestyle areas such as collectible sneakers and music.
Teams in close proximity to the Bay area are also deeply tied to the tech-startup and VC ecosystem of Silicon Valley. Tech A-listers frequent the courtside at the Golden Warriors games, and players have a direct line to well-connected entrepreneurs who can offer guidance and support. Players can act as a bridge between the two bubbles.
Golden State Warriors' Steph Curry has played a crucial role in connecting Slyce, a brand-ambassador tech startup he co-founded with former Nike executive Bryant Barr, with key clients such as UnderArmour, and now he is doing the same with their new branding and investment company SC30. Curry and Barr prioritize finding ways to give value to founders they invest in and build a community around the companies they choose to partner with.
Athletes are using their brands, knowledge, capital, and networks to advise and invest in exciting new ventures. Startups and technology innovators should view athletes as valuable partners to seek out as they scale their company to a championship level.