The athlete venture capitalist – the rise of athlete investors in sport

Published 25 January 2019 By: Mike Herbert, Jon Walters

Businessman throwing basketball in the air at his desk.

Leaders recently published a report compiling a list of the major funding rounds in the sports industry from June 2017 to November 2018.1 The analysis showed a total amount raised of over $1 billion with investments from leading venture capital funds such as Softbank and established corporate entities including BSkyB and ESPN. However, the report also illustrated the prominence of individual athletes in the sports investment ecosystem with a concentration on funding early stage companies operating in the sports technology sector.

This article analyses the drivers behind the rise of the “athlete investor2, describes the different models of equity investment and offers guidance on the key legal considerations when executing a fundraising. It also draws out the benefits and risks for the athlete of investing in growth phase businesses and for the company in receiving investment from a high-profile player. It is accepted wisdom that the influence of athletes now extends beyond the stadia of professional sport and their prominence as professional investors is another part of this evolution.

 

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Author

Mike Herbert

Mike Herbert

Associate, Northridge

T: +44 (0) 20 3957 8812

Mike has a broad corporate and commercial practice which includes advising on M&A transactions, fundraisings, joint ventures and corporate reorganisations. He also regularly advises on governance issues in sport and was involved in the development of “A Code for Sports Governance”. Mike joined Northridge after over four years at Slaughter and May.

Recent work highlights include advising on the increase in Farhad Moshiri’s stake in Everton FC; the sale of digital design agency, W12 Studios, to Tata Consultancy Services; and the transfer of Cesc Fabregas to AS Monaco.

Mike is an active member of Northridge’s Sports Tech programme, acting for high growth technology businesses and investors in the sports and entertainment industry. He has also completed the BASL/ De Montfort Law School Diploma in Sports Law and Practice.

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Jon Walters

Jon Walters

Partner, Northridge

Jon provides commercial and corporate advice to clients. He is recognised by the directories as a “real go-to adviser” and a “commercial and regulatory expert”, with particular expertise on governance, corporate advice and commercial rights.

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