Fully Baked #25: Athlete Investing

💡 An idea we first served up 600+ editions ago

🔬 We validated this idea - here's what we found

🚀 The go-to-market playbook for this product

🤑 What do the unit economics look like?

⚔️ How the competitive landscape looks

❓ Our verdict: is this a go or no-go idea

The payoff at the top is genuinely absurd. Ronaldo alone pulled in an estimated $300m over the last 12 months, $235m of that just from his Al-Nassr salary. The average NBA player, someone you've never heard of, still clears $9.7m a season. The lottery ticket is real.

The problem is nobody can afford to buy the ticket early. A single year chasing a PGA Tour card on the mini-tours costs a minimum of $25,000 in entry fees and travel alone, and PGA Tour pros are budgeting $125,000+ a season just to stay on tour. Most young athletes are funded by parents remortgaging the house, not spreadsheets. You can bet on an athlete's next game, but you can't back their next decade.

So the idea: let fans front that capital instead, in exchange for a cut of the athlete's future earnings.

A platform where fans angel invest directly in athletes early in their careers, in exchange for a percentage of their future earnings.

Athletes list their stats and career goals. Backers commit capital, similar to a seed round, in exchange for the right to a share of that athlete's earnings each year they're active.

It's structured like a venture portfolio: most athletes return nothing, a small few return enormous multiples, and diversification across many athletes smooths that out. The platform could also bundle athletes into sport-specific indices for fans who want exposure without picking a single name.

Smart money keeps funding this thesis. At least six platforms are live in the space right now: Moonshot (YC S22, covering tennis, golf, basketball, football and motorsports), FANtium (tennis, $2m seed), Commonwealth (tennis, golf, horse racing), Finlete (baseball), Slice Token (golf, tennis) and Big League Advance (baseball, institutional). The regulatory path is proven too, with multiple SEC-approved offerings already through the door.

So we went looking at how the raises actually went. Big League Advance, the institutional version of this exact model, is raising its third fund with a $250m target and had $41.6m in assets as of March 2024. Vestible's NFL player offering closed near the low end of its range at $653,000, and the company hasn't run a second athlete deal since.

On the retail side: NBA player P.J. Washington ran a direct-to-fan offering seeking $1m, and subscriptions topped out at $12,700. FANtium's first tennis athlete raised $52k from fans - a genuine proof of concept, and the strongest retail number we found.

The interest is in the players they know, not the prospects they don't. 68% said they'd rather put $100 on a bet or prediction market involving a player they already follow than invest it in a portfolio of unknown prospects. Familiarity is key here.

Supply first: recruit ex-pros, scouts and prospect analysts as the faces of early raises. AngelList launched with famous angels, not investors, and each credible name brings their own audience with them.

Partner with one academy or mini-tour for the first athlete cohort. One official partnership does more for trust than any ad spend when you're asking for a decade-long commitment.

The repeatable channel is athlete-led: each signed athlete markets their own raise to their own following, the same playbook FANtium used to hit $52k. Every raise doubles as a content event for sports media.

The thing to watch: five other platforms are fishing that same pond, and the channel that scales past "one athlete's personal following" into a self-sustaining marketplace hasn't been found yet. Whoever finds it wins the category.

Athlete take rate: athletes give up 10-30% of earnings for a set number of years, tapering as they hit milestones - roughly the structure Slice Token already runs on tour prize money.

Platform fee: a 2% management fee on funds under management, plus a cut of the upside, mirroring a VC carry structure.

Target CAC: low per backer - fandom does the selling, not paid acquisition. Athlete-led raises make each new athlete a distribution channel.

LTV: here's the number that defines this business. Big League Advance's own portfolio shows roughly 100 of 400 funded athletes made the major leagues, and another 100 washed out of sport entirely. LTV per athlete is close to zero most of the time, so the model only works diversified across hundreds of athletes.

Moonshot (YC S22): fan angel investing across five sports, launched with a 250-person backer waitlist in 2022. Lesson: getting category attention is easy. Turning a waitlist into a functioning market is the hard part.

FANtium: tokenises tennis players' prize money, raised a $2m seed. Lesson: crypto rails (wallets, KYC, secondary marketplaces) add friction on top of a demand question that hasn't been answered yet.

Big League Advance: the institutional-capital version, still short of its latest fund target. Lesson: watch what the professional money does - it's a stronger signal than any fan survey.

There’s no obvious gap in the market, just a lot of companies trying to achieve the same outcome. No one’s cracked it yet though…

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