Beyond NBA, Andre Iguodala Wants To Disrupt How All Athletes Do Business
Investing in a tech startup is quickly becoming common practice in the National Basketball Association, and Golden State Warriors forward Andre Iguodala may be the poster child for that.
Iguodala gets a lot of the credit for disrupting the way pro athletes invest after they leave the game.
Now he wants all pro athletes to think about their prospects after their sports careers are over, and to think about investing in technology companies directly.
Together with his business partner, Rudy Cline-Thomas, Iguodala has been working to connect tech and sports, organizing events and making deals to bring together two worlds that no longer seem quite so disparate.
The NFL has reached out to him, Iguodala said in a Morgan Stanley promotional video.
“I’ve still got both feet on the court but my business endeavors are starting to come to fruition,” Iguodala said. “We keep talking about disruption but we want to change the way the athlete does business, to be the bridge in reference to the entire sports community. It’s been overwhelming. The NFL also reached out to us (to create) an initiative. I’m not looking a year ahead. I’m looking 10, 15 years ahead and saying, where can we take this thing?”
Iguodala’s own personal foray into tech started out “as simple as an E-Trade account,” he said. “I found myself investing in a few tech companies and seeing a great return on those companies and wanted to go deeper into that.” He makes it sound easy and small. In fact Iguodala seeded that E-Trade account with $2 million, and gave Cline-Thomas a year to see what he could do, according to Bloomberg. It went well.
Iguodala, 33, joined the Warriors in 2013. The pro basketball team is a Silicon Valley darling owned by Joe Lacob, a partner at venture capital company Kleiner Perkins Caufield & Byers, and Peter Guber, chairman of Mandalay Entertainment Group. They bought the team in 2010 with a group of tech heavyweights including YouTube co-founder Chad Hurley, former Facebook executive Chamath Palihapitiya, and Zappos.com founder Nick Swinmurn.
For players, the franchise offers unparalleled access to the Valley’s elite, Bloomberg reported:
“This proximity is part of what drew Iguodala to the Warriors and why he decided to stay this summer, spurning offers from the Houston Rockets, San Antonio Spurs, Sacramento Kings, Los Angeles Lakers, and Philadelphia 76ers to re-sign with the team for $48 million over three years. With the Warriors widely expected to dominate the league during that span, Iguodala is determined to take advantage while his star is shining brightest.”
Iguodala and Cline-Thomas own stakes in about 25 startups worth $25,000 to $150,000, including the health and beauty brand Walker & Co., mattress online retailer Casper, personal-finance app NerdWallet, Derek Jeter’s digital publishing company, the Players’ Tribune; and Mayvenn, a hair extensions supplier.
Together they invest via a company called F9 Strategies LLC. Cline-Thomas looks for leads in Silicon Valley, makes introductions, and lines up meetings. “There’s nothing that we don’t do together,” Cline-Thomas told Bloomberg.
“We are creating initiatives to where athletes can get more involved and we’re trying to create a larger ecosystem for athletes in more sports,” Cline-Thomas said in July at the Morgan Stanley NextGen Software CEO Summit in Deer Valley, Utah.
Iguodala’s teammate, Stephen Curry, a two-time league MVP, is also investing in Silicon Valley. On Aug. 15 the teammates played host to the Players Technology Summit in San Francisco.
There, they and other athletic tech investors got inspiration from Troy Carter, the hip-hop promoter, talent manager, and tech investor. “Be owners,” Carter said. “Don’t just have a seat at the table.”
Iguodala said he and Cline-Thomas have learned that the bridge between tech and sports can really lead to disruption:
“We saw firsthand how athletes are starting to have these global brands, these global influences. Connecting the world of tech and sports — it’s not just holding up a soda can and smiling. It’s how can you bring that company to the next level?”
More than 100 Silicon Valley CEOs attended the Morgan Stanley NextGen Software Summit, where Iguodala and Cline-Thomas were keynote speakers. They responded to questions about recent contract negotiations with the Warriors, ESPN reported.
“When players understand they can gather their own information, and the importance of empathy in negotiations, we’ll be doing our own deals,” Iguodala said during the session.
“Iguodala never wanted to leave Golden State. His heart and greatest career achievements — on and off the hardwood — are tied to the Bay Area. It’s where his family is rooted and where he and his teammates have a chance to be mentioned among the ranks of the Lakers and Celtics as one of the greatest teams in NBA history. Still, Iguodala’s intention was always to take care of business first and foremost. And he did just that,” according to ESPN.
While many athletes and celebrities are “kind of dabbling here and there” in tech investments — says Paul Kwan, Morgan Stanley’s head of West Coast tech banking — Iguodala has spent time doing his homework. “Tech is hot, so they’re jumping in, and it’s the fad of the day,” Kwan said. “But people don’t realize how long these guys Rudy and Andre have been thinking about tech, working on tech, building connections, getting smart.”
What athletes should know about investing in Silicon Valley
The first thing an athlete arriving in Silicon Valley needs to know is that startups are a great way to lose money, said Jeff Jordan, a general partner at venture capital firm Andreessen Horowitz, in a Bloomberg interview.
The second thing for athletes to know is that startups don’t give out money, they take it.
And in Silicon Valley, celebrity provides access.
But don’t expect big endorsement deals or to earn the kind of equity that LeBron James is said to have made ($30 million) from his share of Beats by Dre when Apple Inc. bought the headphones brand for $3 billion in 2014.
Some investors and founders say that athletes and their agents often expect endorsement deals from private tech companies as they would with Nike, Coca-Cola, or State Farm:
“Tristan Walker, the founder of Walker & Co., the health and beauty startup in Palo Alto that markets to people of color, counts Iguodala, Harrison Barnes, Magic Johnson, and rapper Nas as investors. Walker turns away celebrities almost daily looking for a piece of his company, he says. Iguodala and Cline-Thomas stood out for their thoughtfulness. “They are all in on this, and it’s on a different level than a lot of other celebrity entertainers,” Walker says, according to Bloomberg.
How did Iguodala do it? By networking, studying and doing his homework, he said — mainly in the tech world — meeting the right people and “just traveling the world.”