World’s Premier Athletes Get Early Look At Venture Capital Deals, Thanks In Part To Their Social Media Game
Top athletes around the world are getting an early look at venture capital deals thanks to their social media presence and large fan base.
Their Instagram and Twitter following gives them a direct line to fans, which can be used to promote companies that they invest in, according to CNBC.
Jon Sakoda, a founding partner at venture firm Decibel, said that startups spend a lot of time and money accumulating millions of followers, but athletes are able to leverage a loyal audience immediately.
“Especially if you’re a consumer company — you want name recognition, the athlete brand and the audience distribution,” said Sakoda. “Social media is the primary acquisition channel for almost all startups and influencer marketing and tends to be the most successful and effective form.”
There will be an economic upside for the venture firm and the athlete because the athlete’s endorsement helps with marketing and lowers the cost of customer acquisition for portfolio companies, which translates to lower minimum investments for celebrities and athletes.
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According to professional lacrosse player and founder of Rabis Ventures, Paul Rabil, founders often weigh which investment dollars are most strategic.
“If you’re an entrepreneur looking at the value proposition of an athlete, it’s usually their social media presence,” Rabil said. “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.”
However, investors are not blind to the relatively short careers in professional athletics brought about by the risk of injuries.