Sports Investment Is Surging: The Ultimate Fundraising Guide to Raising Capital

Before diving in, some quick updates:

  • Profluence+ Community: Now 600+ members strong!
  • We hosted our first in-person gathering in Tampa/St. Pete with over 80 founders, investors, athletes, and executives.

This is a fun one today taken from the “Ultimate Fundraising Guide.”

profluence sports fundraising guide image

It’s a self-guided 20-module course on raising capital and understanding startups. It covers every step of the process and includes actual templates, legal docs, lists of sports investors, and much more.

Get the Fundraising Guide

*It’s included as part of the Profluence+ membership

Let’s Dive In ????


Sports Business is Booming

In just one week, we saw a flurry of major sports announcements:

  • Tennis Australia (AO Ventures): Closed a $30M early-stage fund to invest in 20 startups by 2025.
  • The Snow League: Shaun White’s pro winter sports league raised $15M in a seed round.
  • Ryan Reynolds & Rob McElhenney: Acquired majority control of Club Deportivo La Equidad (Colombia’s Categoría Primera).
  • Eternal (Alex Mather): Founder of The Athletic (sold for $500M) raised $13.25M for an athlete-focused healthcare platform.
  • Scrum Ventures: Closed a $68M sports fund with strong Japanese influence.
  • Presidio Investors: Took control of Serie A’s Hellas Verona FC.

That’s hundreds of millions of dollars flowing into the sports ecosystem in just days.

To capitalize on this momentum, it’s crucial to understand market dynamics.

Breaking Down Market Sizing

Two key challenges are slowing institutional investment in sports:

  1. Uncertainty Around Market Sizes
  • Many investors wonder if sports can deliver the scale they need.
  • Founders raising at reasonable valuations and leveraging cost-effective AI tools can help change this narrative.
  • Better defining TAM, SAM, and SOM is key for everyone in the industry.
tam sam som chart
  1. Fragmentation
  • Sports markets are fragmented globally, especially in youth sports, with complementary assets owned by separate entities.
  • Private equity often avoids the hard work of consolidating these assets into scalable investments.
  • Aggression is KEY to success in this space.

The Founders/Team

We already know that sports is hot and that despite some challenges (fragmentation and market sizing) it’s an intriguing vertical.

Most of the backing ultimately falls onto the founder/team, as many of the same ideas are recycled repeatedly.

Investors think of it in two ways:

  1. The actual leader of the company
  2. The team they put around them

They understand that if the person leading the company cares about one other thing in the world, that company will fail.

draftkings founders early days

For example, the DraftKings co-founders worked nights and weekends for months and were rejected by 40 VC firms before getting their first investment.

Then, when looking at the team

Investors look at the overall skill set and expertise necessary to deliver, right?

Too many people can’t come from just one area: sports. Yes, you have to have sports expertise, but also other areas.

It then leads to the product:

  • DraftKings is a consumer product company, not a technology company.
  • Fanatics is an aggregator, not a merchandise company.
sports tech product image

The best companies make technology invisible and use it to make the product more accessible, interesting, and engaging for consumers.

We need more “tech companies building in sports” and not “sports companies trying to build tech.”

Technology is a tool, an enabler — the more invisible it is and the more it’s used to make the product more accessible, the better.

How VC views Startups

A startup is a “temporary organization designed to search for a repeatable and scalable business model,” while small businesses operate according to a fixed business model.

Venture capital is often described as a game of home runs because the potential returns on a successful investment can be extremely high, while most investments fail or yield minimal returns.

power law distribution vc

There are four main types of exits in the VC world:

  1. Merger & Acquisitions (M&A) – the process when one company buys another, taking a controlling stake of its share and the rights to the assets.
  2. Secondary market trading – the process when venture capitalists who invested in the earlier stage can sell their holdings to new investors during the later rounds.
  3. Stock buyback – the process when a corporation purchases stock from an angel or venture capital investor back.
  4. Initial public offering (IPO) – the process of offering shares of a private corporation to the public in a new stock issuance for the first time.

For example…

We recently had Vasu from Courtside Ventures on the podcast, and he said that Fund I looked at 5000 companies, invested in 30, and only 3 of them yielded 99% of their 3x return to investors.

Main Investors in Sports

To understand the space, you need to know all of the different groups.

I’ll lay them out here — but will explore them deeper for Profluence members later:

  • Banks
  • Syndicates
  • Incubators
  • Accelerators
  • Nation States
  • Private Equity
  • Venture Firms
  • Family Offices
  • Corporate VCs
  • Venture Studios
  • Investment Banks
  • Team Private Equity

You also need to know how to navigate these:

  • Pre-Seed
  • Seed
  • Bridge Rounds
  • Series A
  • Series B+
  • Growth Equity
  • Acquisitions
  • IPOs

Get the Ultimate Fundraising Guide

I hope you enjoyed this free preview of the Ultimate Fundraising Guide.

Get the entire guide in the Profluence+ Community:

  • 100+ FAQs by Investors
  • 40+ Pitch Deck Examples
  • 300+ Sports Investors List
  • Different ways to raise capital
  • Understanding funding rounds
  • 7+ Financial Modeling Templates
  • Cap Table & Data Room Templates
  • Cold Email + Investor Update Examples
fundraising sports

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*For a limited-time 15% discount, use the coupon code: SPORTS

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