The appetite of athletes for startups
Mario Götze, LeBron James, Serena Williams: More and more athletes are investing in startups to build their legacy beyond sports.
Michael Jordan is doing it, Mario Götze, Kevin Trapp and Emre Can too. More and more athletes are investing in their careers beyond sports. Communities like “The Players’ Impact” provide a platform for this.
In the United States, entrepreneurship and professional sports have long gone hand in hand. Athletes like ex-basketball star Michael Jordan have been making targeted and lucrative investments for decades. On the court, Jordan won several NBA titles and two Olympic gold medals; off the court, he became the world’s richest athlete with investments such as in the sports betting provider Draftkings. Forbes magazine estimates his fortune at $1.6 billion (latest figures on The World’s 10 Highest-Paid Athletes 2023).
Jordan is not the only example; LeBron James, for example, is the first active basketball player to become a billionaire through investments. Tennis icon Serena Williams has even set up her own venture capital fund. In Germany, more and more professional athletes are emulating them, albeit on a much smaller scale, by building up a second livelihood during their active careers.
They are led by national soccer player Mario Götze, who now has stakes in 19 startups, according to data service Crunchbase. “Venture capital is fun for me,” Götze tells Handelsblatt. Others, such as his national team colleagues Kevin Trapp and Emre Can, founded their own companies straight away. In Trapp’s case, it’s the Oatly competitor Moelk, which he started together with friends. In Can’s case, the bag and cosmetics brand Aece.
“I don’t want to stop at some point and only then start thinking about what areas I could still see myself in,” explains goalkeeper Trapp, who, like Götze, currently plays for Eintracht Frankfurt. He already wants to try out things that might appeal to him after his soccer career.
Professional athletes as startup investors: U.S. athletes community comes to Europe
“I find it very exciting to get an insight into how a startup works, how to set it up and run it,” says handball player Steffen Weinhold, who like FC Bayern basketball player Niels Giffey has invested in fitness band provider Straffr. “As an athlete, I can give Straffr professional feedback on the product.”
For those athletes who don’t want to acquire all the knowledge and contacts in the scene themselves, the community of active and former athletes “The Players’ Impact” (TPI), which has been active in the U.S. since 2017, is lending a hand. It gives members the opportunity to slowly become familiar with the startup world and its cycles dominated by financing rounds. And then get in professionally. “As a member of TPI, you get access to investment opportunities,” says Managing Director Europe Irg Torben Buehrer. In regular Zoom calls, startups pitch, in which athletes can then invest.
TPI now wants to offer more networking events and workshops on topics such as funding rounds and angel investments in Europe. It is possible to participate in deals with not too high amounts. Typical of these “angel investments” by private individuals usually start with much higher sums. The TPI portfolio now includes well-known startups such as Stripe and Robinhood. Giffey has also already made use of this and participated in two investments through TPI.
Buehrer knows the scene in the U.S. and in Europe and identifies significant differences. On the one hand, many more professional athletes are active as investors in the USA. On the other hand, there is a greater openness toward athletes, and the business world is more likely to see the great potential they can bring to the business. In Germany, on the other hand, people still often say: “They’re just athletes.”
Dr. Kathrin Steinbrink from the Campus Founders incubator gained similar insights during her dissertation: “In Germany, professional athletes often have a career disadvantage after their athletic careers end.”
Sports and entrepreneurship: Mario Götze also invests in sports-related startups
According to Steinbrink, sports and entrepreneurship go well together: “Competitive athletes and successful founders have a lot in common — higher emotional stability, conscientiousness, extraversion and a greater willingness to take risks.” Mario Götze confirms this from an athlete’s point of view. Like many athletes, he puts his money into sports-related startups, but he also thinks beyond that, as he did recently with Hamburg-based cybersecurity provider Secjur.
There is no shortage of opportunities to bring sports expertise to sports companies. WHU professor Sascha Schmidt says: “In Europe, the number of startups in the sports sector has increased sharply over the past few years.” Compared to the U.S., however, Europe plays in a regional league.
Last year, according to the data provider Sportstechdb.com, around ten billion dollars were invested in sports-related start-ups. Well over half of this sum went to the USA, with Europe receiving just under 17 percent. Of this, Germany in turn received the largest share. This is due to the funding rounds of the soccer app OneFootball and the Munich-based startup Kinexon, whose sensor technology was also used in the World Cup ball in Qatar.
Even prominent investors cannot guarantee the success of a startup, of course. On the contrary, on average nine out of ten startups do not make it. The high level of uncertainty in the business world makes it difficult for athletes to make well-considered investment decisions, says Buehrer.
Ex-soccer player Philipp Lahm has also experienced ups and downs, having invested heavily in the past but, for example, having to quickly sell his personal care products company Sixtus after numerous layoffs. But volatile success is also something that athletes know well.
This also applies to Michael Jordan: Asked about his relationship with failure and problems, he likes to refer in conversations to the more than 9,000 misses he has made in the course of his career.
The article by Nadine Schimroszik originally appeared in Handelsblatt on February 07, 2023.
