Kobe Bryant (Bryant Stibel) vs Carmelo Anthony (Melo 7 Tech Partners): Who will be a better venture capitalist?
The ESPN documentary “30 for 30” Broke emphasizes the narrative that many professional athletes have made millions of dollars throughout their careers. Many of these athletes will file for bankruptcy within three years of retiring from their respective sport. Some have made poor financial decisions or invested in businesses with little chance of success.
The documentary highlights the high percentage of athletes that have started restaurants, rap labels and car washes. Recently, there has been a change in the asset management of athletes such as Kobe Bryant and Carmelo Anthony. They are changing the status quo by becoming venture capitalist.
Investopedia definition of venture capitalist (VC) is an investor who either provides capital to startup a business ventures or supports small companies that wish to expand but do not have access to equities markets. You may ask why take the risk to become a venture capitalist vs. owning your business or a safer investment option (T-Bills, Mutual Funds)?
Carmelo Anthony states in an interview “he would want to brand himself as a tech pioneer athlete innovator, business tycoon. Anthony wants to invest in startups and multiply his bank account by 100 because billions can solidify his reputation in a way millions/NBA championships can’t. I understood this, as being on the Forbes list is forever whereas as athletic success is temporary. On the contrary, Kobe Bryant said in an interview with MSNBC “No better feeling than helping entrepreneurs” is his primary passion. It is very believable when Kobe is speaking as he has made some brilliant business moves in his basketball career that I will explain later.
Kobe Bryant vs. Carmelo Anthony as basketball players:
If we were talking basketball, it would be easy to compare Kobe Bryant vs. Carmelo Anthony.
It is very clear who is the winner from the chart above. Kobe has 5 championships and tons of accolades that Carmelo may never get in his career. (See above).
In this blog post, I am going to compare Kobe Bryant and Carmelo Anthony business acumen and then their respective VC funds.
Risk Tolerance & Business Acumen: Kobe Vs. Carmelo Anthony:
Kobe Bryant is believed to have earned 680 million in career earnings with over his 20-year NBA career. Furthermore, not many NBA players have their own signature shoe line. I m sure you can count the superstars on Nike with their own line. (Kevin Durant, Kyrie Irving, Kobe). The Kobe signature shoe line from Nike will receive the rare Michael Jordan treatment. Nike will continue to innovate and manufacture new Kobe shoes after his playing career ended. Kobe Bryant lines of shoes are #1 selling basketball shoe in China. In addition, Kobe is an icon in China, the largest basketball market. If you think about China population, that is a lot of shoes and apparel being sold every day. Moreover, in 2014, Nike sold $105 million of Kobe apparel. This is an impressive number but where I want to give Kobe his dues is for risk & strategy. It begins with Kobe decision to leave a $10 million dollar/per year contract with Adidas in 2003. Adidas gave Kobe his own signature brand as an 18 year old that jumped right out of high school to the NBA. He only played 15 minutes a game as a rookie. His stats were pathetic to say the least. Adidas made the bold move to shoot commercials with their unproven star. By 2001, Adidas gamble looked genius as Kobe was considered the heir-apparent to Michael Jordan. After the KOBE TWO released in 2001 with poor shoe design, which looked like a car and him favoring wearing older pairs of his own shoes in the 2001 playoffs. Kobe made the jump to Nike mid-career. Leaving the loyalty that Adidas showed him as a high school student. I see this as a very bold move by Kobe as I believe it’s human nature to be loyal to people who had faith your abilities before becoming a NBA all-star and champion.
The second example of when Kobe was innovative and took risk in his career was when he met with Nike design team and began brainstorming ideas for the KOBE IV; His focus wasn’t on precedent but rather on setting his own mark. Kobe as an avid soccer fan wondered how soccer players who put stress on their ankles could wear low-cut shoes on the pitch. He felt they could do something similar on the hardwood. This idea was against the common belief in the basketball world that high top shoes reduced sprained ankles. So that day in the boardroom, he gave Eric Avar, Nike’s performance creative director one specific instruction. Create the lowest, lightest basketball shoe ever. The end result is a shoe that weighs just 11.8 ounces, 20% lighter than the average Nike basketball shoe. Innovative!
Let’s look at the following quotes from Carmelo Anthony about Puerto Rico FC.
“I’ve always liked soccer, you know me, I always like doing things non-traditional, I like doing things outside of the box,” said Carmelo Anthony, Last year Carmelo purchased Puerto Rico Football Club, an expansion team in the North American Soccer League. Carmelo says he had been exploring various ownership opportunities, but when the chance to have a team based in Puerto Rico, it was a match made in heaven.” There was a deep need for a soccer team, even though baseball is the number one sport down there, I just wanted to bring something different to the island,” Anthony said My passion for soccer has always been there“. The more time I started spending in Puerto Rico over the past six, seven years I realized that there was kind of a void down there on my island. The island didn’t really have anything that they could kind of call their own, that they could represent not just on the island but also from a global standpoint”.
I would like give Carmelo credit for taking on this type of challenge for venturing into the world of professional sports, which has lots of risk, opportunity and philanthropy.
Kobe Stibel vs Melo 7 Tech Partners
Carmelo Anthony and Former NBC and Bertelsmann Executive Stuart Goldfarb are investing in tech startups together. Carmelo and Stuart met through his Carmelo wife, former MTV VJ Lala Anthony. Stuart Goldfarb had been the CEO of Bertelsmann Direct North America, a marketer of music, movies and books with billions in annual revenue. They have created a partnership called Melo 7 Tech Partners. Melo 7 Tech Partners mission is to develop opportunities primarily in early stage digital media, consumer interest and technology ventures.
Since they started in 2013, they have backed over 20 companies with six of these backed companies purchased by larger firms in the last two years. Stuart Goldfarb role is to breaks down numbers, looks at the odds, and studies the market and estimates success rates.
Melo 7 Tech invested in Mars Pet Care that was acquired by Whistle, makers of a GPS pet tracker that Melo 7 Tech backed. The deal was valued at over 100 million. Melo 7 Tech portfolio has a number is startups that have managed to attract a sizeable rounds led by traditional VC funds like Felicis Ventures, Accel Partners and Battery Ventures. Melo 7 Tech has invested in the ticketing app SeatGeek, the mobile app for wine reviews and shopping Vivino and Maker’s Row a marketplace that connects US-based factories with small business who want to manufacture their products domestically. Another start-up they have invested in is Walker Co, makers of healthy and beauty products of people of color. Since investments in early stage startups take seven to ten years to get to a point of liquity typically it too early to know if Melo 7 tech will become successful. Carmelo playing basketball for the New Yorks Knicks is another competitive advantage as he near the pulse of Wall Street.
Bryant Stibel is a VC firm that is focused on the convergence on media, technology and data. In 2011, they announced Bryant Stibel as a $100 million investment fund with the mantra on value-growth. Jeff Stibel is former web.com president & CEO, business week “40 under 40”, New York Times bestseller. Kobe acknowledged that balance sheet analysis is Stibel’s strength, whereas he is more focused on storytelling and branding. He said Nike CEO Mark Parker is one of the chief executives he most admires and has been mentoring him throughout his second career as a venture capitalist. You can really see Kobe applies to the same passion for basketball in this quote “But if you really want to create something that last generations, you have to help inspire the next generation, and they create something great, and then that generation will inspire the one behind them, right? And that’s when you create something forever. And that’s what’s most beautiful”. See the picture below of a list of companies that Bryant Stibel has backed.
Who has the Competitive Advantage?
Which fund will be more successful ten years down the road? I feel that Kobe Bryant and Carmelo Anthony have two distinct competitive advantages over other investors. They are extremely popular on a global macro level by a large amount of fans worldwide. Who wouldn’t take a phone call or meeting from Kobe Bryant and Carmelo Anthony. The brand they have developed in the NBA should take them every far in the world of business/investing. Leveraging the fact that many people they are dealing are larger than life fans is the first competitive advantage Bryant Stibel and Melo 7 Partners.
The other competitive advantage that both funds have is both Kobe Bryant and Carmelo Anthony are liquid. Career earnings of 680 million and 225 million will allow both funds to be able to take more chances or invest larger sums of money in a company that they think has a chance of being successful. A third factor that applies to Kobe more than Carmelo. If Kobe can leverage his popularity in China for the businesses his fund is backing. That could be the factor on whether the start-up scales to become a innovative company that is mentioned with Uber, Airbnb and Snapchat.
If I were to select which fund will be more successful, I would say Kobe Bryant b/c of his popularity in China. Kobe becoming a spokesperson/advisor for a company he’s backing can translate in sales in the Chinese market. If it does translate in increased visibility and marketshare, I think this is factor sway my opinion in thinking Bryant Stibel may be the marginally more successful VC firm.
Leave a comment below on which you think will have the more profitable VC firm?
** Not everything is 100% correct
** Just my opinion