Powering the Alts Revolution with Leore Avidar, CEO of Alt
“I believe that in 10 years when people buy homes, they won’t buy with cash. They’ll be buying with sports cards, sneakers, Birkin bags, or NFTs.
There needs to be a way to facilitate that…And I think I can create the financial infrastructure.”
Listen on Apple | Spotify | Soundcloud
In today’s episode, I sat down with visionary founder, prolific alts investor, and serial entrepreneur, Leore Avidar.
Leore is the Founder and CEO of Alt, a marketplace for sports cards that authenticates its transactions and provides buyers with the peace of mind that the card they’re dropping thousands on is no fake.
If you paid attention to the alt assets & passion economy space over the last few years, you’d have witnessed the amazing surge in interest, marketplaces, onramps, and valuations for this asset class. The sheer volume of episodes covering this topic on Wharton Fintech in the last few months should be an indication. Probably ~10 of our last 60 episodes!
Leore himself is a card collector and trader fanatic, having been deep in this asset class for years. His track record backs up his confidence in this space and himself. Trigger Warning for Any Private Equity Folks…His original fund has netted an IRR of 150%+ over the last few years, and Alt’s fund (for accredited investors) has hit 300%+ IRR!
It’s worth noting Leore is also the CEO of Lob, a direct mail marketing and address verification API company that is on the path to going public in a few years. Leore is a truly talented individual.
We have a fun conversation today exploring the world of sports card trading, collectibles, and the inner workings of Alt. We cover:
His Journey from Wall Street, to Tech, to Entrepreneurship and Cards
After working as a trader at Citi and in tech at Amazon, Leor left to start Lob. But in 2016, his dad shipped him an old card collection during a move, which started it all.
“In 2016 I started doing small arbitrages. $10 turned into $100, turned into $1,000, turned into $10,000! My friends were like, Hey, can we get into this? So I started taking outside money. And lo and behold, in 2020, I was managing a book of 10’s of millions of dollars in sports cards. But I’m still running a company, so my hobby started kind of bleeding into my actual business. So I had to really try to figure out hey, how do I manage both of these?”
How Alt Works
As mentioned, Alt is an awesome marketplace to buy and sell sports cards. However, they are embedding transparency, clarity, certainty, and education into their marketplace. A few key features stand out:
- Pricing & valuation assistance. Leor has been working to take the knowledge he has and “productize” it. Cards are notoriously hard to value — They’re illiquid, change with athlete performance and sentiment, are semi-fungible, have many different issuers/quality/style, and more. So Alt has built the “Alt Value” feature, where they set a rough valuation on the card based on historical trading, comparable cards, ratios/multiples, and more. He compares it to Kelly Blue Book or Zestimate from Zillow.
- Fraud. “It was one of the biggest reasons we started Alt.” They have many fraud mitigants, but he highlights the main 3:
- Custody of assets. Alt requires you to have the product, and they store them in their various “Alt vaults” around the country. They’re like Fort Knox for sports cards, with perfect temperature and lighting control
- Restricted return policy
- Eliminating shill-bidding (when people bid up prices but don’t pay). In order to actually use Alt, you have to deposit money into your account. Anytime you make an offer on an asset, they take that money away temporarily
3. Transparent, low-pricing. 1.5% on transactions, that’s it. Those who have used some similar platforms over the years will know how powerful this is.
Alt’s Competitive Landscape
“There’s so much white space right now that I think everybody who is deploying cash into alternative assets is a competitor. It’s not Fidelity. You can’t go buy sneakers on Fidelity right now. And when people bring up StockX and eBay, you don’t think of those as investment platforms.
I would say any platform that allows you to invest in something that is not stocks, bonds, and real estate is technically part of the competitive landscape. You might include companies like Republic, Angel List, Rally, Otis, we’re all part of this New Age investment thesis. And we’re all competing for the same wallet share.”
The $31M round from folks like Alexis Ohanian, Sue Wagner (Blackrock Co-Founder), Larry Fitzgerald, Coinbase/Paradigm Founder Fred Ehrsam, Darren Rovell, First Round Capital, Tobias Harris, The Collisons, Michael Sidgmore, Kevin Durant, and many others!
“I want to be able to partner with people that I can get mentored from and learn from. So I went to pitch everybody this very unique vision that I believe: In 10 years when people are buying homes, they’re not buying it with cash. They’re gonna be buying it with sports cards, sneakers, Birkin bags, or NFTs. And there needs to be a way to actually facilitate that…
People want to invest in things that they understand and believe in and relate to. So if I fast forward 10 years, I really believe full-fledged that that is the world we’re living in. I think I can create the financial infrastructure and they’re all part of that vision. They’re all seeing this new world of FinTech, whether it’s cryptocurrency or infrastructure, and they want to be part of that. And I think a lot of people who have been successful in FinTech want to continue funding these types of ideas so that we can continue moving the world forward!”
The Toughest Parts of Entrepreneurship & Managing a Startup
Leore goes in-depth about how much energy he pours into hiring and culture setting, especially for Alt. Alt sprouted up 40 employees almost instantly, and he had to think very, very carefully about hiring and culture-setting. He gives a lot of credit to his alma mater, Michigan, for giving him great hires!
What else does he mention? Deploying capital. This topic is something not discussed enough, and should be its own podcast series!
“Deploying cash is very hard. You raise a lot of money and then people struggle with ‘how safe should I be? How much money should I burn.’ But the market rewards growth, right?…You need to figure out how to grow that top-line metric as fast as possible.
And you have to be willing to make mistakes. A lot of people raise all this money, and then they become scared. They say I don’t want to lose, I don’t want to make a mistake. And it ends up creating this vicious cycle of them losing because they just don’t spend. So spending wisely and being okay making mistakes is probably one of the weirdest feelings early on at a company! You’re spending money to make mistakes, and that’s actually the part of startups in the beginning that people don’t realize is part of the process.”
Leore was fantastic in today’s episode and brings a lot of strong insights & energy.
We also cover:
- The Alt customer journey
- NFTs and NBA Top Shot
- Whether people should be investing in these illiquid, mispriced, early assets
- How there’s hope for me to make money on my NY Jets fandom
- A fun rapid-fire round including his best & worst ever investments
- And much more!
Listen on Apple | Spotify | Soundcloud
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Some quotes have been lightly edited for clarity
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Other Episodes You Might Enjoy:
Michael Sidgmore, Partner at Broadhaven Ventures: Why Alts Are Going Mainstream!
Former Vanguard CEO & Chairman Bill McNabb: The Future of Finance, Leading in Crisis, & ESG
Rally Co-Founder, Rob Petrozzo — Investing in Collectibles & Building a 21st Century Portfolio
Republic Founder Kendrick Nguyen: Empowering 1 Million People with Private Investing!
Y Combinator’s Michael Seibel & Dalton Caldwell — Lessons from 5000 Entrepreneurs
Anthony ‘Pomp’ Pompliano: Going All-In On Bitcoin & Backing Industry-Changing Companies!
Mayor Francis Suarez — Bringing Silicon Valley to Miami!
Kai Cunningham of Limited Ventures: Bridging the Gap Between VC and Pro Athletes + Entertainers
Jeff Immelt, Former GE CEO — Globalization, Crisis Leadership, & 16 Years at The Top
Titan Co-CEO & Co-Founder, Clayton Gardner — ‘Courtside Seats’ to Active Money Management
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Ryan Zauk
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Ryan Zauk is a recent graduate of the MBA program at The Wharton School, where he led the Wharton FinTech Podcast. He currently works with the US International Development Finance Corp looking at technology impact investments in developing markets. He has a passion for music, media, and all things FinTech. He will be joining Morgan Stanley in Menlo Park this summer.
You can reach him at rzauk@wharton.upenn.edu or on Twitter.
