7 Investment Strategies Athletes Need To Consider
As Athletes get more and more involved in different investment deals it’s important to understand some things that one should look into before jumping in. A lot of companies may look good on the surface but the best investors look deep into the company and make sure it fits their investment strategy in hopes to make the best return. Just like teams and front offices scout players by running analytics, holding combines, and conducting interviews before they pick a player, athletes need to do the same before investing.
The advice below is a collection of talking points stressed by top investors and industry leaders we’ve had the fortunate pleasure of connecting with since starting this company.
Make A System That Makes The Process Quick
If you are an active athlete investor, you will have plenty of people reaching out in hopes for you to invest in their company. You may be overwhelmed preparing for your sport and also reviewing business decks and different pitches. It’s important to have a system that helps make the process quick. What’s your criteria? What do you like and what do you look for? What are your absolute red flags? Do you look it over and then send to your advisor and then make a decision from there? When you don’t like a deal how quick do you say no? These are all important questions you need have in mind when you are an investor.
Play the Long Game
If you want to get your money back quick you are better off going to the roulette table. When you are investing in start ups it’s vital that you understand you must be patient and play the long game. Are you willing to wait 8-12 years for your investment to bear fruit. This is something to seriously consider when you decide to invest money in a start up.
Investment Amount Very Important
It’s important to understand your investment amount. You need to know how much you will get in return for what you are putting in. What stage you are entering in at? What’s the minimum and maximum amount for the round? These are important things to consider because you have to have a basic understanding on what your investment amount will entail.
Regulate Amount Based On Return
Depending on how much you are investing it may be a waste of time for you and your particular investment strategy. If you already have a very high net worth and solid financial base, you should consider the value in throwing money into a company that won’t move a needle for you if it were to get sold. Could that money be used elsewhere? Could I use the money into another deal that will potentially earn me more? What will I gain from this potential amount of money? You have to consider the amount of money you are willing to invest based on the potential return. You don’t have the luxury of investing in every deal you see so you have to make calculated decisions.
FOMO (fear of missing out)
With athletes it’s constant competition. Even off the field, it’s about what car you are driving, what watch you are wearing, and now, what deals are you investing in. Don’t let that cloud your judgement and force you to go against your investment strategy or bite off more than you can chew. There will be deals you may miss out on that hit big. So what, you have to do what works for you and not because you are competing or worried you may miss out on something. More often than not you end up losing money because you want to join what your teammates are joining instead of sticking to the program that works for you.
Don’t think you are getting any money back. That’s the mindset you have to have when you become an angel investor. The odds aren’t in your favor. That’s why it’s so important to connect with successful investors and have a strong team that will vet deals to increase your odds with investing. This isn’t meant to discourage you but it’s to remind you how important it is to have basic financial knowledge and a firm investment strategy.
Don't Make Any Investments In Your First Year
Think of your first year of investing as a red shirt year. You are there to learn and observe so that when you are finally ready to get in the game, you know what to expect, what to look for, and how to navigate. Ryan Mundy, a former NFL player now Investor was once told by his mentor to not invest in any deals until he saw 200 pitches.