We're moving from a world of athlete-investors to athlete-entrepreneurs.

Time for a thread

1) Last week Patrick Mahomes announced his partnership with BioSteel, a nutrition company for athletes and exercise enthusiast.

The deal is reported to pay him a combination of cash and equity in the business. https://twitter.com/PatrickMahomes/status/1290618689264455680

2) Fresh off his $503M contract, Mahomes now has existing athlete-brand partnerships with Adidas, Oakley, Head & Shoulders, State Farm, BioSteel, DIRECTV, Essentia Water, EA and also a newly purchased equity stake in the Kansas City Royals ( @darrenrovell).

3) These deals only happen through on-field success.

Mahomes won a Super Bowl, was rewarded with a large contract extension, and is now strategically placing bets to multiply his fortune.

But is this what the typical athlete will be doing 10 years from now?

I don’t think so.

4) We are going to see, and to some degree already have, a shift in how athletes start investing their money.

The athlete investing cycle will go through 3 main phases, two of which we’ve already experienced.

5) The first phase is your typical athlete-brand partnership, where the athlete is compensated with cash for associating themself with the brand and promoting their products/services.

These deals have been happening since the early 1900s and will continue throughout the future.

6) The second phase is an equity partnership, which is similar to the first phase but includes a small portion of equity for the athlete to incentivize them with uncapped upside.

These deals are currently reserved for the top 25-50 athletes in the world.

7) The third phase, which is rare, is the athlete partnering with the best entrepreneurs in the world to create businesses where they have large percentage ownership stakes.

This allows them to fund the business themselves and capitalize off a larger equity ownership stake.

8) For example, the superstar combo of LeBron James, Cindy Crawford, Arnold Schwarzenegger and Lindsey Vonn teamed up with Main Street Advisors to launch a health and wellness company called Ladder.

A subscription service by nature, Ladder offers four core nutrition products.

9) While nutrition is an obvious choice, I think this will extend out to various other products and services.

Which baseball player will challenge Louisville Slugger?

What athlete will look to upend the recovery space?

The possibilities are endless.

10) In the future, audience will be the new currency.

Every DTC company that is able to drastically lower their customer acquisition cost through a celebrity co-founder will be at an advantage.

It won't happen right away, but the trend of athlete-entrepreneur is next.

11) As Beyonce said, "Pay me in equity".

Then again, the only thing better than being paid in equity is to be the one with the power to hand it out.

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