As the private equity industry begins to see professional athletes as potential limited partners, NBA All-Star and Melo7 Tech Partners founder Carmelo Anthony’s viewpoint is more relevant than ever. The Los Angeles Lakers forward’s take on investment decisions and what it could take to move more professional athletes into investments could be fodder for general partners keen for new pools of capital.
The genesis of his own eight-year-old firm began with a conversation with his eventual co-founder Stuart Goldfarb, who was then serving on the boards of WWE and Viacost. “I want to get into tech; I want to be a digital advocate,” Anthony recalled during WSJ Tech Live earlier this week.
Melo7 looks for opportunities to invest primarily in early-stage digital media, consumer Internet, and technology ventures.
“I really had to build it,” Anthony said. “I also had to really get in front of the companies and the founders to let them know I’m serious about what I’m trying to do.”
General partners can source funds outside of their usual hunting grounds by appealing to high net individuals like athletes, Brand Velocity Partners founder Drew Sheinman wrote in a recent piece for Mergers & Acquisitions. The concept is still novel in an industry comfortable building relationships with pension funds, insurance companies, and the PE veterans who socialize across finance. But the upside could be tremendous. The top 50 professional athletes took home $2.8 billion last year, according to Forbes.
As for competitors contemplating investing in the asset class, Anthony cautions, “You don’t have to do what I’m doing; I really took the time out to educate myself on this lane…. Do you just want to put your money into something and get a quick return, or do you really want to be in this business? …And for me if I feel like my personal values align with your company, then we’re off to a good start.”