Investing In The Sports Industry With Andrew Petcash Of Profluence

The sports industry is one exciting and promising space not just for athletes but also for investors. Andrew Petcash shares how their venture fund Profluence focuses exclusively on this industry – with zero outside capital. Joining Scott Kelly, he discusses how he looks for people who share his fiery passion about sports, allowing him to secure big opportunities and create a huge impact on sports teams and local communities. Andrew also talks about some of their most successful investments, particularly in a world-class festival that brings racquet sport players and enthusiasts throughout the world.

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Investing In The Sports Industry With Andrew Petcash Of Profluence

We got another sports one. This one is a little different. It’s a different sport and a different model.

It is Andrew from Profluence. I can say up to this point that out of all the fund managers I’ve interviewed, he has probably the most prolific distribution of subject matter content on the internet. If you go to his LinkedIn, he has deep dives into every nook and cranny of sports, from not just technology to high-end, but he understands what’s happening at the high school team level, the youth sports team level, and where these businesses are growing.

I got a chance to meet him several months ago at an event he hosted in Tampa. In addition to the fund, he has his Profluence community of over 1,000 members who are actively involved in sports at all levels, from coaches to team owners, league owners, product providers, and all of that. I then started tracking him on social media. You’ve got to go to his LinkedIn, everybody.

If you want to know about what’s happening in the world of sports at every single level, he’s done the homework. He’s either up all night, or he’s using the best sports AI agents in the business. He comes from a good background. He played high-level college basketball and then started this fund. He had someone to approach him to start the fund. He is expanding what he’s doing in terms of an ungodly amount of knowledge about what is happening in sports, and he’s applying that on the investment side.

Andrew Petcash is the Founding Partner at Profluence Capital. Prior to starting it, he founded and exited his college sports media brand, CAI, and built a private syndicate group, DraftDay, to source equity opportunities for professional athletes. He has been in and around all aspects of raising capital in the sports world. He’s helped Profluence’s media properties garner over a million social media followers. He graduated from Boston University with a concentration in finance. He was also the captain of the Terriers D1 basketball team and a Patriot League champion. Let’s hear from Andrew and Profluence.

As an avid sports fan, I’m intrigued about our guest, Andrew Petcash, from Profluence Ventures. Welcome, Andrew.

It’s great to see you again. It’s awesome to be here.

Andrew Petcash Of Profluence

Thank you. Before we get into what you’re doing in sports, let’s talk a little bit about your background. What brought you to what you’re doing?

A combination of two things, sports and building businesses. That’s how we got here. I played sports, a bunch of them, my whole life. I had the opportunity to play Division I college basketball at Boston University. Going back a step, when I was a teenager, I built multiple big YouTube channels and then a website that I sold. I was part of a startup that was all early NIL and doing these college athlete deals. I always had a real understanding, love, and passion for sports, and then taking things from 0 to 1.

That led to Profluence, ultimately. It started out as media for the builders in sports. We grew that to hundreds of thousands of followers. We had our own microphone. We were getting so much inbound and deal flow. We then built a community to start bringing people together. We’re nearing 1,000 members in that. You have the in-person side and the virtual. You have the resources and database. You started to see all these companies, especially early-stage ones, flock to you.

Ultimately, Profluence Capital Fund II was a small test thesis or micro fund of $3 million and was incubated by a few LPs. They’re all managing partners at large private equity firms, a few in sports. They were like, “We love what you’re doing. You have such a good touch on the early stage.” It was something I didn’t have on the roadmap, but it fell into my lap, and I love it. By knowing how to build media, attention, distribution, data, and a love for sports, and that growing as an asset class, I landed here. It’s awesome. We’ll dig deeper into that.

One main thing is that Profluence Capital Fund II is on the horizon. One of the first was a personal investor in the 1st fund, but already has an anchor locked in for the 2nd one, which there is still a little timing and negotiating to do. That’s hot off the press. I learned that not long ago. For everyone that’s tuning in or is involved in this game, you know how tough that can be at times. It’s quite exciting to have that at least as a base to start and launch this second one. I’ll probably run into the full cycle in the fall, doing millions of calls and all the fun stuff to make the magic happen.

All About Profluence

That’s awesome. I’m glad we got to break this news. Talk to me about the fund thesis. The reason I wanted you on the show is that you are prolific at putting out great content on trends in sports, whether it’s sports teams, sports leagues, sports tech, or consumer products in the sports space. Talk about how you are investing, what you’re investing in, and what you see on the horizon.

We break it into two sides of sports. On the first side, we call it sports IP. That’s the leagues, the teams, and the events. That’s the layer one solution where you’re going to. We like to have a little bit of our portfolio in that. Those aren’t going to be your 100X exits. They’re going to be more of the 10X or 15X. They’re going to be more linear. They’re more predictable. We love those as the base layer, so we’re going to do about 20% to 25% of a portfolio in that.

The rest of it is going to be your big, more consumer tech bets. We call that sports as a wedge. We like things that are sports-focused or starting in sports, but can go to broader markets and increase the TAM. A bunch of our assets may have started in sports, and now, they’re working with the Military, or they went straight to consumers in general. Maybe they went to healthcare. There’s a ton of great applications. Sports is a great entry.

We either call it sports as a wedge or sports as a platform. That’s going to be about 75% or 80% of the portfolio. Fund I looks across sixteen companies. That’s exactly how it looked. In Fund II, we plan to do the same thing. Sports is this emerging asset class. You’re seeing a ton of interest, especially at the highest levels of it with the pro teams. We see all the private equity funds coming in. We see the sovereign wealth coming in with what Saudi Arabia has done. There’s such a gap downstream of where all these things are being started and created. We see the rise of AI and the ability to build things quickly. Tech is the commodity, but sports have the community, the passion, and the IP.

If you can see things first and you can help get them rolling, we believe you can create huge winners in the next big things across both the IP and the tech. That’s where we aim to live in the early stages. We’re owning a large percentage of these companies for relatively small check sizes because of the value we can bring. We can push them through our media and get their attention. We can build them into the events and the community and introduce them to the right people.

That has worked in our favor that we didn’t start out to build a venture firm. We started out to build an attention engine, a media company, and a community, and then it was a natural plugin and fit. In the reports, I appreciate that one of the things was that if we’re going to be researching a space, we’re going to understand it the best by researching it, but we might as well put it in public to the people who are involved in our world. Our LPs and everyone close to them are always very appreciative.

For example, and it will be released by the time this episode comes out, we went and broke down the entire volleyball market. That took 11 or 12 hours of deep research. You understand it. You give the Cliff Notes to everyone else, but no one still understands it as well as us after that. It has been super cool, building in public to some degree as well.

Success Stories At Profluence

It’s fantastic that you spend the time to know these emerging trends in sports. Everyone’s talking about pickleball, but you’re talking about volleyball and other things. They haven’t been thought of as an investment opportunity, but are now becoming the place where money is falling into. Let’s talk a little bit about Fund I. You said you had sixteen investments. Maybe share with our audience some of the success stories and some of the trends that you’ve gotten involved in early.

It’s a 2023 vintage, later in the year there. We’re only about eighteen months in. The portfolio from a TVPI has already 2.5X-ed on paper. The IRR, because we’ve had some quick early markups, is 164%. From an overall standpoint, it’s been a big win. The hardest thing when you’re a small fund of under $3 million for the first one is that your check sizes can be very limiting. You can go give a company some money, but there’s no guarantee they’re going to go get more.

We’ve also been proud of the fact that we’ve been able to write early checks and get additional advisory shares. We’ve almost doubled our ownership in most of the companies by being like, “We’re going to write that $100,000 or $250,000 check, but we have the confidence you’re going to be able to maximize this, use this, and then go get that next round done.”

That has been good, but ultimately, as we build, we want to start to insulate ourselves and be able to write those lead checks to be able to go and put that $1 million, $500,000, or whatever it takes in. Our average valuation is about 7.4% or 7.5% post-money. We’re getting in at the early stages. We have a lot of negotiating power with what we’ve built. We’re not just capital. That’s been the overall win of the fund.

From a company standpoint, one of our out-of-the-box type investments is an event. It’s called RacquetX. They wanted to bring all of the racket sports to one spot. A lot of people don’t know there is something else called the PGA Show. The PGA Show does beaucoup amount of revenue per year, like $50 million to $80 million, to bring all of golf to one spot every year. We saw racket sports as the same thing. We invested in the company at a million-dollar valuation because of all the leverage we have.

We’re getting in alongside the founders to own a large chunk of this. They did $1.5 million in revenue in 2024. They’re working towards year three this 2025. Who knows? Racket sports, as a whole, if you put pickleball, tennis, paddle, and all these other things together, could be much larger and bigger than golf. Who knows? If we own a large chunk of this thing and it goes and gets to $50 million to $80 million of revenue, what could that sell for in 1 day on a multiple? We can crush the returns on our fund from some of these alternative investments that most VC firms will pass on. Most people won’t see it, or if they do see it, they’re seeing it at too high a valuation.

RacquetX did another round. We prorata’d at a $5 million valuation to expand into the Middle East and Europe. That’s a 5X. They’re killing it in revenue. They’ve proven the thesis. It’s a completely outside-the-box investment that most people see sports teams or leagues, sports tech, or companies in and around sports, but not the event that’s bringing all of racket sports to one place. That encompasses everything in one thing. We’ve also sourced a lot of the racket sports people for the event. As we see them, we’re like, “You’ve got to go here.”

How Profluence Chooses Companies To Invest In

You’re leading the charge in terms of trends in sports. Let’s talk to potential entrepreneurs who are presenting to you first, and then we’ll talk about potential investors in Fund II. For entrepreneurs outside of what they’re doing in a particular segment of sports, what other attributes are you looking for when you get involved?

I had a long conversation about this exact same thing. We were talking about how all the cliché things people say are often deeply true. The one that rings the most is we bet on the team or we bet on the person. I have a finance and real estate background by degree. Real learning to me is always when you’re in the trenches and you’re going through these things. I hadn’t seen a full cycle, so there’s been a lot of learning.

The biggest one has been that there are ten ideas for a certain concept. They might come over a 1 or 2-year period, but there’s always 1 standout person that rises above all of them. How do you pick them? If they can’t make that idea happen, the idea probably was never going to happen. That, to me, is the biggest thing about who you are putting around you and whether you are going to go all in.

Some people try to do other things while building it. I’ll never invest in a founder that’s doing that again. Maybe they’re not all into this idea. In the companies that are not doing as well, you rarely hear from the founders and rarely get email updates. The ones that are crushing it or the good founders are always giving updates, good or bad. They’re always calling. They’re always top of mind. Who’s top of mind?

There’s this persistence, this go, and this attitude, almost. It’s why a lot of those people who become super successful rub people the wrong way because they have this delusion and belief in themselves so much. It’s the same one I have, where it’s like, “I know what we’re building. It’s going to be this.” How do I find the same type of people? How do I track the same type of people? How do we capitalize them and go do this thing together? To me, that was the biggest thing.

A lot of it has become identifying those people, making sure they’re building enough in the right space and the right market, and having enough of the right people. Ultimately, we can find or do a lot of that for them. We can get them the attention, or we can find them the right advisor who knows the area well. They need to be the hustler who goes and makes it happen and scales it. That, to me, is ultimately what I’m looking for the most.

We’ve built this community. Every Friday, we bring in speakers. Once or twice a month, we bring in other investors in sports to speak. We’re always shocked. We have almost 1,000 members. Probably 500 or 600 of them are early-stage founders, and only 30 to 40 of them will show up. It says a lot about how badly people want it. I don’t think enough people want it badly enough.

They want to say they’re a founder or they’re testing. You’ve got to go all in. From the ones that have been super successful that have become my mentors or LPs who built these huge companies for big exits, huge private equity firms, or whatever it is, they’re all in. It’s like, “We’re going to maximize our chance.” Long-winded, but it gets me fired up. That’s the fun in it.

There’s a synergy between the things that make someone a successful entrepreneur and the things that make them a successful athlete. You got to play D-I basketball. You did that because you had some natural talent, but you spent probably more time in the gym, more time at camp, and more time watching tape to be the best basketball player you could be. The same is true for starters. Wouldn’t you agree?

100%. We always talk about how the parallels between sports and business are insane. When you take that athlete mindset and training and put it over into business, it’s quite interesting. There are not just parallels or advantages of being that athlete, but it’s the discipline, the ability to work together, and getting through things.

It’s also interesting. If you look at finding a company or finding an athlete, it’s all recruiting to some degree as well. The sports and business worlds are almost identical in most facets. It’s pretty cool to be able to use them as examples, and then to be the paradox that they’re combined into one. We’re learning what we used in sports to find the top people building in sports, but building in sports as a business.

Do you find that a lot of the founders that you’re working with had a background in sports and had some level of success in sports?

From an athlete’s standpoint, yeah. Most of them have been athletes, but a lot of the ones we’ve backed are coming into sports and building for the first time. We’ve seen that part of it is that the people who have been in for so long get conditioned to this mindset. They might have some of the right relationships. That’s okay. We can find advisors who have those.

Of our 16 founders, 9 have already exited companies, some for $300 million or $400 million, and some for $20 million. They’re all different levels. They’ve built things 0 to 1, zero to exit, or whatever you want to call it. They’ve identified problems whether through their kids in new sports, or they see it as a hot market, or they see another gap.

It’s in everyone’s lives now. Sports is everywhere. It’s the last thing remaining on TV from a live viewership standpoint. We’ve seen that having that outside perspective and then being able to put the advisors around you with that is huge. It brings a whole different mindset and killer instinct, to be fair. For the people who have been in sports for twenty years and want to build something, sometimes, it works, but a lot of times, they’ve subconsciously been programmed on what can or can’t work. A lot of ours might’ve been athletes, but they’ve built or been in different industries, and now, they’re building in sports.

Profluence’s LP Profile And Portfolio

Let’s talk to potential investors in Fund II. Let’s start with what the makeup of your LPs in Fund I is, and what would be a good potential LP for Fund II.

In Fund I, it fell out of the air as an opportunity from a private equity gentleman who wanted to put money into sports. He was like, “Let’s build a fund structure around what you’re doing. I see the potential.” The rest of the LPs in the first one were exited sports founders or partners at private equity firms. A lot of the people focused on sports, but we had some external ones. One guy runs the largest private equity firm in a different alternative asset. We’ve had guys who own teams. We have all kinds of different things.

As we go to the second one, it is good people who want a small stake in the earliest stage of sports, where, honestly, the real alpha is you. Maybe it’s not as sexy as going and putting something in a team or one of these crazy, new emerging leagues where all the valuations are ballooning. This is where you’re getting in at the ground floor on the next big sports, whether it’s paddle or cricket. India has a ton of opportunities. We have an advisor with his boots on the ground there, identifying and finding things for us. You’re getting in at the ground floor of what’s next at sports, and then also you’re getting all the tech enablement around it.

Ultimately, we’re looking for good people. The nice thing from Fund I to II is that it’s already accounted for. We’re going to have an elite anchor with others who are going to follow on. Most of our LPs from Fund I have already at least verbally confirmed, “Once you have the anchor, count me in for the next one as well.” To me, I’m not worried about that. Whoever wants to join the ride, this is your chance before we take this thing to the next level, and it takes off.

What does Fund II look like? Your 1st fund was $3 million. What’s your goal in terms of the size and allocation for this fund?

That has bobbed around a little bit. It’s going to depend on what the anchor ultimately decides to put on. That’s where the negotiation is, because we’re going to give them a little bit in economic terms. The main guy was an early investor. He was one of the first people who believed in us. We’ll take it from there, but it’s most likely going to be $20 million to $25 million.

There is some potential. We’ve had some other conversations where that could get larger, as there are some strategics that could also be anchors. They want this early stage, and the momentum of this could push it forward. They also want to place some of their people. A lot of the later stages are trying to go a little earlier, and they want to use us. There’s some nuance on the backend. Realistically, this is going to be $20 million to $25 million so we don’t get too big too quickly. That’s a good sweet spot for the next stage of learning, leading, and co-leading. I’ve had a few combos where people want to put in way more than that, and I don’t know, honestly, if we’re ready for that.

Why Choose Profluence

Fair enough. I appreciate your candor from that standpoint. For people who are interested in investing in sports, why your fund, and why now?

It’s simple on two fronts. Sports is going to be one of the best-performing assets. If you can get in at the earliest stage in the earliest things, that’s where the real alpha is. It’s resistant to AI. It’s resistant to any media changes. Nothing is going to take away sports. It’s not going to be automated. It is a linchpin to everything else. It goes to so many other industries. It’s only increasing day by day.

Why us? Everyone else builds off capital, their MBA, or all their twenty years running as an associate at a VC firm. We’re actually real builders. We’ve built this thing from scratch. We’ve built something that no one else has built, which is the media engine and the community. We’ve built the greatest distribution and information advantages of anyone.

Some of the other firms are trying to do it, and they are failing at a great rate because that’s not what they’re built to do. They’re just capital allocators. Capital allocation is one sliver of what we do well. We’re going to get the best terms, and our LPs benefit from that the most. We doubled our ownership through advisory shares in the first fund. We give all that to LPs. We don’t take that. I don’t take that as a GP myself. I go, “You believe in me.” If we got an extra point in that company, that’s going to the LPs because the only reason we’re here is because of you.

Amazing Impact Of Investing In Sports

I love that feedback. That’s the reason why we launched this show. It’s to showcase non-traditional investors investing in non-traditional ways with non-traditional founders and LPs. I appreciate that insight. Anything else you want to share with our audience?

I appreciate you tuning in. It’s awesome for those who support the ecosystem from the founder or investor lens. You are what pushes innovation forward as people like yourself. I always say to our LPs when I text and call them, “Maybe I can’t always do that forever as it scales out of myself.” For example, we own part of an emerging soccer team. I go, “The reason little Johnny is going to have a chance to be a pro athlete is because of you, the LPs. You don’t always see the downstream.”

That’s why we started doing more events and taking people to whatever. It’s cool. Think about sports from that lens as well. Not only is it going to be a great investment opportunity for you, but the impact it provides across the world is pretty insane. It’s been awesome to show up to a game and be like, “Our LPs provided this capital, which then provided us the opportunity to go and build this thing.”

A kid then has a chance. Think about how sports impact his life. Who knows? Maybe that kid goes and builds the next great league or tech in sports. There are a lot of factors in it. Think about that. Number two, I appreciate everyone on the emerging manager side, whether you’re in sports or not, or whether it’s a space or whatever. This is where true innovation happens. It’s what makes the world fun and advancing.

Get In Touch With Andrew

I appreciate that. Where can people learn more about Profluence Ventures and get access to your great content?

Profluence.com is the best spot. You’ll see the places to go. You can look at our portfolio on the capital side and everything that’s a part of our ecosystem. On LinkedIn, @AndrewPetcash is also a good spot. I’m pretty active there. I’m one of the Top Voices. I have 30,000-plus followers. That’s where it all started from a Profluence side. I’m responsive there. It’s a good place to stay in tune with everything that we’re doing, but more so, my whole thing is 90% value, 10% promotion. You’re going to get a ton of insightful things about this space. If you want to go deeper with me or whatever, then it’s pretty easy.

Thank you for being on the show. For everyone tuning in, make sure you follow Andrew on LinkedIn. He’s got some phenomenal content. Go through his website. Follow, like, and share this show. Andrew, thank you for being on the show.

I appreciate it.

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What you were saying at the beginning, and then he was talking about all of the content that he’s got, those followers, and everything? In this world, this is what it takes to successfully fund something or sell it successfully. It’s as much of the hype as it is the performance of whatever it is. Both things have to be aligned. He’s making smart choices.

The reality is that in order to get that alpha or get those higher returns that these smaller funds get, they have to know their stuff, and they have to be very concentrated. That’s exactly what Andrew’s doing. He is all-in on sports at all levels and all stages. That’s what he looks for in his founders. He’s looking for people who have the same passion about what they’re doing in sports as he does, as part of his criteria. He practices what he preaches.

We were talking at the webinar that we did. Brian McMahon was talking about injecting everything with hypergrowth. They built a model by which they can inject it with hypergrowth with their own media company.

What he’s done is that he has built a content engine, a community, and a platform to invest in, and they all mill together. His portfolio companies have access to the community. They have a team, with Andrew and his team, to give them access to all kinds of information. It is all-inclusive. It’s that three-legged stool with all the legs at the same length.

The other thing that I thought was so funny about what he said there is that he called it a delusion and a belief in themselves. I would’ve termed it as this cockiness to professional athletes and founders that is very much aligned. I love that it was called a delusion.

It’s interesting. You and I have dealt with founders and investors for decades. Humility is something that is hoped for, but not always expected.

Not often found.

He has a good perspective. Andrew is a smart guy. He knows it, but he realizes that he’s got to surround himself with smart people, too.

My daughter says, “You think you’re all that.” That’s what my teenager says. He likes that they think that they’re all that, but he knows that they’re not, and they need him.

I used to call it unjustified arrogance.

I like that one, too. It’s so characteristic of it. When they get so delusional about it, though, that’s when you have problems. You have to look for that balance between being delusional and coachable at the same time.

You have to be confident and coachable simultaneously.

There’s been some sports gaming betting. You’ve covered in and around the sports arena for many episodes here in the series so far. You have a particular interest, right?

Yeah. I’m interested. I played sports and coached my kids. I did all those things and made some investments that had some success in the space. The reality is, if you’re not talking about AI, you’re talking about what’s happening in sports. You’re finding leagues that people don’t even know about raising capital.

Who would’ve thought a few years ago that pickleball would be the financial phenomenon that it is now? I saw a valuation of college sports teams. We interviewed Sean Clifford for Penn State. The Penn State football team was valued at $1.2 billion. They’re a college football team. Sports have been a great investment for a long time. The Lakers will attest to that. It’s beyond just the major leagues that you’re seeing. If it’s not AI, it’s sports.

The reality is in the media. There is nothing else that can command a live audience. It was announced not too long ago that Stephen Colbert was getting canceled for financial reasons. Whether you believe that or not, it doesn’t even matter. I read that they were the number one DVR’d show. No one in advertising wants a highly DVR’d show. It means you skip the commercials and the ads. If we don’t have live, we don’t have ads being played in such a way. The only game in town to get advertisements and your brand scene is to be on something live.

At the time of this recording, Disney and the NFL put together a deal for the NFL to have a stake and for ESPN to take over the streaming rights of some NFL programming. When I’m watching the financial news, it’s either news about some obscenely valued AI company or some obscenely valued purchase of a professional-level team.

The other thing that we can’t forget, because this happens everywhere in retail and everywhere, is that they recognize that women love live sports. That injection of it is a high consumer base. It’s brand valuable for that. My sister-in-law is a part of Eero, which is the Wi-Fi router device that is at Amazon. She’s the head of their marketing department. They have a significant investment in NASCAR. She has managed to turn all her siblings, including my husband, into NASCAR moms and dads or whatever you want to call them. That is a huge live investment sport. When you miss a second of the race, then it’s over. Those are things that are going on, so we are going to have to get some NASCAR people in.

We’ll put that on the list.

We appreciate you tuning in. If you want to see who we’re covering or what we’ve covered, and you want to catch up with them, you want to get to their website, or you want to find out about their capital funds, you’ve got to go to EmergingManagersPodcast.com. Come back and subscribe so that you come back again and see who we’ve got as an emerging manager.

Important Links

• Profluence
• Profluence on LinkedIn
• Andrew Petcash on LinkedIn