Episode Transcript
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(00:00):
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This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing
(01:07):
to our audience Andrew Petcash, who is one of the
most prolific content providers on LinkedIn.
I started following him a couple of years ago. He's a VC now,
ex college basketball player and
venture capitalist. But what I really view him as is
he could break down industry categories and segments and where the
(01:30):
market's going and trends like I've never seen before.
So kudos to him for articulating and
understanding a market. And I feel like he definitely knows what's around
the corner and what's about to come because he understands where it is today. So,
Andrew, thanks for coming on the show. Appreciate Pete. Yeah, great to be here and
appreciate the kind words too. Yeah. So could you just give a little background
(01:51):
on, you know, being an entrepreneur coming out of school,
talking about, you know, your Boston College, your Boston University,
you know, roots and how you decided to kind of become
who you are today and, and why you share all this information, you know,
freely that, that I view makes you kind of the expert for
sure. Yeah, I mean, I think it's a twofold. Both my parents were
(02:14):
entrepreneurs, so it's in the blood. And then I built a big
MBA YouTube channel when I was a teenager, so
I knew how to build media. It always was interesting to me, like,
hey, I can create something. In five years later, people can still
be watching it, I can still be making money from it. And so it always
just planted that in my head and obviously went and played college basketball at Boston
(02:37):
University, which was amazing, actually. 2020, we made March
Madness, but it was the one year in history, it got canceled,
which sucks. So it always brings up weird feelings this time of year,
but my bracket's doing really well. I got the final four
correct. I just picked all 1 seeds this year. I was like, screw it. Yeah.
And so hopefully come out on. On that side. And
(02:59):
then, yeah, coming out of college built another media
asset in college sports. I got Aqua hired by
a sports company in Texas. And while I
was there, I was thinking the next thing. And so I just started posting on
LinkedIn, on Twitter, building my personal brand, seeing sports as this
increasingly great asset class and opportunity. And I was like, hey, if I
(03:20):
can go become a thought leader, I can get way out ahead of
everyone else and people will bring everything to me. So leverage that
to build a community of. We now have 700 plus founders and
investors in there, all within sports. Uh, and then
because we sit in the center of everything, we built this great ingestion engine,
which a lot stems from my personal brand, which, you know, I have a good
(03:42):
reputation and trust in the space now, which I hopefully, you know,
can continue to keep. I think that's the most important thing. Was able to. To
go raise a good first venture capital fund to start deploying into these
opportunities now. Yeah, I was, yeah, I always wanted to be
a thought leader. And then I also said, okay, I'm a thought leader now. I
want to be an action leader. So I think you've kind of tipped the scale
(04:02):
to like, you're an action leader now. And just for our audience, we'll have
the links up, you know, on LinkedIn.com Ian
Andrew Petcash that you should definitely follow. But
some of the things that you're talking about, you know, we were talking about youth
sports and that there's gonna be a lot of investment opportunities and this whole
nil was gonna kind of cascade down or waterfall down
(04:25):
into high school, more colleges, getting more money,
you know, and you started to lay out like, here's the different categories and here's
the areas to invest in. So talk about how you do
your research, some of the market sizing
that you do, which I don't think is really available, and you kind of like,
(04:45):
kind of figure out what that. That TAM is, you know, total
addressable market without really having any other primary
data done. If you kind of just share how you think about building that up
and when someone's looking at a market, you know, h. How you address
that and kind of support that. Yeah, I mean, most of the data
comes from a few different places. Number one, it comes from Industry
(05:07):
leaders that are even deeper. So people that have built and used sports for
20 plus years, that have exited companies, you know, built hundreds of millions of
dollars in revenue companies, hey, what are you seeing? How big do you see it?
And then doing some internal calculations or data and
then working with some of the data providers who they want
us to go share it because we have the audience, it makes them look good,
(05:29):
it gives them credit. So now that we do stuff like that, we
get a lot of the data just fed to us and then I have back
end databases of like, okay, like I have this.
When does it make sense to share it or what else do we want to
put content around it or make investment decisions around it? So yeah, I
mean to how you brought up like sharing versus
(05:50):
keeping private is always a big internal discussion
or even just discussion in my head of like, wow, am I giving away too
much now? Because even though you're making moves and you know you're progressing
forward, you know, by you posting something, you're still giving something to someone
else that's going to go build off of it. But that's where I think you
just get that abundance mindset where it's like, hey, they can go take it, but
(06:11):
we really know it, we really understand it. Yeah. And you
know, go add value to as many people come back around. Yeah, so,
so, so from your like content strategy if you will
and profluence, right. Pro. Profluence. Is that
pronounced productly? Yeah, so profluence capital, you know, you're
basically sharing all this information as the action leader
(06:33):
and that kind of creates the credibility the way I'm playing it
back to you that if I am in one of the sectors
or, or subsectors that you are referencing and I know you have money,
then not that you're like a, you know, independent sponsor, but you actually have capital.
Like I want to partner with you because I feel like you get, you understand
me. And if another private equity firm or
(06:57):
venture capital group has some 22 year old kid, you know, cold calling me
or email me with like a form letter which a lot of my clients get
and they're like, oh, this private equity firm's interest for me, I'm like, bro, it's
a form letter, okay. Like I could tell you where it's like insert here
like your name of you and the name of the company. Like that's not somebody
who like has done any work on anything. And
(07:17):
sometimes I get that while we're under exclusivity on a deal. So I have a
deal in place. Someone's like, hey, man, I just got, you know, these five VCs.
Who. Interesting. Interested in me? I'm like, dude, there's a Salesforce link
that. That actually merges this and they're sending it to you. And it's like, kind
of the same from two of the four groups, so they're not really interested in
you. Like, stay the course. Yeah. So hearkening back to, like, you're the
(07:40):
action leader, got a fund. I'm putting this information out
there. And now you're actually triggering the targets
instead of saying, like, hey, I'm sharing this information with. With my competitors on
the VC side. You know, my call is going to resonate
or my introduction to them is going to resonate, vice versa, because
I'm the expert and they're like, trailing. Yeah. Is that the way to
(08:02):
think about it? Exactly right. And I love the word action leader because thought leader
just implies, like, oh, you're putting good thoughts, but action leader implies,
like, hey, we're putting thoughts out, but we're taking action. Like, we're doing stuff around
it. So that's what I always say of, like, the content is going to continue
to get better because, like, we actually. I don't just say,
hey, this space is interesting. Like, we go deploy capital into it. Like, we're building
(08:23):
in the space too, which is amazing. And then to your
point, yeah, like, if we think an area is interesting, we're going to put content
on about it, because then people are going to start to come to us, hey,
I'm building this in that space. Right. And I can do it about anything and
be like, hey, I find paddle interesting in Europe.
Who's going to go build it in America? Well, and I'll get all the decks
(08:44):
and companies and people that will come and, you
know, then we'll have podcasts with some of the top people, and you just create
this amazing flywheel is how we like to. To
describe it. So, yeah, I mean, you're spot on. That's. And
profluence itself, the word means to tell a
narrative in an abundant way forward. So it's sort of like a little cool play
(09:05):
of like, hey, we're using words and narrative to create this abundance or
what we're trying to get to.
This is Pete Moore. I want to let you in on a little secret. There's
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(09:29):
or Giving away shakes or giving away T shirts. What you want to
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deal. There's something called Rewards Vault. The Rewards Vault is going
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(09:52):
to target those members, and you're going to reward them inside your club,
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spa to get them to become loyal, to get them to pay their
monthly dues and to be rewarded properly for the
actions. A lot of companies are cutting back on rewards. You shouldn't be.
Promotion vault. Your answer, Trust me, this is real.
(10:18):
So I started Integrity Square 15 years ago tomorrow. And
I used to live in Union Square in New York on 15th and
5th. And prior to that, I was dating this girl.
Woman. She bought me a rock that had the word integrity
engraved in it. Cause I always loved the word Integrity Avenue. You don't. Right. So
I put those two together. Cause you say, let's meet in the square. And I
(10:39):
say now, like, if you're a client of Integrity Square, you're
protected by the square. Kind of like an old school
way of thinking. I was the goalie back in the day in soccer, so
I wasn't responsible for us winning. I was responsible for us not losing. So I
want to be like your advisor to, to. To. To play that forward.
Also, during co, we wrote a book called Time to Win Again,
(11:02):
which is like good to great meets, where's waldo. And it's 52 takeaways from
Team sports to ensure your business success. So Dave, make sure we send
it out to Andrew right after this. And it's basically like, take timeouts.
Nobody takes timeouts in business. People do it. Sports, you
know, know your competitors, you know, signals like everyone
does, you know, scouting reports. But in business, you don't really do scouting
(11:25):
reports the way you should and then take the points. So if
somebody wants to buy your company and you can sell for 20,
I could help you sell for 20. You want 22? I'm like, trust me, take
the 20. It'll change your life. Not the 2 million after tax.
So we'll get that out to you. So let me ask you a question. Being
a venture capitalist and his background. I was
(11:46):
a venture capitalist. I still am, but. But not in a good
way. I became an angel investor in businesses. And
I think that's a great Way to lose a lot of money. Because you're basically
like not questioning the entrepreneur and you're
basically saying, I believe in you and I'm not
passive, I'm an active investor. But I say yes.
(12:08):
Too much is what one of my weaknesses was.
So being venture capital one, you know the percentages
of what your batting average is going to be on a deal by deal basis.
However, you get five or 10 and you hit one home run
and you know, you basically you return the capital. So
(12:28):
how do you screen one? What's your like
if I come to you with a PowerPoint slide or deck and you
say, hey, you know, what do you got? I'm like, I got an idea, it's
on paper. Or hey, I got a pro, I got a beta or I'm already
in the market. How do you kind of calibrate on your end
what's too early? Because venture capital, there might never be a time was too
(12:49):
early and then what's too late? We're like, hey man, I can't really help you
or that's not my, that's not where I want to play. So how do you
think about that? Yeah, another good question. So first, I think we
all do a lot of things off who we learn from and who our mentors
are. And so my mentor is a gentleman that runs a big private equity firm
called Merit of Capital out of New York. And he very much.
(13:11):
You have to sometimes try to fit in a box. Are you a pre seed
seed investor? You private equity? More. It's like, but we don't try to fit in
a box. Like we try to just do some of the best deals.
And so we split our portfolio into two sides. There's really
more the VC venture side and then there's really more the pe, like
smaller returns but much more linear. We know we're going to go get wins
(13:34):
there. So 50% of our portfolio is into teams, leagues,
events. We call them layer one solutions in sports. So we're going to go, go
drive 5, 10, 15x returns and we're, we can pretty
much guarantee we're going to return our fund through just those and then we can
go swing at the venture side and all we need is one of
those to go crush it. And then we have a top, you know, quartile
(13:56):
top 1% returning fund in the space
or just even in, in general industry standards. And so already we're a year
in again, it's all off markups and stuff. But we have,
when you put both sides together, you know, we're already in the top.
We're top quartile easily. And then we looked
at. To your deck question. We looked at 1500 companies in year one.
(14:18):
We did 13 investments. So it's under 1%,
you know, that we're. We're executing on. And
yeah, I mean, we know. We know the sectors. We know really well. And then
another strategy was for the first fund, I went and people were
like, hey, you got to build an advisory or, you know, you got to do
something there. And so what I did is I wanted to go get private
(14:39):
equity partners as both LPs and advisors, and
then some exited sports founders. And so then I went and got all the subject
matter experts that now have skin in the game, and I gave them a little
bit of, you know, boost on top to incentivize
them more. And so now if there's a space, I don't know well enough. Okay.
Like, let me get my. Let me bring in another opinion. And so I feel
(15:00):
like we've made really good decisions across the board. Again, we'll see. There's a little
time lag, but so far, so good. Yeah. So. So
one of the things that I had a problem with is that we made seven
investments. We'll have two. Two big wins. Yeah. One.
One will be a home run, one will be like a triple, and then there's
probably a couple that we. Well, it's two. We had to shut down during COVID
(15:20):
because there was a, you know, studio concept, what was
called Switch Playground. So you switch to, like 20 different
machines every. Every two minutes with a partner. So if ever,
if anyone had Covid, everyone gets Covid, you know, so there really wasn't
a way to pivot. That business called out of South Africa that we
brought to the U.S. have you had any situation yet?
(15:43):
We had to either shut down a company or you had to say, look, you
guys had these. These milestones or these goals, and we didn't
hit them. And what I was doing, I do an education
platform called Halo Academy. And what I tell people is like, the way
things used to be done, or no one really thinks about this anymore, is like,
you get a series A round, okay. Or you get a friends and family that
(16:04):
goes, well, you get a series A. Then that experiment
goes, well, you get a series B, then you get a series C. But all
those things are based on, like, I'm trying to get from a point A to
point B, and if I get there, then I'm. Then I'm eligible
to get another round. Whereas some of these Companies
get a Series A and that's like, hold on man, like now you need like
(16:26):
a bridge loan or you need me to meet, cover your payroll and I'm like
your angel investor. I'm like, I didn't really sign up for the like
access to my checking account. You know what I mean? So, so have you
had any of those experiences yet of like how you deal with
this portfolio that not everyone's going to be successful and I
gotta, I gotta like cut it and I gotta tell the entrepreneur like, look man,
(16:48):
it's not personal. Yeah, no, we
haven't, fortunately. But we've had some pivots and again like how our
portfolio is constructed. We take larger checks, larger ownership
shares and the more linear IP plays where we control them a little bit more.
The events, you know, USL team and pro soccer in the
US like you can see it, you can feel it, we're in it. And
(17:11):
so those have been great like this. On the tech side, we're taking smaller checks,
smaller minority investments where we tell them like, hey, if you need things, put it
in front of us. But we're, we're small strategic
investors in those companies. You guys have elite investors that are writing the million, two
million dollar checks. Like go to them if you really need to figure something
out. Like we can help you on the real sports specific. And a lot of
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most, most of our companies have said we're, you know, their most
helpful investor because we can also get them a lot of attention from our
channels from a marketing lens. We also just have a huge network
to get them more investment or to get them more customers or whatever.
But yeah, on that side, you know, we'll hop on, we'll help. But
like we're, we're very passive in a lot of ways because we're like,
(17:55):
hey, we're just hoping one of the 15 of you goes and wins.
But on this side, we need all of these to win and these are all
going great on the IP side. And so that's,
that's how we've done it for the first fund. We'll see as we progress what,
how that changes or evolves. So, so it's a, we'll just do a public
service announcement here to our audience who's listening to this, this show right
(18:16):
now. If you're going to invest in early stage deals, try not to do it
directly as a, as a, an individual investor into
either a friend or someone, you know, make sure that there's an investment
group, that one is going to help support the company as a Lead. If you're
just putting in 50 to 250 grand, who's actually checking the
valuation? Who actually has some level or semblance of corporate
(18:38):
governance over the business that you're investing in? Because
I've got a lot of, what I call, Andrew, expensive
wallpaper of stock certificates that, you know,
it probably could have been managed differently when I
went into this, like, VC foray or put money behind your
fund, you know, 10 years ago and say, hey, let these guys run and manage
(18:59):
it. Because I got a day job and I thought I could also bat a
thousand when I, when I turn 40. Because I thought I've seen all these
movies before. Yeah, well, we also see a lot of, like right now,
family offices, even trying to enter sports and do it themselves and do
direct deals. And we go, great, go ahead. Like, it's going to be tough to
navigate. We know they're going to come back around and just give. They're going
(19:21):
to invest in us to go make the best decisions because we know it, we're
really deep ingrained in it. But right now, even again, sort of similar
to you said, like individuals, hey, I want to do some sports deals. Why, why
would you go? Right. And this is just my opinion and obviously I'm biased because
we have a vehicle to do it. But it's like, and I went in angel
invested way too much at my age of my net worth and angel
(19:41):
investing into seven deals too, before I went to the fun side. You try to
make me feel better. Thank you. Yeah, yeah, so, but it's like,
I would have much rather taken those seven that I really had. No,
like, and just put all that money just into a vehicle and know,
hey, yeah, maybe I'm not going to hit that one direct. And it's going to
be a lower return, but it's still way higher than any. It's way. It's going
(20:03):
to be way higher than the S and P than anything else. Right. And so
it's like, it's. I would urge most people, yeah, just, just
go into a fund but make sure it's established, make sure there's good people around
it, still do the due diligence on that. But yeah, I mean, all of our
investors, like, I mean, a lot of them are exited sports founders. They could literally
probably go do it themselves, but they understand, like, hey, let's, let's go
(20:25):
do it together. It's better that way. We'll drive. We'll drive.
You know, more returns and, and more impact in the space. So, yeah, it's A
good call up foreign.
This is Pete Moore. Here's the last tip for you of the podcast.
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Just as good as the workout.
So we got a couple minutes left here. When you take a look at what's
happened in college sports and you said, hey, I got my bracket right? I got
(21:55):
the top four teams that are all number one in their, in their region
going to March Madness to the final four. You know,
as you take a look at this whole nil and basically like I was
watching, I don't know if you watched. Did you watch A red storm rising on
Vice Hulu? Yeah, it was
basically. And it was great if anyone wants to watch this. But he was like,
(22:17):
you look Kadari. You know, we, we blew SE hall out of the water was
what we're paying him. So you know, he basically better hit that shot because you
know, and it basically like chimed to me is like these kids are.
There's the term student athlete should basically be a
retired term. Just like I want to retire the word wellness because
the antonym of illness. So it's like if you're not sick, you're okay. And
(22:38):
I'm just like, that's why we came up this term Halo health active lifestyle outdoors.
We're trying to create the halo sector. We're not trying to create the wellness industry.
But these guys basically work for the St. John's athletic department. Right.
That you know, if you look at the at all players in college sports now.
So how do you see that as an opportunity? Do you think that
in a year or two, five years from now, profluence owns 20%
(23:01):
of the university. You know, UCF's athletic
department. Is that, is that a viable, like, result of the
nil? Yeah, 100%. I mean, I think part of the reason we got in
is all this goes downstream. There's a ton of opportunity, both in college
and then into youth and amateur sports, but also international.
There's, I mean, there's no, like, if you look at India, for example, there's no
(23:24):
collegiate system there. So, like, it's a big undertaking, it's
a big, you know, challenge. But if you can go build even a similar
system there, I mean, you're, that's a massive opportunity. So I think
that's what's cool about sports is it's going more global and it's still
very underserved and under built in a lot of areas. And then even looking
in America, you have FIFA World Cup 2026, and you have the Olympics, L.A.
(23:46):
28, and you have the Winter Olympics. I think it's 20, 34,
2 or somewhere in there. Right. And so we have this great
10 to 20 year run and we're at the ground floor of it.
And so, yeah, I mean, there's a ton of opportunity. Again, you
just, you have to really study the space and know the
nuance and bring the right people. Because sports also,
(24:08):
it's, it is very relationship based. And if you don't have some of the right
relationships, you might have the best product, you might have the best service, but
you don't know the right person so you can't get what you need to get
done. Which is, I think, unique to, compared to a lot of other industries.
Yeah. All right, man. Well, look, I appreciate you coming on. I'm one of your
loyal followers. Keep up the content and the work. I love that you share it
(24:30):
with everyone because it helps frame the opportunities. And I agree with you
that the more interest there is it kind of, please, to your
advantage long term because it could be private equity firms that might read this and
say, hey, it's too early and they'll be the buyers of, you know, some of
your investments. So. Exactly. Yeah. All right, man, Keep up the great
work and action leader. That'll be your term in Halo. And we're going to
(24:52):
get you a copy of our book that you'll, I'm sure you'll thoroughly enjoy.
All right. Awesome, awesome. Thank you. Appreciate it.