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Startup investors can an angel hit a homerunDocument Transcript
1Startup Investors: Can An Angel Hit A Homerun?http://wisepreneur.com/entrepreneurship/startup-investors-can-an-angel-hit-a-homerun Last month I was working on my computer, trying to find an investor for one of my clients, while at the same time watching the Soccer World Cup 2010, I had an idea! This idea concerns the occupational retraining for the high-level sportsmen, and I would like to share this idea with Wisepreneur’s readers. In many sports, the career of high-level sportsmen is quite short. Before the age of 40, they have to retire and find a new occupation. And this is noteasy! When you lived for competitive sports for so many years, it is difficult to find new sources ofmotivation. And it’s known that some professional athletes suffer from depression after their sportscareer.As you may know, start-ups and small enterprises with technological research and development(R&D) activities are promising either in term of business potential of growth, or in term of socialimpact due to their breakthrough products (new technology, new drugs …) and job creation. But onthe other hand R&D is expensive, and these kind of companies have a big need for capital. Indeed,R&D can cost more than 1/3 of the revenue of these companies (pharmaceutical & biotechnologystart-up can nearly invest 100% of their budget for their R&D!). Before having positive cash-flows,most technological start-ups are under-capitalized and have greater risk of failure than other newbusinesses.What’s the relation between start-ups and the occupational retraining for the high-level sportsmen?A possible occupational retraining is of course to start their own business and to create their ownnew job. But I am always disappointed by the kind of business that former sportsmen are involvedin! Indeed, they open restaurants, night-clubs, bars & pubs. What a waste of personal branding!Furthermore, these kind of businesses have low profitability, and have minimal social impact.So here’s the idea that I wish to share with you:At the end of their career, these professional sportsmen could invest as business angel investorsinto start-ups with technological projects (high-tech, Pharma-biotech-medicine, clean-tech …). Inaddition to holding stock of the start-up, these sportsmen could play an active role in thedevelopment of “their” company. Indeed, due to their positive image, they could promote the start-Ari Massoudi / Consultant Strategy of Innovation / www.strategy-of-innovation.com / www.linkedin.com/in/arimassoudi
2up either directly by supporting the marketing strategy, or indirectly by enhancing the intangiblevalue of the start-up.Let’s dream together:Michael Phelps, 16-times Olympic medals in swimming, is a partner and a member of the executivemanagement of AlzheimStop, a biotech start-up. He holds the function of Public Relation manager,and he promotes a new drug against Alzheimer developed by his start-up. This would be muchmore attractive than if it’s done by the scientist or engineer who has found the new drug, isn’t it?Someone could say that this idea is not original first, because business angel investment alreadyexist, and second, wealth managers in private banks provide advices in investment strategy to theirclients among whom professional sportsmen with high incomes. Regular investors are peoplehighly implicated in business such as CEOs and senior executives of companies, or professionals offinance. A client of a Private Bank is not directly involved in what and where his money has beeninvested. The wealth manager invest in funds such as pension funds, life insurance, hedge funds,private equity funds, funds of funds. This is a pure financial activity.The purpose of what I propose is to support the occupational retraining of professional sportsmeninto a way that could have meaning, for them and for the society, and in the same time, to findmoney for technological start-ups. The originality of the idea is: 1) to connect high-level sportsmenat the end of their career to start-up project holders (scientists or engineers), and 2) by anappropriate information and training, to transform these sportsmen into business angel investors,active business partners and managers.Ari Massoudi / Consultant Strategy of Innovation / www.strategy-of-innovation.com / www.linkedin.com/in/arimassoudi
3You may say that the last point already exist, it’s a MBA! But what I imagine is something moreintegrated and adapted to sportsmen, in a unique place and over-managed by a dedicated businessincubator, such as a spin-off of a university. The mission of such an incubator could be: • The sport department of the university will help the incubators to contact professional sportsmen, former students/athletes of the university • The science department will select best projects for technology transfer into start-up businesses • Economics and management faculties will provide adapted business training to former sportsmen; they could also train scientists and engineers to become CEO • The law department will support the creation of a fair start-up (stockholders’ agreement, industrial property, partnership contract …) • The economics and management department or business school of the university will support the strategy, and the marketing will help to build an executive management team by connecting the graduates holding a business diploma (economics, management, marketing, finance …) to the scientist project holder and the former sportsmen •… and all which will help in the success of start-upsWhat do you think about this idea?Ari Massoudi / Consultant Strategy of Innovation / www.strategy-of-innovation.com / www.linkedin.com/in/arimassoudi