“Champions,” said Muhamad Ali, “aren’t made in the gym. Champions are made from something they have deep inside them – a desire, a dream, a vision.”
A legendary athlete like Ali probably realized early in his career that the true source of his motivation, passion and success was his spirit and unstoppable determination. Many passionate and determined athletes from different fields have pursued second careers in business and entrepreneurship, some continue to be champions.
Just this week, veteran NBA Star Omri Casspi launched a unique, early stage VC fund and officially joined this A-list of athletes. For over a decade, Casspi was an NBA player as well as captain of Israel’s national basketball team. Even prior to his retirement last year, he was determined to join the growing Israeli entrepreneurial scene and become an active angel investor (DocuSign and DayTwo among others).
Upon his retirement and return to Israel, Casspi decided to ramp up his activity in the early-stage tech scene.
Today, after a few successful investments under his belt, he has co-founded Sheva, a $50M early-stage investment fund together with veteran early stage investor David Citron.
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“The game of basketball has given me so much, more than I ever dreamed of,” he shares as he considers the path that led him to his new role. “Following an unbelievable career of over 25 years, including 16 years as a professional basketball player, I was determined to expose myself to new sectors, and grow as an individual. I feel that my old and new career paths have a lot in common, as ambition and personal drive are the key to success in both. It’s no surprise many of my colleagues have taken this similar route.”
Sheva will focus on pre-seed, seed stage and opportunistic series A investments. The fund intends to make $1M-$2M investments in each of about 20 companies. It has already invested in fintech, cyber security and web3 ventures companies.
Former athletes typically possess highly transferable skills and a very unique mindset that is fueled by perseverance and geared to take on the obstacles. But while many athletes are known for their entrepreneurship, some have still failed or have proved to be less business savvy than others. Caspi believes that the difference between successful and unsuccessful former athletes lays in their curiosity and their ability to transfer skills from one area of expertise to another. “When we assess companies, the two main components are the team and the idea. My experience as a professional athlete and the captain of a team helps me assess founders: Who really wants IT, how would they deal with adversity, are they willing to go the extra mile etc, There are a lot of similarities between a champion sports team and a champion tech company team and my experience helps me spot different elements in a different way.” Though many former athletes-turned-businessmen have this knowledge and experience, they do not always manage to transfer them to new territory.
Slam-dunking In A Different Net
“I’ve always been a hard worker; the first one at the gym, and the last one to leave. I believe that the same level of energy is required of an early-stage investor, and I’m eager to bring it as well as my wide network to provide real value to founders,” shares Casspi.
The former NBA star and his partner are confident that their new fund is an unconventional one. “VC funds have traditionally viewed ownership, i.e., owning a big chunk of the company, as key to getting the deal done. However, we believe that it creates a misbalance between investors and founders. When we look at the overall future potential of early-stage investments, we offer to take a much smaller piece of the pie, which increases our chances of getting the investment and reduces the predatory nature of aggressive ownership.”
The two insist that portfolio construction is another reason that makes them unconventional. “Looking at the traditional VC model, you would typically allocate 30%-40% of the funding for follow-on rounds. In today’s climate, when the time between funding rounds has shortened dramatically, early stage investors have to decide “whether they exercise their pro-rata right in a company that has achieved very little traction, and is still a high risk asset, or whether they take first bets (i.e have a larger portfolio of first check investments) and thus diversify their portfolio. Now, of course with outliers who demonstrate real traction we will double down, however the reality is that most subsequent funding rounds happen after very little progress. But the cool part, ” they conclude, “is that most LPs nowadays are craving direct investment opportunities in later stage rounds. We actively engage with our LP base, and facilitate their direct investment in the emerging winners of our portfolio, as well as in startups that we might have missed. This model is infinitely better from the perspective of economics and optics.”
They are now scouting for the next big company. “Our main focus is early stage and most importantly, people,” says Citron. “Both Omri and I have always focused on the human aspect of the business, more than anything else. We try to focus on the “Who” more than the “What” first, as we believe a startup has many variables affecting its success, business models, technology, and markets naturally evolve over time, but for the most part the team stays constant.”