Finance Friday that you didn't ask for

the math doesn’t math if you apply the “unicorn or bust” VC playbook to sports.

Sports just became this truly investible asset, right? I think we all agree on this as sports has grown the last 1-5 years and the numbers have began working. It’s going up, the pie is growing, but liquidity is still a mess. Traditional VC promises LPs “4x+ in 10 years,” while ignoring the reality that exits in sports are limited, IPOs are rare, and vintage funds across the board are sitting on paper with no liquidity.

Sports VC ≠ traditional VC

So as promised…let’s chat a bit about 51’s mixed approach to investing…venture capital + private credit.

🧠 Venture investing

We all know what venture investments are.
The founder says: “Hey, bet on me, I can build this into a billion-dollar company.”
The investor says: “Okay,” writes a check… and then waits.

On standby.
No involvement, no support. Just money to fuel an idea. (I literally see it all the time from founders who have checks from a VC who’s website says “wE aRe MoRe tHaN CaPiTal”)

And that’s all they are….money. A $500K check with no value beyond the $500K.

But that doesn’t work anymore. Damn sure won’t work here. (subject to the best team ever assembled which…) Today, checks have to mean more. Founders long for experience that’s been there before. Who do they call when they need help? Who do they ask when they need resources? Who can give them real value—in sales, in marketing, in product development, in recruiting, in opening doors? Who actually follows through?

Founders don’t just want this—it’s a must. Venture capital is a value-add business, and it should be treated as such.

Early-stage investing is already a moonshot. But imagine this: if you could invest in a public stock and then make a call the next day that doubled the company’s value—you’d do it every time. In public markets, that’s insider trading. In venture, that’s exactly what value-add investors can do.

💰 Growth in Private Credit

First off, what is private credit?

In simple terms, it’s lending done by non-bank institutions - direct loans, revenue-based financing, factoring, term loans - tailored to companies that either can’t (age of biz, timing, rates, credit issues) or don’t want to go through traditional banks.

Why it matters (and why it’s booming):

• 📈 Explosive growth: Private credit AUM has surged from ~$500B a decade ago to ~$1.7T today, projected to reach $3T+ by 2028.

• 🏦 Banks pulled back: Tighter regulations and recent bank stress left gaps in lending—private lenders stepped in.

• 💸 Investors want yield: Floating-rate loans with stronger protections look attractive versus public credit.

• ⏱️ Speed & flexibility: Deals close faster and can be structured around revenue, assets, or forward-flow.

• 🌍 Still early days: The U.S. addressable market is >$30T, meaning private credit is only scratching the surface. yeah yeah yeah TAM blah blah but that’s important for this.

This surge isn’t just a macro trend, it hedges long-term equity bets with near-term cash yield and gives founders capital to grow without crushing dilution. Dilution is very important here in the sports space, I’ll come back to that…

👀 Recent hot topics of CPG

Consumer packaged goods (CPG) has always been a tough game -margins are tight, competition is fueling, and scaling requires both capital and expertise. But it’s also one of the fastest-growing and most disruptive sectors today. It’s also a very attractive space with athletes who have social capital to offer as well, which is how and why we tied it in. I think there are many similarities from cash flows and constraints as in sports.

• 📈 Market Growth: The global CPG market is projected to expand by nearly $1.5 trillion between 2024 and 2029 (~4.9% CAGR), driven by e-commerce, DTC brands, and shifting consumer demand. This isn’t slowing down—it’s accelerating.

• 🤖 Profitability Levers via Data + AI: According to Bain, brands can boost sales growth by 3–5 points and expand gross margins by 200–300 bps by using granular, data-driven strategies and AI-enabled marketing. For emerging brands, that’s the difference between surviving and thriving.

• 💸 Capital + Resource Challenges: But here’s the rub—CPG is capital-intensive. Inventory, manufacturing, distribution, and working capital can bury young brands. Too often, founders get stuck: great product, strong consumer pull, but no resources to scale. Traditional VC often overlooks these companies, and traditional lending doesn’t fit their model.

Take Sour Strips as an example. They raised no outside capital and scaled through smart brand building and community engagement. In 2024, Hershey acquired the company for ~$75M.

Again….it’s not what you raise, it’s what you own.

If they had raised multiple rounds and given up 40–50% (or more most likely) of the company along the way, that payday would have looked very different.

😎Now…my lasting $0.02

Now, I won’t tell you exactly how the math works for us, the way we approach ownership %, rates, the dollars and cents if you will, if you wanted to bad enough you could find out….but what I will tell you, is there is a reason private credit is rising as such, there is a reason venture funds are struggling with liquidity from their portfolios, there is a reason we combined them. And I think firms that aren’t, don’t thrive here. Hedge your long term bets (VC) with near term gains (PC) while your provide for your portfolio so they too can survive, grow, and thrive.

• Most exits aren’t unicorns. The majority of sports tech & CPG acquisitions land near and under $100M (and many closer to $50M).

• Ownership matters more than capital raised. If you’ve diluted heavily, even a solid exit won’t be much. (that goes for investors early too, no one is safe from dilution unless you get the ND shares but…)

• Traditional VC math doesn’t work here. Promising LPs “4×+ in 10 years” ignores liquidity constraints, long holds, and smaller exit values.

• Private credit fills the gap. It creates near-term cash returns and keeps founders alive without crushing dilution.

• Venture checks must mean more. Money alone isn’t enough—founders need operators, networks, execution, and follow-through.

• CPG is booming, but resource-intensive. Growth is strong (~4.9% CAGR), but scaling requires data, AI, smart capital, and value-add partners.

👉 51: venture + private credit + value-add. The goal isn’t chasing unicorns—it’s building elephants that compound value for founders and investors.