The new GTAA Venture Investment Fund gives donors the opportunity to invest and incubate early stage, sports-focused startups founded by Tech students and alumni. The institutionally backed fund, catered for sports-related companies and products, is believed to be one of the first of its kind in the Power Five.
Tech athletic director Todd Stansbury believes the chance to be an equity partner in student-driven enterprises while providing access and resources is a true win-win. The former Oregon State athletic director envisions the Tech VC fund as further setting the school apart from others as “Startup U,” with a renewed focus on sports innovation, something he desired since he returned to his alma mater in 2016.
“We have to play to our strengths,” Stansbury said. “There are certain things that we can’t do that many of our athletic peers can do. This is an area that fits right into the wheelhouse of what Georgia Tech is all about, especially as it’s related to entrepreneurship and innovation.”
The Georgia Tech Athletic Association (GTAA), a nonprofit organization overseen by a board of trustees, went through a laborious process last year to start the fund. With the support of Tech’s foundation, the donor-driven initiative is ready to identify dozens of startups—ranging from analytics-focused to performance-based—within the next year and make offers to at least six by the end of summer.
GTAA has doubled down on innovation entering this year with a roughly $12 million reserve fund deficit that it couldn’t address last fiscal year as a result of the ongoing COVID-19 pandemic. The athletic department looks at this pilot initiative as a potential revenue stream to aid recovery, especially if it finds the next unicorn, or billion-dollar startup.
Tech has lofty goals of potentially incubating an on-campus success story like Gatorade, the Pepsi Co.-owned sports drink invented in a University of Florida lab.
GTAA, which projects to make $95 million in revenue this fiscal year, doesn’t garner the massive athletic budget compared to college football powerhouses like the nearby University of Georgia ($150 million). So the world-renowned research university is taking a different approach by investing in student-founded companies that they hope can pay dividends back to the athletic program.
“We’re betting on the best and brightest,” Stansbury said.
GTAA has already made its first splash as an angel investor for Create X startup LZRD Tech, founded by a pair of Tech graduates including former lacrosse player Mike Pullen. LZRD Tech’s protective compression arm sleeve, which was recently approved by the NCAA, is an example of what’s possible with help from the new fund. Tech running back Dontae Smith is among other football players interested in sporting the sleeve when the 2022 season rolls around this fall.
“We’re really focused on the (startups) that are going to be profitable but also ones that can be a differentiator for our coaches, student athletes and our teams,” said Tech assistant athletic director for innovation Doug Allvine, who mentioned Tech outfitter Adidas as a potential investor for LZRD Tech.
GTAA has a long-term partnership deal with Legends and envisions creating an online marketplace where donors and alumni can explore a list of Tech-backed startups. Some of the early stage companies may go beyond sports and deeper into entertainment.
“Our goal long-term is make this a significant revenue stream, with a lot of upside,” Stansbury added.