Green Bay Packers quarterback Aaron Rodgers has been one of the most dominant players of his generation. He has a pair of NFL MVP Awards to go with his 2010 Super Bowl MVP. His career passing rating is the highest in the history of pro football. Green Bay rewarded Rodgers in August with a blockbuster four-year, $134 million contract extension that made him the highest-paid player in the sport. He earned $90 million over the last 12 months, including endorsements.
Rodgers is now putting some of those riches to work in the VC world with a new venture and growth stage fund, Rx3 Ventures, focused on consumer brands. His fellow general partners in the fund are Byron Roth, CEO and cofounder of Roth Capital Partners, and Nate Raabe, who formerly ran Roth’s private capital group. All three invested seven figures into the fund, and they raised the balance of the $50 million fund, based in Orange County, California.
“With Rx3, I saw the opportunity to create an investment platform that brings together a group of like-minded influential investors and their respective networks with the backing of institutional resources,” says Rodgers.
Rx3 is backed by a deep roster of influencer investors, with many from the world of sports, including former Heisman Trophy winner Desmond Howard, auto racing trailblazer Danica Patrick and skateboarder Ryan Sheckler. There are a half-dozen NFL quarterbacks in the fund, including Rodgers and the New York Jets’ Sam Darnold.
“A lot of the companies we talk to wouldn’t let us in the deals if it wasn’t for Aaron and some of our other investors. Our check size is not enough to move the needle. The investor base is a door opener and differentiator,” says Roth.
But Rx3 is not just looking at influencers as celebrities with vast social media followings. The Rx3 founders see influencer investors who can add value beyond capital from the world of finance and business. Alex Bhatal, founder of RAJ Capital and minority owner in the Sacramento Kings, and David Vanderveen, who cofounded energy drink brand XS, are also investors who can open doors.
Rodgers got connected with Raabe through a childhood friend who was Raabe’s college roommate at Santa Clara University. Rodgers and Raabe stayed close over the years and invested together during the last half-decade. “Aaron saw an opportunity to take what we were doing at Roth on the private side and put in the platform of a fund structure to alleviate some of the pain points he saw with private investing,” says Raabe.
The fund has made seven investments to date, including Privé Revaux Eyewear, helmet maker VICIS and rowing machine Hydrow. The fund expects to make investments in the $1 million to $3 million range going forward, with a focus on established consumer brands.
Roth launched his namesake investment banking firm 27 years ago. It has focused on small-cap and micro-cap companies and has raised $57 billion for them over the years and advised on more than 300 mergers and acquisitions. The company has a consumer team of 10 bankers and three analysts to assist with Rx3’s investments.
Roth’s connections from a career in banking are an advantage in this space. The relationship helped Rx3 join leading private equity firm TSG Consumer when it bought a minority stake in Privé Revaux last year. Rx3 expects most of its investments to be alongside large, brand-name private equity firms. The celebrity investors and infrastructure of Roth Capital allow Rx3 to punch above the weight of a typical $50 million fund.
Celebrities have caught the Silicon Valley bug since actor Ashton Kutcher launched a fund in 2010 and struck gold with early investments in Uber and others. Musician Nas and actor Will Smith have both raised money for funds. Athletes like Kevin Durant and Serena Williams self-funded their own VC investment vehicles (see “Inside Serena Williams’ Plan To Ace Venture Investing”).
VC giant Andreesen Horowitz launched the Cultural Leadership Fund last year with a who’s who of celebrity partners (fund fees are donated to organizations that help African-Americans enter the technology industry).
The right influencer can be very beneficial to the right company in a portfolio. Take Howard, a former NFLer who has been a part of ESPN’s popular College Gameday show since 2005. In addition to wearing Privé Revaux sunglasses on camera, Howard taps equipment managers at major universities for their takes on VICIS helmets. Howard has a unique level of access when traveling weekly for Gameday and provides VICIS executives with important feedback.
“Guys like Aaron and myself are approached all the time with investing opportunities, but we don’t have the due diligence to check everything,” says Howard. “This concept made sense. You can’t put a price on the type of value we can add to a company like VICIS.”
The partners are already thinking about their next score. “The only way to do the next fund is to have good returns in the first one,” says Roth. “This is a scoreboard like most of our investors are used to looking at.”
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