Canadian athletes are joining the trend of sports stars becoming equity investors

Amar Gupta, left, Denis Shapovalov and Josh Barr.handouts

When Denis Shapovalov lost his composure during a match at the Italian Open last month and began swearing at the crowd, two Toronto entrepreneurs were watching more closely than just casual hometown fans. Because just before the tournament, Amar Gupta and Josh Barr had signed a deal to bring the Canadian men’s tennis star as an equity investor in their four-year-old company, which sells an innovative cold-brew coffee with enough protein for a full meal.

Still, in a recent interview, they insisted that Shapovalov’s competitiveness was one reason they did business with him. “We love its intensity, we love its aggressiveness,” Gupta said. “He has an edge that we, as a disruptive brand, agree with.”

By taking a stake in bbrüst and becoming a face of the company — or, in new industry jargon, a “brand ambassador” — Shapovalov joins a rush of Canadian athletes who are flexing their growing market power as investors in the products and services they sell to they believe, and not just paid speakers in advertising campaigns.

Not so long ago, athletes would wait until they hung up their skates (or cleats, running shoes, etc.) before going into business, taking a sinecure at a bank that appreciated having a former star on the staff , or maybe bought a car dealership . (One of the exceptions to the rule, of course, spawned a legendary Canadian company after NHL defenseman Tim Horton opened a coffee-and-donut shop in Hamilton in 1964 while he was still playing for the Toronto Maple Leafs.) But the best part limited their business to endorsement deals.

No longer. In recent years, an increasing number of US and European based athletes have been stricken with entrepreneurship. Canadian athletes based in their home country, restricted by the smaller Canadian companies, had been excluded. (On Thursday, Forbes reported that it calculated LeBron James’ earnings had surpassed $1 billion, including an estimated $900 million in endorsements and investments.) But now they’re joining a group of Canadian startups for a long time to close strike temporary agreements that give them real power to influence the fortunes of a company.

“Influential people, whether athletes, celebrities or musicians, have become much more educated over the years and much more aware of their appeal and their ability to influence brands and consumers,” said Tom Chapman. the head of advertising for tennis at the WME/IMG agency, who oversees the extrajudicial business relationships of Shapovalov and his Canadian compatriot Bianca Andreescu, as well as Serena Williams, Maria Sharapova and others.

When Shapovalov “spends time creating excitement and awareness for a brand and that company grows, rather than making a few hundred thousand dollars a year, he wants to share in the long-term benefits of that, like some kind of sponsorship format,” said Chapman, who noted that the development is a reflection of athletes “backing on themselves”.

Canadian gold-medal Olympic sprinter Andre De Grasse recently became an equity investor in Plantiga, a Vancouver-based company that makes smart insoles that track the force an athlete expends during movements, whether it’s walking, running, jumping or landing a jump shot.

Plantiga CEO Quin Sandler said he has seven athletes among his investors, each with between $25,000 and $75,000 invested in the company. But just as important as the money, he said, these athletes used their elite networks to grow the business by introducing Sandler to their past NCAA programs and the pro teams they play on. Sandler also said that current Toronto raptor (and MBA graduate) Thaddeus Young, who holds shares in companies including Coinbase, Airbnb, Space X and Toronto startup Trufan, has linked him to a shoe company in which he invests have.

And Sandler said he expects some of his investor-athletes to write social media posts about how Plantiga’s technology and data collection is helping them avoid injuries. “It’s actually a critical part of our go-to-market strategy,” Sandler said. “Because that, I think, is a big gap in the wider society. People just don’t know how to move.” Last year, De Grasse made a video encouraging people to sign up for the Plantiga beta testing program.

Young was introduced to Plantiga by Randy Osei, a former executive of pro basketball players (including Anthony Bennett) who now runs Athlete Tech Group (ATG), a Brampton-based events company that brings tech investors and athletes together. Osei said ATG’s investors include Lethbridge-born hockey player Kris Versteeg and Mississauga, Ontario-born former NBA player Andrew Nicholson.

Osei said the athlete investment revolution is a long time coming as the global sports industry is estimated to be worth about $600 billion after years of double-digit growth. “The greatest value creator, the athlete, is still seeing the smallest percentage of that growth.”

Some sports investors are more involved than others. The Brüt founders say that as a heavy coffee drinker who is often pressed for time to get enough protein in his diet, Shapovalov will be a passionate and authentic ambassador for the product. They plan to include him in meetings with big clients like Loblaws as well as retailers south of the border when the company enters the U.S. market, potentially later this year.

“We think it will be exciting for potential client managers to see that Denis is really a fan of the product and that he uses it in his daily life,” Gupta said. The company will also run “Tennis with Denis” promotions where customers and clients can win the opportunity to play against Shapovalov.

Chapman warns that not every professional athlete is suited to be an active investor. “This model is not for everyone. It is very important that you do not forget the job. The day job is to train, surround yourself with the best coaching staff in the world, play at a high level, hit the court, win tennis matches and be successful. This is the bread and butter, this is the daily work and nothing should distract from it.”

But Brian Levine, the president of Toronto-based Envision Sports and Entertainment, who represents De Grasse and also worked on Brüst’s behalf to sign Shapovalov, said investing is a natural expression of the sporting mindset. “Some athletes focus on their sport and their family and nothing else,” he told The Globe. “Others, however, find great personal fulfillment in being actively involved in other pursuits, including investing. It also helps keep them balanced. They may have a bad game or get injured, but they can still hope for success in another arena. Athletes are very competitive individuals and many see business as another field in which to compete.”

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