Ryan Howard: A Big Piece to the future of SeventySix Capital
Ryan Howard has had an eventful year full of new beginnings and fond memories.
In March, the longtime Philadelphia Phillies slugger began his first season as a baseball analyst for ESPN, working 40 dates a year as a color commentator and on “Baseball Tonight.”
In July, the Phillies held a retirement ceremony for the franchise icon known as Big Piece, who hit 382 home runs in 13 seasons, won National League Rookie of the Year and MVP honors, and helped them win just their second World Series title, in 2008, before retiring in 2016.
And in August, he became a father again with the birth of his daughter, Amara, and helped his oldest son, Darian, go off to junior college in Alabama.
One constant for Howard has been his work as a partner at SeventySix Capital, the Philadelphia-based venture capital fund that he joined in 2017. In February, Howard led a six-figure investment in Diamond Kinetics, which puts sensors in bats and balls to gather data. In June, he represented Diamond Kinetics at USA Baseball’s inaugural Prospect Development Pipeline League at IMG Academy in Bradenton, Fla., managing one of the four teams.
In July, he participated in a FIFA video game tournament in Philadelphia on behalf of N3rd Street Gamers, one of SeventySix Capital’s investments that Howard led shortly after joining the firm in 2017 and which he has been instrumental in growing from a valuation of $2 million to $40 million. Earlier this month, the firm announced that Howard took the lead on an investment in U.S. Integrity, a company that provides fraud prevention and integrity monitoring to sports leagues and sportsbooks. And in November he’ll host the second annual Sports Innovation Conference and Pitch Competition at his old stomping grounds, Citizens Bank Park.
SeventySix Capital was founded by Wayne Kimmel in 1999 and has had several portfolio exits from Fortune 500 companies, such as Aramark, IBM and Walgreens, before Jon Powell, president and CEO of the real estate development firm Kravco Company, joined in 2015. The pair knew they wanted to focus on sports tech, sports betting and esports companies in SeventySix’s next chapter.
Enter Howard, who before retiring had told then-agent Brodie Van Wagenen (now the Mets’ general manager) about his desire to work with startups. Van Wagenen introduced him to Kimmel and Powell. Howard flatly told those two that he wanted to be “an investor in what’s next.”
Since then he has done just that, all while becoming involved in every aspect of the business. “I work with our investment team on fielding potential investments and doing due diligence on the companies,” he said. “Then when we pick a company to invest in, I do the best job I can of introducing them to different executives and using my social media platforms to help them get their marketing content out there.”
Howard also chairs SeventySix Capital’s Athlete Venture Group, which includes former NFL Pro Bowlers DeMarco Murray and Brian Westbrook and basketball hall of famer Ralph Sampson. It’s designed to allow ex-professional athletes to dip their toes into entrepreneurial waters to learn, invest and get hands-on with startups in an industry where they have expertise.
In 2017, SeventySix partnered with New York-based sports marketing agency Rubicon Talent Management, whose clients range from professional athletes and Olympians to broadcasters and celebrity chefs. “Many of our clients have an entrepreneurial appetite and see a lot of opportunities to leverage their social capital and their hard financial capital, and we knew that SeventySix Capital was better at evaluating those opportunities than we were,” said Rubicon partner Dave Maryles. “Our clients have become theirs now, and they get prequalified expertise from someone in the space who views thousands of deals and opportunities each year.”
Baseball hall of famer Cal Ripken and current Denver Broncos wide receiver Emmanuel Sanders, both Rubicon clients, have partnered with SeventySix Capital portfolio companies. Ripken and Ripken Baseball have joined forces with Diamond Kinetics. Since receiving seed money from SeventySix, it has become the exclusive technology partner of USA Baseball, PONY Baseball and Softball, Babe Ruth League and Perfect Game. Howard dubbed the company “the future of baseball” on his Instagram account.
Sanders, meanwhile, is a gaming enthusiast who became a brand ambassador and is now an equity partner in N3rd Street Gamers, a national amateur and semi-pro esports network, which has opened an 18,000-square-foot gaming hub in Denver. Since SeventySix’s initial investment in October 2017, N3rd Street has grown over 1,900%; Comcast-Spectacor has also invested, and Kellogg’s has become a partner, allowing the company to build an additional gaming facility in Huntington Beach, Calif. They are in the midst of a $10 million series A fundraising round and will use the money to open two more arenas, with a plan to open 300 facilities over the next decade.
CEO John Fazio is quick to credit Howard’s role in the growth of N3rd Street Gamers. “Ryan’s media presence was incredible when we were announcing deals and he was shooting content with us,” he said. “He has such a good understanding of the sports world and its inner mechanics as we build a system that really replicates the pro sports model.”
Other SeventySix Capital portfolio companies include the Musburger brothers’ Vegas Stats & Information network, or VSiN, a national sports gambling network that partnered with MSG in July to bring sports betting content to New York; ShotTracker, a sensor-based basketball analytics company whose technology is in use in more than 60 college basketball programs; and Swish Analytics, a sports betting platform that in September became an authorized Major League Baseball data distributor to U.S. sports betting operators.
SeventySix typically invests between $250,000 and $1 million in its portfolio companies, but Kimmel has one requirement that many venture capitalists do not. SeventySix invests only in “passionate, smart and nice entrepreneurs who are building game-changing startups.”
“Nice” is of utmost importance. “We have never made an investment in someone who is not nice and said, ‘It’s OK, they’ll make us a lot of money.’ That’s not how we do things,” Kimmel said. “We’ll be involved with these companies for years after our initial investment, and I don’t want to be talking to a jerk for 10 years. I want to want to answer the phone. I want to care. So we get to know them. What are they like? Do they treat the waiter or waitress nicely? We want to invest in really smart people with big vision who want to build something totally transformational, but we want to make sure they’re the right kind of people.”
SeventySix Capital is currently raising money for its second fund since Powell and Howard became partners and the firm began focusing on sports technology companies. Their eight portfolio companies have seen 174% valuation growth over 22 months and co-investors include Pittsburgh Pirates owner Robert Nutting, Comcast Spectacor, David Stern and Magic Johnson.
“Money is one piece of it, but we want to add more value than just our capital,” Kimmel said. “It’s more than just the money. It’s a strategy.”
The strategy behind bringing Howard aboard was simple: Kimmel thinks Howard’s experience as an elite athlete translates well to finding and working with elite entrepreneurs. “Ryan has expertise in being great at something,” Kimmel said. “The qualities that got him to the major leagues — passion, desire, drive, persistence, the ability to run through walls and get back up — are the same traits we as venture capitalists look for in the entrepreneurs we invest in.”