Fanstake recently raised $6.25 million in seed funding to continue building a platform that lets college sports fans crowdfund potential NIL payouts as a way to entice athletes to attend their school.
College sports’ future financial structure remains uncertain as legal proceedings and legislative discussion continue amid the teardown of existing NCAA oversight. But regardless of upcoming changes, Fanstake CEO Greg Glass foresees schools needing to find new revenue sources to pay their players and fund their athletic programs, one way or another.
“The biggest thing for us was, how do you expand that donor base? Because today it’s just the high net worth, affluent alumni that are contributing,” Glass said. “Can you tap into the fanatical fan base beyond that?”
Courtside Ventures led the latest funding round, with participation from Will Ventures, Susa Ventures, Scrum Ventures, Myriad Ventures, Alumni Ventures and others. Fanstake previously raised a $3 million pre-seed round.
Fanstake has created pages for hundreds of athletes already, including all Division I football and men’s and women’s basketball players, where fans can pool financial offers contingent on a given player choosing to attend—or stay at—a certain school. For example, Louisville backers offered a combined $88,000 to Fanstake ambassador Nate Ament as the basketball recruit chose his destination. Ament ultimately signed with Tennessee; Volunteer Fanstakers had contributed $13,405, which Ament will receive in exchange for promoting Fanstake online.
Fanstake returns unsuccessfully staked money as account credits for future opportunities. Glass says about 18,000 users to date have combined to offer nearly $500,000 combined.
In the next phase of development, Fanstake is adding gamification elements, such as rewards that accrue as users offer players more money.
“We are focused on athletes getting fair market value as much as they possibly can get,” Glass said. “Getting the fans the ability to participate in a way where it’s engaging and fun for them ends up helping the schools.”
For Courtside Ventures, the investment is its first directly NIL-related play.
“We’ve been spending a good part of four years now looking at the NIL space and no exaggeration have probably looked at just about 100 different opportunities,” Courtside Ventures principal Cort Post said. “It was not until this one where we just, we kind of jumped on the opportunity of finally something that we felt could be venture scale.”
Post added that Courtside took comfort in Fanstake executives’ experience. Glass, along with Fanstake co-founders Alex Boisvert and Donnie Flood, previously led adtech company Bizo, which was acquired by LinkedIn in 2014 for $175 million.
“I don’t have a perfect answer for exactly what Fanstake will look like in the future compared to kind of their beachhead today, but we get comfortable with that,” Post said. “If you pair the right founder with the right market and enough disruption, they’re gonna figure something out that works.”
