REDWOOD CITY, Calif. – Joe Montana is used to being judged on his performance on the field, but now the retired Hall of Fame and San Francisco 49ers quarterback is going to have to be concerned about a new statistical measure of his ability: IRR. That’s right, more than five years after hanging up his spikes, Montana’s decided to get in on the newest national past time: venture capital investing.
In mid-September, Champion Ventures, a investment organization that invests in other VC funds and was founded in 1999 by Montana’s former teammates Ronnie Lott and Harris Barton, announced that Montana joined the firm as a general partner. At the same time, Champion announced the August 28 final close of its second fund-of-funds, the $150 million 2000 Champion Ventures fund. Montana joined Champion when the vehicle was launched in the spring of this year.
Montana had been a limited partner in Champion’s $40 million freshman fund which closed in 1999, Barton said. After he and Lott invited Montana to attend several meetings with portfolio companies and were impressed with his performance, they decided to ask him to join the firm, he said. “We are looking for Joe to come on and meet guys, help establish VC relationships and help with athlete relationships,” he added. Champion’s limited partners all come from the sports world, he noted.
Montana said he was eager to join Champion, because he believes the firm’s purpose is great. The idea behind the firm is to establish connections between athletes and the Silicon Valley VC world, as well as to educate athletes about the world of technology investing, Barton said.
“I lost a lot of money in a business venture early in my career and you hear all sorts of horror stories about guys leaving the game with no money, so I thought this was a good way to have fun with two guys I knew really well and do some good for other athletes,” Montana said.
Champion will invest its current fund in approximately 13 to 16 top-tier VC funds, Barton said. Investments will range from $2 million to $10 million, he added. To date, the current vehicle has made seven investments in other funds. Barton declined to say how much capital these investments represented. Champion’s portfolio of VC funds for both of their vehicles includes: Accel Partners, Benchmark Capital, Kleiner Perkins Caufield & Byers, the Mayfield Fund, Mohr, Davidow Ventures, Sequoia Capital, Summit Partners, Redpoint Ventures and Technology Crossover Ventures.
The fund has a 1% management fee, Barton said, noting this simply covered the vehicle’s expenses. None of Champion’s partners take a salary for managing the fund. The vehicle has a 6% preferred return and once the fund has hit this benchmark, 5% of the carry goes to the general partners. Montana declined to say how much the three general partners had invested in the fund, beyond calling it a significant amount.
Montana said the hardest part of convincing an athlete to invest in the fund is getting past the athlete’s agent or financial advisor, because there is no money in the investment for the agent. “Some of the athletes do not like it at first, because it is high risk, but we say we have diversified the risk with the approach we take,” he said, adding “it’s exciting for these guys to be involved with this because it is cutting-edge and that is where they have been all their lives.”
LP’s in the latest vehicle include a number of well known sports stars: Andre Agassi, Michael Johnson, Oscar De La Hoya, Mike Krzyzewski, Steve Mariucci, Rick Pitino and Tim Duncan.