As the newest NPF hopeful works to gain traction, the question has become, will we see the organization trade Equity for investment dollars? All accounts from within the company have referenced a two-part business model:
- Create an off-season revenue stream and
- Put a second team in the league
We still have no idea how or when the former will actualize but the latter has been the subject of controversy among financial pundits. A second team, functioning effectively, would help produce profits and there are numerous examples throughout minor league baseball of owners who successfully juggle two clubs.
This leads us back to square one with a harsh truth – the fund raise for the company’s first franchise is still incomplete. Executives remain confident in their ability to reach the threshold required for the 2018 season but resources would more than likely be spread too thin for a successive expansion in 2019. Fundamentally, the solution is simple—raise a second round. Unfortunately, sector specifications and a paltry valuation relative to the market will always make difficult the acquisition of capital to further business objectives.
In a landscape polluted with Big Data Tech Startups and SaaS (Software as a Service) Application Ventures, the NPF is low on the competitive “Capital Investment” food chain. To make matters worse, the infrastructure of Venture Capital is male dominant. In September of 2017, Wendy DuBow, PhD. of the Harvard Business Review reported that only 8% of Venture Capital firms in the United States have female partners, less than 5% of Venture Capital-funded businesses have a female on their executive team, and only 2.7% of Venture Capital-funded businesses have a female CEO. This is not to say that women are unsuccessful in the business world but they are certainly more often faced with the challenge of bootstrapping their respective enterprise rather than enjoying the bolster of a “Series A” round. Dubow has long studied gender and diversity, especially as it relates to the IT sector, and her findings are simple if I may paraphrase – women invest in women.
Given the scarcity of venture funding, the idea of an Initial Coin Offering (ICO) has been broached by company officials on multiple occasions. An ICO utilizes Cryptocurrency as a means to raise funds for a new venture and affords the bypassing of an otherwise painstaking process. During an ICO campaign, investors use both fiat and virtual currency to purchase “tokens.” These tokens are equivalent to a share in the company. If the campaign does not meet a minimum requirement, the funds are returned to the investors and the ICO is deemed unsuccessful.
ICOs have been compared to crowdfunding by experts in the field. Their exceeding popularity is propelled by the allowing for anyone to purchase equitable value in the network. However, the almost complete lack of regulation has left the landscape similar to the “Wild West” and many campaigns have been reported fraudulent. Despite the risks, the ICO market is hot. 2017 alone has seen nearly $2 BILLION raised which, coupled with the surrounding controversy, appears a suitable direction for the disruptive NPF hopeful. Besides, the platform could provide new opportunities for female-led enterprise and there have already been numerous successful campaigns by female founders.
While ICOs remain controversial, one thing is certain: the arena has begun to level the playing field for funding opportunities among females in business. The main point of contention regarding the union of NPF and ICO has been whether the digital token can be integrated into the business model in a meaningful way. Without reason to believe a decentralized token could add value, other than as a PR stunt, the logical choice would be to opt for Equity Crowdfunding.
As the NPF’s newest member seeks funding alternatives in this first round, popular demand could push a crowdfund to the forefront. The group has already made it known that they will offer incoming players and coaches a stock option during the 2018 season but making shares available to the masses is a vastly different proposition. Yes, the prestige associated with “owning” a professional sports team – especially one with the social influence of the NPF – would be enticing to investors but there’s no way to be certain the campaign will work. The entering franchise boasts a decorated staff, to the extent that even NPF officials have expressed excitement in their prospected entrance, but will they garner support from the softball community?
It will be interesting to track the developments of this new team as they continue to seek a breakthrough. Will they make their entrance in 2018?
Only time will tell.