By Titik Puspa 
Collaborative Fund, a seasoned New York-based generalist venture capital firm boasting approximately $1 billion in assets under management and a history of prescient early-stage investments in industry disruptors like Lyft, Reddit, Sweetgreen, and Olipop, has announced its acquisition of a stake in the Major League Soccer (MLS) club D.C. United and its home venue, Audi Field. This strategic move marks a significant development in the evolving landscape of professional sports ownership, positioning Collaborative Fund as a pioneer in leveraging venture capital for this traditionally capital-intensive sector. The firm’s entry into sports ownership follows a path recently forged by Thrive Capital, which, just months prior, opened the door for venture money to be channeled into professional sports franchises.
Thrive Capital, under the leadership of Joshua Kushner, established a dedicated entity named Thrive Eternal. This new venture was explicitly designed to acquire and hold "iconic franchises and cultural institutions" for the long term, drawing capital from the same investors who fuel Thrive’s established venture and growth funds. The firm made a notable debut by announcing its acquisition of a stake in the San Francisco Giants. In a subsequent, even more substantial move, Thrive Eternal, with the esteemed former Disney CEO Bob Iger joining as a co-owner and partner, acquired the Los Angeles Lakers outright for a staggering $12.5 billion, setting a new benchmark for sports franchise valuations.
Historically, professional sports ownership has been dominated by two primary avenues: the personal fortunes of individual tech titans and the deep pockets of private equity firms. The current year has seen a continuation of this trend, with prominent tech entrepreneurs making significant inroads. For instance, Vinod Khosla and his family agreed to purchase the Seattle Seahawks for a record $9.6 billion this past summer. This followed closely on the heels of the Khosla family’s investment in the San Francisco 49ers, alongside OpenAI chairman Bret Taylor. These transactions exemplify the "personal-wealth play," a recurring pattern in sports acquisition where immense individual wealth is deployed to acquire prized assets.
Private equity firms have also been active participants in the sports ownership arena for many years. Major players include Sixth Street, which holds stakes in esteemed franchises such as the Boston Celtics, the New England Patriots, and MLB’s San Francisco Giants. Ares has acquired outright ownership of the Miami Dolphins and, in a separate venture, provided financing for Chelsea’s stadium development through a $500 million preferred-equity deal. RedBird Capital Partners is the owner of AC Milan and holds a minority stake in Fenway Sports Group, the parent company of iconic sports entities like Liverpool Football Club and the Boston Red Sox. Arctos Sports Partners has established a presence with minority investments spread across Major League Baseball (MLB), the National Football League (NFL), the National Basketball Association (NBA), and European football leagues. While Apollo Global Management has recently entered the sports investment space, its focus has primarily been on financing deals rather than direct ownership stakes.
Collaborative Fund and Thrive Capital, however, are charting a distinct course, diverging from both the individual wealth model and the traditional private equity approach. What sets them apart, and particularly Collaborative Fund’s strategy, is the manner in which they are deploying their capital. While Thrive established a distinct, permanent-capital vehicle tailored for long-term asset holding, Collaborative Fund is investing from its existing early-stage fund, the same vehicle used for seed and Series A funding rounds. This approach suggests a perception of the D.C. United deal as less of a traditional buy-and-hold asset and more akin to an investment in infrastructure with multifaceted revenue streams and strategic advantages.
In a candid memo shared with TechCrunch, Craig Shapiro, founder and managing partner of Collaborative Fund, articulated the rationale behind the D.C. United investment as a natural extension of the firm’s core investment philosophy. "A franchise is the ultimate consumer product," Shapiro stated, underscoring the inherent appeal of a sports team as a platform for engaging with a large and passionate audience. He highlighted D.C. United’s historical significance as one of Major League Soccer’s founding clubs, providing Collaborative Fund with access to an established institution possessing a deeply rooted, multi-generational fanbase that can be leveraged for future growth.
Shapiro further elaborated on the compelling tailwinds currently benefiting the sport of soccer in the United States. The recent hosting of the FIFA World Cup and the anticipation of the Los Angeles Olympics in 2028 are significant catalysts for the sport’s popularity. Coupled with soaring youth participation numbers across the U.S., these factors create a fertile ground for investment. The ownership of Audi Field in Washington, D.C., by D.C. United, alongside a robust talent-development pipeline through Loudoun County, Virginia, and territorial rights to a future expansion team in Baltimore, further solidifies the strategic value of the investment. This comprehensive asset base presents multiple avenues for growth and monetization.
The core thesis, as articulated by Shapiro at a TechCrunch StrictlyVC event in New York, shifts the focus from merely owning an appreciating asset – the team itself – to harnessing what the team and its associated infrastructure can facilitate. Collaborative Fund envisions Audi Field as a dynamic showcase for its broader portfolio of companies. For instance, as a significant investor in fitness wearable company Whoop and popular beverage brand Olipop, Collaborative Fund is exploring potential activations such as integrating Whoop wearables into fan experiences or featuring Olipop drinks prominently in game-day concessions. Shapiro recognizes the immense value of the stadium’s consistent foot traffic – tens of thousands of attendees on a predictable schedule – as a powerful distribution channel. In an era where artificial intelligence is increasingly automating and potentially "synthesizing" aspects of daily life, live, tangible experiences are experiencing a resurgence in value.
While Shapiro may not explicitly dwell on this aspect, the robust growth in sports team valuations undoubtedly provided a compelling case for Collaborative Fund’s investors. The stake in D.C. United is positioned to yield significant returns, not only through traditional appreciation but also through synergistic opportunities. Soccer valuations, in particular, have experienced an extraordinary surge. The franchise value of Inter Miami has approximately doubled in the two years since the arrival of global superstar Lionel Messi. Forbes reports that the average MLS club value has seen an impressive increase of roughly 134% since 2019. D.C. United’s own valuation has witnessed a dramatic ascent, climbing from an estimated $35 million in 2008 to a substantial $785 million today, a figure that impressively factors in its ownership of Audi Field and the surrounding real estate.
If Shapiro’s assertion that "a franchise is the ultimate consumer product" holds true, then investing in such an entity could indeed prove to be a highly lucrative strategy for capital deployment. The ultimate success of this innovative approach will, of course, be determined by time and market performance.
The proposed transaction is currently contingent upon the approval of Major League Soccer (MLS), which is standard procedure for any change in club ownership within the league. The involvement of a venture capital firm like Collaborative Fund in such a significant sports acquisition underscores the blurring lines between traditional investment sectors and the growing recognition of sports franchises as potent, multifaceted business platforms. This move by Collaborative Fund, building on the precedent set by Thrive Capital, signals a potential paradigm shift, inviting a new wave of capital and strategic thinking into the world of professional sports ownership. The long-term implications for team management, fan engagement, and investment strategies remain to be seen, but the current trajectory suggests a dynamic and exciting future for the intersection of venture capital and sports.
