I was talking with some friends of mine the other day, and it struck me that they knew little about roller derby at all.
That came as a surprise to me, as they were all fans of the Rock-n-Rollergames show from the late 1980s. Because they never received TNN (now the Spike Network) during the RollerJam years, they had forgotten that the banked track sport even existed.
They had even less knowledge of the newer all female leagues, that are springing up all over North America, whether skated on flat track or bank.
I gave them all a crash course in recent roller derby history.
They were all quite enthused about the sport's revival, but skeptical about whether the sport could ever become popular again.
One of my friends is involved in high risk venture capital finance. His company lends to, and takes equity stakes (part ownership) in, various higher risk business ventures. Their clients include companies that are long on ideas and talent, but are very short of cash and....well....just about everything else.
He was not certain if they could justify the financing for a roller derby startup league.
With the unscientific sample that day, of many former roller derby fans, he saw some serious stumbling blocks. It seemed to him that the sport needed a lot higher profile created, with the general public, before any league would be seriously considered by any investors.
If past casual roller derby fans were unaware that the sport still existed, there was a long way to go, if a league wanted to build a fan base. He saw the current roller derby fan base as just slightly above non-existant. He said that would be the position the investors would take from the start.
The onus would be, on the league owners and management, to prove a fan base existed now, or become viable in the vary near future.
The roller derby fan base, from the venture capitalist standpoint, would be considered zero.
He thought locally popular leagues (that would include the Texas, Cayman Islands, and Arizona all female leagues) would find some nice niche markets. He did not see much growth potential, from an investor point of view. He felt the leagues might do very well financially, as small businesses, but attracting large scale funding would not likely happen.
I told him that the all female leagues were bootstrap type operations, who financed themselves, through fundraisers and their own cash flow. He said that was probably going to be the only way to finance and operate roller derby leagues for a long time.
Since his company which operates in all of North America, looked only at high risk investments, he had a sense of which industries would be good investments. He believed the sport of roller derby was even too high risk for them. Other high risk investors would likely think the same way. The main strike against roller derby, in his opinion, was limited pre-existing market.
That information is bad news for potential roller derby leagueowners (or other high risk industry entrants) who are chasing the elusive "investors".
I have never been a fan of the investor concept, so it was not earth shattering news for me.
I have said for a long time, that investor led roller derby leagues are not the way to go, for new owners.
In fact, I am not sold on the concept of investor equity financing for entrepreneurs in any industry, due to the loss of ownership control. For new business owners, who consider high risk venture capital, being prepared to compromise and even sacrifice their vision is necessary.
While many business owners may be tempted by the opportunity for startup equity capital, they must be ready to potentially lose control of their own business and ideas.
While I don't entirely agree with everything my friend said about equity venture capital, he does make some good points. Roller derby's fan base has been seriously eroded, and will take a long time to rebuild. I have said that myself, more than once.
Perhaps other investors might not be so pessimistic about funding roller derby startups. On the other hand, they just might be even less optimistic.
In any case, the best way to start a roller derby league, or a business startup, is probably to fund it yourself. Using the business's own cash flow, coupled with some really creative money raising techniques, is probably a better route to success.
While the all female roller derby leagues may have found a few great methods of league funding, they haven't found them all. There are many more creative techniques for getting money for a league. The all women's leagues have probably only scratched the financing surface.
We always have to keep in mind, that what works for one business, will not necessarily work for all startup businesses.
To say that "you should copy the all female leagues as they have all the answers", is not good business advice. Every business, and roller derby is a business too, has different financial needs, goals, markets, and management teams. They have found one business model, among an infinite number of business possiblities.
There are as many ways to get money as there are people with league startup concepts.
On the other hand, the investor route to league financing is not the answer.
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