How Does the Investment Community Feel About Bill Simmons?

ESPN is about to find out how dumb they were for letting their most talented asset walk out the door not too long ago.

Bill Simmons made a really big bet on himself when he decided to walk away from John Skipper and the powers that be in Bristol, and –  judging from his tweet barrage over the weekend – the early returns provide sweet validation. The question now becomes can Simmons raise the necessary capital to support what appears to have been a successful early launch of Bill Simmons Media Group.

There’s a running debate that some in tech/business media have been engaged in for several years and the victor may be declared soon and Simmons made his most boisterous declarations to date in a series of “Sunday Funday” tweets the other day aiming directly at the World Wide Leader.

As someone who as helped raise millions for new projects it’s pretty clear to me that Simmons is trying to convince the investment community that putting money into his new media company on his terms is a safe bet.  Antagonizing ESPN while doing it is getting to lick the spoon. While Simmons is very accurate in regards to the cost effectiveness of content distribution in 2016 thanks to free, viral social networks like Twitter, Facebook plus the overall power of Google, some in the investment community are interested to see if big bets will be placed. Simmons’ next task is to convince venture capital groups what his valuation is, which is no easy task even for someone of his star power.

“As a firm, we’re more bearish than other investors in the space,” says Josh Nussbaum, an analyst for Metamorphic Ventures in New York City, a firm specializing in seed investments co-founded by David Hirch once of Google. “The reason is that we tend to invest at the seed stage, so if the company already has that voice (like Bill Simmons or Adrian Wojnarowski) we either won’t have the opportunity to invest or the valuation will be sky high. The other companies are interesting, but harder for us to find conviction around until we can see more data on the audience and the market.”

There’s an old adage in the venture capital world that there’s something to being able to build revenues and support yourself before asking for help from lenders. Add to that the idea that ESPN is the very reason he’s become the star he’s shopping, as many critics have, and here we are at the cusp of finding out the future will hold for Simmons’ latest venture. He’s not building a blog and hiring writers here, this is big boy ball. 

“Media companies are tough bets in VC because content is expensive, hits driven and often indefensible,” says Adam Carver who handles Partnerships for Angel List. “Other than Vice & Buzzfeed, who are the recent new media wins? Individual, high net-worth angels may feel differently and I could envision may invest in a sports media company because it fits their lifestyle.”

What Simmons is attempting to do is create the gold standard for start up sports media companies, while trying to destroy ESPN. That’s complicated in the business world. His leverage is the fact that he’s Bill Friggin’ Simmons and that he has many people rooting for him in his corner, including Silicon Valley superstar Chris Sacca. It’s an ambitious undertaking but he will win IF he can monetize all the platforms including his very successful podcast network and raise the capital to support company’s growth. Who will actually write the check remains to be seen but judging from Simmons’ tweets it appears we may be getting closer to finding out.

Simmons is believed to have ultimately left ESPN after extreme frustration with president John Skipper’s unwillingness to allow him to monetize his projects, which also included the well-respected Grantland blog. It doesn’t appear to be 2014 anymore in the world of venture capital, but that doesn’t mean Simmons will strike out in the biggest game of his life. Whether he can is a debate Forbes and Business Insider, among others, have been talking about for the past two years stemming from the idea that Simmons and ESPN were ready to split as told by Forbes Michael Wolf.

"But perhaps the biggest oversight is looking at just the number of visitors a guy like Simmons get to his website or podcasts. While I have no doubt that Simmons could draw a decent audience, his following of high-income, rabid sports followers is exactly the type of audience that advertisers pay a premium for.Maybe I’m wrong. Maybe the new media startup funding bubble is about to burst and BI’s view that Simmons couldn’t get a fat check is right. But I doubt it. If SimmonsCo is fishing for funding, I have a feeling that he’s getting quite a few people calling the Sports Guy."

What we do know is this: Simmons lives on the fine line of impulsivity and genius that just happens to be a risky combination for venture capitalists who are looking to get the best deal for their firms at the right price.  It has worked for him in the past so we should expect it to translate into the business world. Simmons is an established and proven winner and his star power is unmatched, which ultimately may be the deciding factor according to Nussbaum, who points directly to Derek Jeter’s venture The Player’s Tribune as an analogy.

“I don’t think he’ll have any problem raising money because of that star power. There are a lot of very big VC firms that will back him given his brand and track record as long as he’s not raising a ridiculous sum of money at a crazy valuation,” Nussbaum added.

“The Player’s Tribune had no problem raising $10M and while he may not find a firm to write a check for $20M, I’m sure there is no shortage of smaller checks looking to participate at smaller amounts that add up to a larger amount.”

We’re about to find out what that’s worth and just how much losing Simmons will haunt ESPN in the process. That validation is something I’m sure Simmons just can’t wait to celebrate.

And I’m sure we’ll read all about it on Twitter.