Last Updated on August 1, 2022
The college sports world has seen an abundance of NIL innovation over the past 12 months, and that trend is continuing into the legislation’s second year.
For boosters and others looking to get involved in NIL, Moonshot is offering a new way to invest in athletes beyond just donations. While boosters can already contribute to their favorite athletic programs through collectives, Moonshot is bringing an investment aspect to the equation. From investors’ potential for profit and bragging rights to the athletes’ abilities to jumpstart their ascending careers financially, co-founder Dimitris Nikolaou and the Moonshot team believe their model is an attractive option for all sides.
BCS spoke with Nikolaou about his vision for Moonshot, how its model works and the future ahead. More information about Moonshot can be found on its website.
Q: How did you first conceptualize this company?
A: The way that my co-founder, Youssef [Rizk], and I started thinking about this was, we both got into NFTs back a year ago and we thought that an interesting case with NFTs would be income-share agreements where behind that NFT, there will lie a legal contract. An individual could issue NFTs to fundraise and in exchange, there would be that legal contract backing those NFTs. That fundraise could effectively become an investment for whoever would buy into the NFTs.
We’re both into sports, and there’s many sports where capital is a requirement to get your career going – for example, golf or tennis or motorsports, it’s absolutely necessary to have that capital to start up your career. Capital, in fact, acts as a catalyst to boost your career. In tennis, if you have more capital, you can go into more point-bearing tournaments in the beginning and your career and you have more opportunities to boost your career.
We’ve moved away from NFTs now for many reasons, but we’re extremely passionate about a world where you can have income-share agreements where the capital can act as an instigator and catalyst to propel your career, whether that is in sports or any other field. Sports is just the proof of concept.
Q: Why the NIL space specifically?
A: This application of ours is best for promising young athletes. The best promising young athletes in the US are in the NCAA, they go through the NCAA and capital may act as a requirement for all of those previous reasons. Just because we want to operate in the US and all of the talent in the US operates in the NCAA and, as a result, NIL, that’s why we wanted to be involved in it.
Q: Still just the second year of NIL – how does that make it difficult to ensure compliance with something so new?
A: The compliance aspect of it is a big thing. We’ve been working with some very good legal firms to ensure what we do is NIL compliant. In the NCAA, there have been cases of the NCAA preventing interesting methods of transferring capital to athletes in the past, so we wouldn’t want to fall in that category. It’s been a big part of our business to make sure it is NIL compliant, and it hasn’t been easy for sure.
Q: How do you see Moonshot separating itself from the pack, and why is this the best option for student-athletes?
A: Most NIL deals are small sums of capital where young athletes can start building an image of themselves and start monetizing off their social media presence. What we’re offering here is ultimately for the elite athletes, the ones that will make a profession out of this, because the payoff and return of the capital will happen only if the person makes a career out of this sport. For those athletes, this is far and above the best solution for them, because it is a very sustainable method of, one, them raising capital on their way forward and two, connecting them to a group of backers that will probably follow them for the rest of their lives. Potentially, these football and basketball stars, they might not need to acquire the capital, they know that they’ll make it in their respective league. What is important is they can use this mechanism as an insurance policy because it’s never guaranteed they’re going to make it. At the same time, they’re receiving a transformative, life-changing amount of capital.
Q: What type or sport of athletes are you targeting or looking to add to the team?
A: For individual sports such as tennis and golf and motor sports, this is a great application because the capital might be utilized properly by the athletes to propel their career. If a sophomore or junior or senior is on their way out and wants to start their career, they’re going to need that capital. Those are the sports where this is really required. The other sports, the major sports like basketball, football, soccer, the capital might not be required because the facilities are taken care of, the athlete has everything they need, it’s also used for those athletes for the insurance aspect of it. There’s these two aspects, the insurance aspect for the major sports and the necessity aspect for the individual sports.
Q: What feedback have you heard from student-athletes? From collectives?
A: From the athletes, we haven’t received any negative feedback. The fact that they have the ability to share their future success, it’s basically risk-free for the athletes. Usually, the way that this is structured is something like $250,000 for five percent of their rookie NBA contract, five percent is not that much especially if they actually make it. For the athletes, the feedback is very positive, they just want to be assured that this is NIL-compliant and make sure that they’re not going to find themselves in trouble down the line.
The interesting side is from the investor base. That’s the one we’re having the most fun with, understanding who is the correct investor base. What we’re finding now is the boosters behind the collectives that are already donating money and the play that we’re finding that resonates well is ‘why donate when you can invest.’ The money is directed to the athlete that you would be donating anyway to. Here your incentives are aligned that you can invest a larger amount and properly help this individual to properly succeed in their career. Interacting with alumni and informing them of this thing, it’s generating excitement because most people have been backing these collectives for a while and have been giving $100 to $1,000 a year just because they want to see the Tar Heels succeeding. That’s totally fair, but we’re proposing an alternative method where they can actually make a profit out of this. It’s not so much for the profit, but mostly for the bragging rights and the benefactor aspect of it.
Q: Where do you want to see this company by the end of the 2022-23 athletics season? Do you have an ultimate goal for the company?
A: The ultimate goal is to enable anyone to be able to go on this platform and make a listing for themselves and market themselves to our investor base, and the backer base can back them if they think they have an interesting profile. Just open this to everyone and we’ll have over thousands of athletes, and not just athletes but thousands of endeavors on Moonshot. That’s the ultimate goal.
The next step for us is partnering with collectives backing universities as a means of connecting with the investor bases and athletes directly. Just partnering with as many collectives as possible would be the immediate next steps.