⭐Upside VC Profile: Drive By DraftKings & Chat with Meredith McPherron, CEO & Managing Partner.

VC name: Drive by DraftKings

Headquartered: Boston, MA

Founded: 2021

Managing Partner: Meredith McPherron

Website: https://www.drivebydraftkings.com/

Sectors: Gaming, Fandom, and Human Performance

Investment stage: Multi-stage

Typical investment range: $500K - $2.5M

Total number of investments: 21

Source: Drive by DraftKings

Drive by DraftKings is a multi-stage venture capital firm investing in SportsTech and Entertainment. Drive's mission is to push the frontier of new markets and categories revolutionizing sports, gaming and media. For more information visit

https://www.drivebydraftkings.com/

As part of that this week, we interviewed Meredith McPherron, CEO & Managing partner of Drive by DraftKings, a leading sports tech venture fund. We discussed her background, investment thesis, her areas of focus, and what she is typically looking for when investing in startups. She also gave us her advice to raise money and to start a career in sports investment.

Best Quotes: Here’s some of the key discussion points and best quotes from our conversation with Meredith:

• On her background:

  • “I have a background both in sports and venture creation. Both have been a big part of my life. I was a college athlete and a parent of three college athletes. I also grew up with two entrepreneurs as parents.  They invested a great deal of their human and financial capital into new ideas and businesses that could change the world. Both of those forces shaped my personal and professional life  in my early years”.

  • “Professionally, I spent the first part of my career on the operating side learning the art and science of leading, launching and accelerating new businesses both with startups and also with a bigger enterprise. That experience was important as an investor to understand that journey and be able to connect authentically with entrepreneurs”.

  • “The second part of my career focused squarely on investing first as an avid angel, both independently and together with the bigger syndicates, and then second running the Entrepreneurship Center for Harvard Business School, at the Rock Center for Entrepreneurship. That really helped me connect with the youngest entrepreneurs, to accelerate their big ideas and help to fund and mentor them”.

  • “The third part of my career, I worked closely with a PE firm on a later stage investment. That was interesting because it was about accelerating and selling that company, which also is a big part of venture. And then I worked as a venture partner for Glasswing Ventures in the AI space, which is super relevant today, as you know, before coming to Drive by DraftKings and founding and launching our first fund”.

• On her tech fund Draft by DraftKings:

  • “We are a sports tech and entertainment venture fund. We are fully independent, although DraftKings is in our name. DraftKings is an anchor investor in our fund. We have a strong and close relationship with them.

• On her fund’s areas of focus such as gaming, fandom and  human performance:

  • “We're focused on three verticals: Gaming, Fandom and Human Performance. We have 19 companies that we've announced and two more that we are announcing soon. We're positioned as multi stage with the flexibility to invest across all stages, but we're always looking for early stage venture returns and are really primarily seed led”.

  • “We are founder focused. We take lead positions in many of our seed deals, board observer positions in most of our core positions. And we really dig in with founders. We are very focused on their journey, helping them with capital, connections, and commercial access when needed.  And we reserve capital for follow-on investments to help them scale.”

  • “The startups in our portfolio are aligned with our investment strategy and focus. In Gaming, we look at companies focused on real money, skills, mobile and video gaming. In Fandom, we are focused on content, event innovation, immersive tech, ecommerce and more. In Human Performance, our primary interests include performance optimization, recovery, injury prevention, mental fitness, and overall health and wellness”.

• On what she is typically looking for when investing in startups:

  • “As I mentioned, we look at companies within our core investment themes. That’s the first cut. After that, there are several filters that are really important for us”.

  • “First, and most importantly, we are looking for world class teams. This is critical. People who have a unique insight into how they're going to disrupt, out compete or create new markets. We look at their insight, experience, and ability to build an A team right off the bat”.

  • “Second, we like to see large and growing TAMs. And that can be tricky sometimes if founders are creating a new category. How do you describe that TAM? This is where intersecting growth trends across markets are important to understand. We also dig in on how founders will achieve target market penetration within large markets, their plans to achieve scale and tailwinds driving growth.

  • “Third, we look for differentiated products or business models. However, this filter depends on the company’s stage of development.

  • “Finally, we are also looking for a business model durable over time and that will scale. Gone are the days where it's just growth at all costs. We're looking at companies with efficient go to market strategies and strong retention characteristics. We like favorable unit economics and being tech centric, asset light models with attractive margin characteristics''.

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