Imagine owning stock related to an up-and-coming professional athlete’s potential future success.
If the player begins to perform well and beat the odds, your investment grows, and you make money, but you can also lose money if the player fails to meet expectations.
It is an interesting concept that, until now, was only available to accredited investors through hedge funds, but a new company called Finlete, inspired by the trajectory of MLB superstar Fernando Tatis Jr., is concentrating on bringing the practice to the fans and allowing them to be more invested in their favorite players than ever before.
“I remember the first time I heard about him. Mark McGwire was a coach for the Padres at the time, and he had mentioned this prospect, Fernando, they were really excited about, and that really started the whole hype around him,” Finlete founder and CEO Rob Connolly recalled to The Dallas Express. “When he signed that massive contract, and he had to pay millions of dollars to this private hedge fund, I thought to myself, ‘What a very interesting concept. Can we do better for the athletes and fans, though?'”
“So our motivation was, what if we could find a way to allow fans — both accredited and nonaccredited — the ability to invest in these players through our company?” he said.
Connolly and his colleagues worked on making that vision a reality over two years, developing a model that accounts for varying factors among players and concentrating on minor league baseball players outperforming expectations.
The company took a significant step forward when it closed a deal with Texas Rangers prospect Echedry Vargas, a 19-year-old infielder from the Dominican Republic who spent last season between rookie ball and Low Single-A. After launching last week, Finlete expects his shares to sell quickly.
“We’re giving him the best opportunity to find success on the field, and I think there’s a lot of good in what we’re doing,” Connolly said. “Let’s face it; there is a chance he may not make it in the majors. We’re not naive to that. It’s no guarantee, but we believe in him. We believe he’ll make it. That’s why we’re doing this.”
Even if Vargas or another prospect does not reach the pinnacle of their respective sport, the company is set up to help them succeed.
“This creates a little bit of a safety net for him,” Connolly explained. “If things don’t work out, he has a bit of capital that helps in his future… It’s all about the journey for us. We’re giving fans the ability to be a part of it.”
The Echedry Vargas Preferred shares will help Vargas continue his training as he marches toward the Major Leagues.
“What we’re doing is building an entire community around these prospects,” Connolly added. “I want to support them and see them be successful, and we eventually are going to get to a point where we’re going to be able to quantify the value of a community supporting a prospect. That’s going to open up even more doors for us.”
While the company’s roots are in baseball, Connolly believes the company could soon venture into other areas of professional sports where athletes and fans alike would benefit from Finlete’s concept.
“We don’t see a limit to where we can go,” he told The Dallas Express. “We’d love to get into all types of sports, and in all kinds of ways, creating really unique opportunities for fans that build connections with athletes… I think it’s a huge opportunity.”