From Cold DM to Owning a Soccer Club

Okay wait so what the shit is all of this? Who are the Soul? What are the Roots, and why isn't Geordi LaForge involved in it? Who the hell are you, anyway?

I had heard about Oakland Roots since they started, and was a huge fan of how they talked about the club, their commitment to the community, and honestly, their branding was fucking incredible. They got Matthew Wolff to design the logo. Matthew's done pretty much done all the recent great work for clubs globally: LAFC, NYCFC, PSG, the legendary Nigerian kits, god, everything. I'm a fan.

The logo caught my interest, but the brand sucked me in. Punched far above their weight class, and it had a feel that I had been waiting for years to see from other clubs I had followed. They had such an emphasis on Oakland. And that's really the end-all, be-all: let Oakland be Oakland.

For years I had practically told everyone in any single bar I stepped foot in that if I could "invest in American soccer" I would. MLS was expanding like crazy, with expansion fees alone that were larger than valuations of 100-year-old clubs in England. The USWNT had continued to win World Cup after World Cup, and the USMNT were looking really threatening (before, uh, Trinidad, but don't worry, we're back on track again). It's just not too often you have the largest economy in the world suddenly — over decades, of course — discover a pasttime that the entirety of the rest of the world has known for years.

Initially I wasn't going to write specifics about the finances involved, but then I realized there was a very good reason to. The reason I came up with is: "fuck it". Again, the sports world seems like so many shady backroom deals, and putting some real numbers to the problem makes it just that less shady.

For most sports organizations, it's not really a one-and-done thing. Roots are no different. I've invested ten times into the club. Here's the detailed breakout of my wires:

I've definitely had better returns, both in the public markets and in the private markets. No, it's not the best investment in the world (yet). Even with valuation increases, the amount of yearly burn makes it pretty cash-greedy and impacts the return profile. But if life were just about financial returns, I'd invest in oil companies or some shit.

One of the reasons I feel comfortable detailing some of this is that so much of the Roots' finances are public at this point, because of our two public crowdfund campaigns (thanks to the JOBS act: thanks Obama!) The current crowdfunding campaign ends in a few days (January 31, 2025!) and it's a great way to peer directly into the finances whether you're an investor or not. It's reached its target raise for the round, but still taking investments- minimum is just a hundred bucks. All the nitty-gritty financial details are in the financial statement linked halfway down the page.

Crowdfunding vs public vs private ownership

Man, I really love that Roots did a public crowdfunding campaign. In 2023 we raised the largest public sports crowdfund of all time: $3.6M from 5,400 new investors, including Billie Joe Armstrong (Green Day), Jason Kidd (NBA), G-Eazy (rap), and many, many other notable figures. We're currently in a second crowdfund campaign.

I think it's great to have public ownership. Ideally, the whole club is owned by the community. Unfortunately the math doesn't really math.

American teams like the Green Bay Packers are owned by half a million fans, but the NFL (among many other leagues) has now outlawed that type of ownership. German football clubs follow the Bundesliga's excellent 50+1 rule, which ensures control of the club stays with the fans. In the US, though, team valuations have been so high for so long that, particularly for recently-formed clubs, it's really difficult to generate that type of demand from fans to buy in.

If you're looking strictly at Roots: over the last seven years the club has raised $60M from investors. Current valuation is around $93M. That's a lot of burn, and we'd have to raise our first crowdfunding round 20 times over to achieve that.

And honestly? I'm not sure early-stage clubs should be entirely fan-funded. It's a really fucking risky investment. It's actually do or die: either Roots are going to be wildly successful, or the club is going to fold and the investors are going to lose all their money. There's not likely to be an in-between here. I worry a lot about the type of money that goes into the club, and the implications of who gets impacted if the stock price goes to zero. Fans already put so much into the club as fans.

I like having an SPV of 6,000+ investors on the cap table. Last season we had roughly as many investors as we had seating capacity for them in the stadium. Having a big tent opens up a more direct line between fan and majority ownership, and lends itself to the possibility of community votes and public decisions down the line. It's a different accountability from ownership compared to someone who bought a ticket once and has Lots Of Opinions Online.

But damn, it's a really tough problem, though. Money versus fandom. Not unique to American soccer by any stretch, although certainly exacerbated by our lack of pro/rel and league franchising and ownership decisions made decades ago and many sports ago. Down the line, though, once the club is on a more stable footing? I'd personally love to see diminished ownership by existing investors and increased ownership by the community itself. (Not by "yet another dumb city buys the sports team a stadium", though: though actual ownership by fans, with actual participation on the cap table.)

I'm a soccer sicko.

I watch U-15 tournaments from the other side of the world at 3am. I'm an unabashed diehard of one of the best cup competitions in the world, the US Open Cup, watching like eight games at once during those fun early rounds. I have many opinions on why the world needs to adopt 90s MLS penalty shootouts, or why the '00 adidas Predator was the greatest boot of all time. But these are all from the fan side of things; ownership was eye-opening, to say the least.

It's kind of like — or actually, come to think of it, exactly like — moving from being an employee to being a founder at a company. There's so many cases from, say, your first job where you suddenly think "oh shit, that's why they did things that way". I mean, you still don't agree with it, but you at least have context for why your manager did that stupid fucking decision you're angry at years later, for example.

A lot of it is just seeing context for the other side of things. Why did that one crowd favorite leave the club? Well, there are reasons behind it. Why didn't this player pan out, or that player develop well? Well, turns out it's really hard to manage people, whether you're at a startup, or a soccer club, or a McDonald's.

All this has been really interesting to see the other side of the curtain, so to speak, and there are a few reasons for it.

The fans are morons

Guilty as charged. I'm an absolute shithead when it comes to my fandom. I played varsity soccer in North Dakota twenty years ago, and then some soccer for fun every now and then afterwards. Like, I have no idea what I'm doing. And yet, here we are, at a bar or at home or on a reddit thread, yelling at each other about some player's performance on-field based on the 90 minutes we see of them once or twice a week on TV.

This, like most things in soccer, is not too dissimilar from all sorts of other things in society. Dunning-Kruger all the way down. Everyone has opinions, but they're not always opinions worthing listening to.

If a fan has a Really Wrong Opinion and is pissed about it, though, it's still important to identify what they're directionally talking about. Classic soccer example is "THIS GOALKEEPER IS TRASH!!!" when maybe its the backline with issues, or set pieces are a disaster, and so on.

This is the case for building product in tech, too- with GitHub we’d constantly see horrible fucking ideas proposed to us in an attempt to improve some deficiency in the product. This is exacerbated when the customer ("fan") has more short-term thinking than you: they have a problem with the product right now, and they don't care that you're planning on revamping and improving the entire feature six months or two years or whatever down the line. They have real feelings today. Identifying that directional anger, even though they might be "wrong" about the feature specifically, might lead to you finding them a stopgap solution in the interim, or moving up your long-term plans. Or you realize you're the one who's wrong with all this after all. Or you can simply just offer to talk with them directly and give them more context; sometimes that alone can help a ton.

It’s super hard but like… people don’t get pissed off unless they care. Once you stop seeing feedback entirely... that’s when you’re truly fucked. Then they don't care at all.

The fans are geniuses

The opposite is true, too: it's unbelieveable what sort of insights and understanding can come from the fanbase as well.

You can't fake the product in football, not really. Either you have a great squad and perform well, or you have a great game day environment, or you make an impact on your community... or you don't. People have way too much shit going on in their lives right now to fuck around with a club that isn't putting in the work.

In that sense, fans are incredibly sophisticated these days. They know what they like, they know what they want to spend their money on. Used to be your grandpappy would spend -20°F winters with their butt outside on a bench watching their alma matter lose six straight decades of college football, because that's what their own pops did, dammit. Now Taylor's dropping a new album and coming three states away for a show and you have to drop six months' salary to see her show because she's goddamn the GOAT, now what are you talking about with this soccer stuff?

You can only toss so many hot dogs into a silent crowd before they peace out because of how corny it all feels. Unless it's corn dogs. Shit, I don't think I've seen corn dog tosses to the crowd very often, gonna have to send that up idea the tree next.

Technically and tactically, fans can be incredible, too. Even in USL, merely the "second tier" of soccer fandom in a country that allegedly "doesn't like soccer", the journalistic side of things is a never-ending supply of fascination, and tactics, and the human side of being a fan. John Morrisey's tactical breakdowns on USL Tactics and Backheeled are gold-standard. The crew at RootsBlog do amazing in-depth analysis and game day threads of everything Oakland Roots. The Union Report posts so much about Monterey Bay FC that I feel like I know more about that club than my own sometimes (just kidding, RootsBlog). And there's so many in-depth podcasts and videos coming from journalists like Cheyenne Foster. Really makes you think... sheesh, we're finally building something incredible in this league, and in this country. Proper footballing nation, innit.

Supporter groups are sacrosanct

Part of this is talking my own book; I help with the American Outlaws both locally and nationally for US Soccer, and I've been a part of San Jose's supporter groups in the past, too. You'll find me in the supporters section at any given game I'm at.

Supporter groups are just that: groups of fans who get together to support the team. They're the ones who sing the songs and wave the flags. They travel to away games, they bring their friends to games, they volunteer and donate to the community. It's actually kind of nutty how much time, energy, and money goes into being a supporter of a club.

But supporters are the ones that deserve — amusingly — support. Not really financially, since directly funding them puts them (and the club) in a pretty strong conflict-of-interest with each other. But simply supporting their existence, giving them a voice, keeping ticket prices accessible, and letting them do their thing is so important. The atmosphere they create is, well, honestly, what many go to games for. That's why a game with the Yellow Wall is a bucket list item for so many, and why some of the stadiums in the Prem are libraries.

It's a tricky balancing act, because you want them to be independent groups, but you also want to help them thrive. But again- fans are sophisticated. You can't force them to feel a certain way, much to the chagrin of plenty of clubs who give out NFTs or some other weird shit in the stands. Some of the most memorable atmospheres I've been in have been a few dozen superfans on a couple bleachers at an Open Cup game, making up friendly chants about the sideline official's spectacular calves. It doesn't need to be much, but I refuse to be a part of a club without it.

Everyone should play Football Manager once

This is entirely stupid to say, but I'm not sure I trust fans who have an opinion on running a club if they don't have at least one savefile with Football Manager. Just cracks me up. Swear to god, that opened my eyes the most when it came to how hard it is to build a roster, cope with great signings becoming mediocre and bad players becoming club legends, and dealing with the balance of salaries and cap space and various local insanities (I will forever get a kick out of confident Europeans trying their hand managing an MLS club for the first time). It also makes you realize how different being a great manager is versus being a great technical director. They're very different jobs, although both need a deep understanding of the other, too. Fascinating stuff.

There's a phrase in venture capital that normal people take the piss out of all the time: "How can I be helpful?"

It's kind of an implication that most investors don't really add anything to the business besides their initial check. They're not sure what they can add, so they ask, "How can I be helpful?" At the very least, if you were able to fundamentally change the startup's trajectory, you'd probably already intimately know what the founders will need, or what questions to ask.

Roots have been a fun experience to figure out how I can be helpful!

First bit is enthusiam. I can't underline this enough: I'm sick of these old, billionaire owners who seemingly don't give a fuck about the teams that they own. Nothing makes me angrier than seeing the people in control of the thing that I love just not caring. So I try to bring that in spades everywhere I go.

For one, I'm a bit of a shitposter reasoned internet commentator. This was apparent far before Roots; I commented and posted and tweeted about the Earthquakes previously, and I definitely was overly-accessible when it came to early GitHub: I probably saw close to 95% of all tweets directed to @github between 2010-2014 (and responded to many, many of them). It's just table stakes to me: if you care about something, you talk about something, particularly if you can write it in a way to increase transparency, or if it's interesting, or you just want to talk about something you care about.

I mean, shit, that's what I'm doing here. Breaking the fourth wall and all of that: I want to write an embarassing quantity of words on this post because I want you to learn more about Oakland Roots and Soul, I want you to think about investing in the crowdfund yourself, and I want you to be more passionate about American soccer.

Regular readers of this blog will notice that, at times, I have written embarassingly long reads about things that matter to me. Usually it works out great: people like learning about how things tick, people like hearing stories, but most importantly... people love discovering what deeply impacts someone else, be it joy, sadness, excitement, anger, whatever. Life would be far too boring to not have strong feelings about certain things. So yeah, of course I'm going to write loud and proud about my favorite fucking thing ever. You obviously care an iota about it too, otherwise you wouldn't have made it this far, either. You're a soccer sicko, too; greetings.

Most organizations need the same stuff

And that's usually along the lines of: people, connections, money. That's it, really. All the mindless thoughtleading about venture capital and endless podcast episodes and it mostly just boils down into "can you help with people, connections, and money?"

So I've helped with that. I've referred friends and contacts for hiring, I've made connections between other clubs and investors up and down the US soccer pyramid, and I've invested money. Part of what I've learning is that soccer in particular is a more-than-young-man's game: if you're trying to find other large dollar amount investors, they tend to skew older and male-r. Like, extremely. It's an area I'm trying to break into further, but in that sense it's a bit different from, say, angel investing in tech, where some rando 22 year old might actually be a billionaire. (I'm turning 40 this year, so I guess I'm also becoming ancient in some peoples' eyes, but I certainly feel a decade or two too young in this area.)

Also: if you're part of the younger end of the spectrum and actively invest or donate money to local soccer issues and facilities, be it here or internationally, shoot me an email! I'd love to chat. I'd also love to write a post about donating to soccer organizations in the future, really; I've found that a little bit goes an insanely, stupidly long way, particularly for local soccer organizations. It's wild, and goes far beyond the game itself.

Some organizations need different stuff

I mean, it's a soccer team, and I love soccer. So there's so much weird shit that has been a joy to pitch in with.

A huge part of it is just showing up. Again, you purchased part of a club, so ostensibly you enjoy the actual game itself, no? So going to games, sending your tickets to others when you can't make games, and particularly showing up for away games can be a strangely huge bank-to-buck ratio. USL doesn't have a ton of traveling away fans; for one, America is big, and there aren't many driveable games. But that means that showing up for playoff games or regular season games in enemy territory counts for like, god, six billion bonus points. And it's almost always easy to strike up a conversation with local fans, learn more about what they're building, and tell them more about what you're building.

By far the coolest shit I've done as an investor, in my humble opinion, is wire an NFL training facility.

For years I had been tinkering with our home network, expanding it into a full rack, dodging persistent questions from my wife of "well why do we need to support 1,000 simultaneous clients on our wifi at home?" Dodging because, no, I had no rational answer. UNTIL I DID! In January 2022, the investor update mentioned needing wiring internet in the new training facility:

Years of learning how to wire and set up enterprise networking connectivity at home had led to a single tear running down my cheek as I said "HELL YES". And that's how I ended up on the roof of the former Oakland Raiders NFL training facility — which now Oakland Roots are the proud tenants of — running ethernet for my club.

So that's it. That's a lot of words about putting money into my love of a club.

I've invested in something like 200 startups; this is by far my favorite investment out of all of them. Everything hits different when you can actually bring your friend and feel the atmosphere, see the smiles. And wins feel fucking fantastic. (Losses, well, not so much, but hey we're talking about good feels here.)

It's a great time to be a fan of the club: we're moving into the historic Oakland Coliseum in just over a month and a half when the season kicks off. I can't possibly convey how fucking excited that makes me. Join me for a game this season! If you're in the Bay during our season, drop me a line: I'd love to meet you at the Coli and say hi. Away fans can absolutely take me up on it, too. Except for Sacramento fans. Just kidding. Probably.