Atlanta Falcons owner Arthur Blank announced four new limited partners are joining his ownership group following NFL approval. One of those partners, Family Office Investor Rashaun Williams, joins Wealth! to discuss the move’s significance and his biggest investment tips.
“I think Atlanta is a very special place and I think the Falcons hold a very special place in the community for Atlanta. And I’m just appreciative of the opportunity that the organization and Arthur Blank gave to us,” Williams says. He notes how finance is changing in the sports and entertainment world, as individuals are increasingly “aligning with VCs and private equity guys. They’re not just getting deals from random people in the streets anymore. They’re literally aligning themselves with the top 20 venture capital firms and getting in these deals and getting these exits.”
He highlights two major market insights all investors should know, starting with the AI boom. He points to AI as a major catalyst in the quantum, tech, and cybersecurity sectors, ultimately driving the growth of the S&P 500 (^GSPC). “The second thing is within those industries, there’s a large disparity between profitable, late-stage unicorns and unprofitable companies who still need funding every year in order to continue operations,” he adds. He explains that the latter is being penalized with lower revenue multiples due to the current interest rate environment, which could be a buying opportunity.
He also recommends index funds, especially those in the tech sector, as he views the current market as “very risky.”
For more expert insight and the latest market action, click here to watch this full episode of Wealth!
This post was written by Melanie Riehl
Video Transcript
The NFL season may be a few months away from kick off, but that doesn’t mean teams aren’t busy filling out their rosters, securing new sponsorships or even bringing in some new owners and partners.
Late last month, Atlanta Falcons owner Arthur Blank announced four new limited partners are joining his ownership group following approval from the NF L’s full ownership.
Joining me now is one of those limited partners, venture capitalist, Rashawn, Williams Rashawn.
Great to see you.
I mean, when I saw this come across, I was just like, let’s go.
Finally, it’s about time we get more people who are getting a seat at the table and representative of so many of those players who are also involved in the league’s operations on a day in day out basis.
Uh uh What, what is the significance of this from your perspective?
What comes next after this?
Well, Brad, first of all, it’s great to see you.
You know, I’m a huge fan been following you for years and years since visiting you on the New York Stock Exchange years ago.
Actually, during the Lyft IP O I see you have the Lyft Ceo coming up later.
This week for earnings.
Um, look, I think Atlanta is a very special place and I think the Falcons hold a very special place in the community for Atlanta.
And I’m just appreciative of the opportunity that the organization that Arthur Blank gave to us and we’re just gonna try to be the best LP S that we can possibly be and really give back to our community.
I mean, you are no stranger to kind of having a, a line of communication with so many of the athletes, either falcons related or non falcons related as you’ve been able to kind of work with them on their own investment and wealth building strategies.
What are the considerations that they’re making now differently about how to put their wealth to work and making sure that they’re making money and they’re growing out their wealth passively or actively.
Yeah, brand, like you mentioned the last 24 years, I’ve been focused on the first generation wealthy or the quick wealthy or the underserved community in terms of teaching financial literacy, all the things that I learned on Wall Street at Goldman Sachs and as a venture capitalist the last 24 years.
And there are a few things that I’ve been teaching guys and mentoring them on the most important concept that all athletes NBA MLB or even someone that just exited a tech company or someone that just left Wall Street and has $5 million and has never done anything other than investment banking.
Right.
But they’re 34 years old.
Very similar concepts.
Number one, become the general manager of your own finances.
One thing you’ll notice that successful millionaires and billionaires do is they make their own investment decisions and they have a very qualified team around them.
They don’t have to be on the field running plays or calling plays, but they have to be the general manager making sure they reward the people doing well and they kind of reads that their portfolio when things are not going well.
That’s one thing that we don’t see.
I would say first generation or athletes, entertainers do that much.
They usually hand that off to someone else who tells them, hey, trust me with your money, you just focus on that thing that you do.
The second thing that you’ll notice that is happening in this society now that wasn’t happening 20 years ago is that athletes are finally figuring out and entertainers, the wealthier, you become the less you need a financial advisor.
This is something that billionaires have known for decades.
And it’s a very simple conversation.
Look at the configuration of wealth for billionaires and it’s 90 plus percent alternative investments, businesses, they own real estate, they own less than 10% of their portfolios are actually stocks and bonds.
Yes, that 10% represents $200 million but it’s still $2 billion in alternatives.
So if you want to invest and grow your wealth, like the wealthiest people in this country, you have to own private businesses, you have to own real estate.
And then the last thing I’ll say is the successful investors in this industry align themselves with financial coaches.
Think of a financial coach as a person that’s putting in more money than you doing more due diligence in you and has a track record of actually making money.
That’s the thing that you see that’s happening with athletes and entertainers.
They’re aligning with V CS and private equity guys.
They’re not just getting deals from random people in the streets anymore.
They’re literally aligning themselves with the top 20 venture capital firms and getting in these deals and getting these exits.
You know, it, it’s particularly interesting.
You, you’d mentioned Lyft and us speaking back when that company was going public and I think about the number of private companies that you’ve kind of baked into your investment thesis.
What, what is maybe one of the most compelling thesis that’s out there right now or themes that’s even out there from your perspective.
Yeah, I would say industry wide, everyone’s been focused on cybersecurity, quantum protection and quantum computing and A I for the last five years.
It’s becoming uh you know, news headlines now with A I, especially because of all of the revenue growth you’re seeing uh in that space and in that industry which is driving the S AND P but in the private markets we’ve been dealing with the A I and the quantum and the cyber for the last 5 to 7 years easily.
So that’s first and foremost, the second thing is within those industries, there’s a large disparity between profitable late stage unicorns and unprofitable companies who still need funding every year in order to continue operations.
And those companies that are not profitable are getting penalized with lower revenue multiples than the ones that are profitable because of where we are in the interest rate environment.
So there are some buying opportunities if you can buy some of these companies, knowing that we’re coming into a different cycle on the interest rate side and kind of ride that multiple expansion that a lot of investors like myself are, are taking advantage of a lot of people out there.
They say, hey, I can’t get into some of these private names and, and I have to wait for them to come public.
Should people be jumping then at those companies when they do come public or what’s the best due diligence that they can implore once some of these businesses are finally able to make it into the equity markets.
Yeah, I I hate to say it because it’s a very risky market, but I highly recommend people just do index funds and not try to pick the winners.
It’s very difficult.
Even the people who are paid to pick the winners still get it right.
Only 30 plus percent of the time, right?
So if you are a retail investor or a part time investor, I highly encourage you to do something like a QQQ.
If you want to capture a lot of the technology companies, it’s been averaging 18% returns the last five years.
It was up 54% last year.
Obviously, it’s more volatile.
So on the down market, it’ll, it’ll underperform versus everyone else.
But if you want to really capture a portfolio of technology companies that are public, I would highly recommend an index fund or mutual fund that represents tech.
Now, in terms of picking your spots, look, if you can get into an IP O which literally only the top investors in the country can really get into or after it’s free trade that day, go for the biggest and the best go for the ones that are profitable right now, you’ll get rewarded.
And if you’re feeling really adventurous, go for the ones that you think in the next few years have a path to profitability, but stick in those three industries.
Uh quantum uh cybersecurity and A I and I think for the foreseeable future, you’ll be fine.
The only thing that’s adventurous is my golf game rashawn.
Uh Just lastly while we do have you, you know, the show is called wealth.
I, I gotta know for people who are trying to actively build wealth.
What’s your number one piece of advice?
Uh The number one thing I would tell folks that I’ve actually never heard any financial advisors or financial gurus say anyone.
So you’re hearing it here first, Brad, because you’re my guy.
Is this very simple question, what’s your number?
And what I mean by that is what percentage return do you need on your investable assets for your net worth to double in the next 10 years?
And if you wanted to expand on that, what percentage return do you need on a portion of your assets to live off of passive income?
This is the problem where people who have $10 million and they retire at 35 if you’re only getting 2% returns, but they need 10 in order to grow an internet work and live off passive income, there’s a slow leak to the bottom.
So you always start from what number do I need?
Not?
What number am I getting?
What do I need?
And then you align yourself with places that you can get those returns, whether it’s stocks, real estate, private equity, venture capital, franchises or bonds or in this case, even money markets at 5%.
So start out asking yourself what is your number?
What percentage return do you need?
Not what I’m giving.
And then you find the best team that can help you accomplish that goal.
Always a wealth of wisdom in your words of Sean Williams.
Thanks so much for joining us here on Yahoo Finance.
It’s great to see you.
Good.
To see you.