The Exchanges

Q Let's break down some of the aspects of that. So the first, you mentioned your team. What is the structure of your team today?

A So we have three or four main silos and each silo has basically a leader. We run a very flat organization is myself is Kelly. It's Lisa who runs investment, head of investments. Aaron Knight runs a real estate business with Stuart Zuck. I don't micromanage anything. I'm more of a player coach. I get out of their way because things happen better when I'm out of the way, and I really focus on the VCP part of it, right? The vision, the capital, and the people. They're way smarter than I am, so giving them that room to run is really important to me. The idea behind that is that if you execute VCP, vision, capital, people, You can scale in so many different ways. And me as, as a founder and leader of our company, I can go out and do the really big things, whether that's a Warren Buffett or doing things with other types of leaders like magic with strategy and the vision and finding the capital and the right partner to go out and execute. And I spend a lot of my time recruiting as well.

AI assessment note: “we have three or four main silos and each silo has basically a leader.”

Q back to the show. I'm sure there'll be more to say about this down the road, but let's turn to the venture business. I know you've done a lot of venture investing previously, and now you're going to do a fund with Mark Laurie. So why don't you walk me through how you got into the venture business, what those investments look like today, and where you're headed with it?

A Early on, I started probably about a decade ago making smaller investments, anywhere from two 50 to a million dollars. And a lot of it was knowing that I would make a bunch of mistakes along the way, but I wanted to learn great lessons. And I felt that if I made a good return, not a great return, but I had incredible lessons to learn. As long as I predicted my downside, this was an exercise worth doing, especially the last five or seven years of my career. So I started doing that with small investments in like Snapchat, Vita Cocoa, UFC gyms, and I started doing some smaller investing, and then I started really kind of getting my footing, and as I retired, then I kind of hired my team and started rolling up my sleeves and really understanding what is a wheelhouse, where do we bring the most value, and then that's how we got into investments like him's and hers and others, because we had the time, the energy, the resources, and the team to allocate to our partners and our founders, and we look at founders just like Scouts look at a young Robinson Cano or Derek Jeter or the next great player coming up. We're making bets on founders that we believe in that have VCP in their DNA.

AI assessment note: “Early on, I started probably about a decade ago making smaller investments”

Q Where along the path in your career did you sort of get to the point where you were comfortable enough to know that if you just did things your way, things would work out?

A Well, for me, the big change in my life was the suspension in 2014. That was the toughest time of my life because I made some poor decisions. I surrounded myself with the wrong people, and ultimately I had no one to blame but myself. And accountability is the lesson that I had to learn the hard way. And I put myself an entire season, the longest suspension of Major League Baseball history. And that was a tough pill to swallow. But I was really down and out that it was an entire season because I was hoping it was like a third of the season, maybe half a season. It was a blessing in disguise because I needed that entire year. Now think about this. Ever since I was 15 years old, my high school coach said, you're going to be the number one pick in the country in three years. I looked behind me. I said, who are you talking to? He said, number one pick. Since I was 15, so now you can take a sprint from 15 to the time I got suspended. There's a lot of yeses, not too many no's along the way, and my father left at 10, and I needed my father to grab my, you know what, kick me in the butt and get my ear and just twist it about 50 times, and maybe I wouldn't have been such a knucklehead when I was older, but what I realized was that I needed that year to reset. And a lot of people needed to just kind of do a makeover in your house, paint the windows, paint the walls, fix the roof, and you …

AI assessment note: “the big change in my life was the suspension in 2014.”

Q So let's go with that game plan analogy. You're now the manager of the team, you're going onto the field. What is that game plan, right? You have a story when you're going in to meet with someone, you might be interested in investment, whatever it is. What have you sort of formulated into kind of what the story of A-Rod Corp is?

A Yeah, that's a good question. For one is we are a company that I believe under promises and over delivers. I think we are A company that likes to go narrow and deep and not wide and shallow. So part of our challenge when we come in is if Ted wants to do a deal with Arod Corp, your first thing you should be thinking about, like, well, Alex, you have a million things to do. You're here, you're there, you're everywhere. How can you really perform? And I think that when you spend time with me, and more importantly, my team, you will realize that we have an institutional team that hasn't been Incredible track record. And then when you look at our partnerships, whether in real estate or venture, you'll realize that our track record is impeccable. And that if you talk to our founders and partners, they want to do more with us, not less. We like that model where we want to do more with people we like, understand, and trust, because trust is the biggest thing. And our partners trust us. And that's something that we take a lot of pride in. You take hims and hers as an example is we made an investment, a significant investment about two and a half years ago, the business Was valued around three hundred million dollars, but it was telemedicine for the masses at an affordable price. Now that resonated beautifully with me because we couldn't afford to go to the doctor once a month or twice a…

AI assessment note: “we are a company that I believe under promises and over delivers.”

Q So let's dive into these three most recent areas of the business. I guess why don't we just start chronologically with Slamcorp and the SPAC. It was a hot market, cooled off a lot. How are you thinking about that business today?

A In many ways, we actually like the things that have cooled a little bit, because I think the point of entry becomes more challenging. And that's why I'm so happy that we picked it. Antara is our partner. Number one, they have a lot of the virtues that we don't have at ARC. They're very institutional. They have institutional capital. Blackstone is their top investor. You know, they're looking at it from a debt side, so they're very conservative, very wise, very frugal investors, and they're gritty as heck. So I loved all those things. We're very much on the commercial side. We're in the retail market. We can market and brand A story really well. So the institutional gritty Antara with what we do on the front end together, we felt like one plus one equal to three. So that, that's kind of how we thought about that. The reason why I didn't want to get into the SPAC market is if we didn't have that institutional arm, then we weren't just going to compete and try to be a B or C. We wanted to do it like everything we do at the highest level.

AI assessment note: “In many ways, we actually like the things that have cooled a little bit”

Q I'm curious what lessons you've learned about branding. Your baseball career had ups and downs and then ups at the end and business career and what you've been doing is just been a straight up and to the right in terms of the A-Rod brand. What have you learned along the way?

A I don't really believe in branding. I believe in reputation. Branding to me, short term, when you build a reputation, a reputation for me is to do the right thing when nobody's looking. Reputation is, well, I don't remember the last time that I had to look at a contract and see what my rights were. Boy, if I have to do that, it's way too late. I believe in doing the right thing, regardless of what the letter says. I believe in fairness. One of the reasons why I put into work the If I can sell you this for one dollar, yeah, I can sell it to you for one 40 because I have the hammer and I have the leverage, but that'll be the last deal that I ever did with Ted, right? But if I can sell you this for nine bucks, when you know it's worth 10, then not only am I going to create good energy and alignment with you, but you're probably going to tell four or five friends that you actually like doing business with us, and there's a good chance that we're going to probably do three, four, five, 10, 12 deals together, and I'll take 90% on 12 deals. So again, long-term thinking, it just makes it a lot more fun.

AI assessment note: “I don't really believe in branding. I believe in reputation.”

Q And how does a sports team fit into that mix? So let's talk about the Timberwolves.

A Yeah, I mean, I think it fits in beautifully because if you think about who I am, is I'm an athlete that loves business, and when you think about a team in the NBA blends in all those wheelhouses. First of all, I don't see it as a sports team. Like when you and I grew up, franchise used to go for 15, twenty million dollars, right? It's crazy. The fact that George Steinbrenner bought the Yankees in 1973 from CBS for 10.7 million dollars with a million dollars of equity is like Flabbergasting. So I look at these platforms today more like media, sports, entertainment platforms that are, when you look at the NBA, it's a great league. It's a league that's global. It's a league that has joined its tailwinds. It's a league that has young demographics and growing. Africa just opened up. Asia is very big, and China, and it has wonderful leadership, a great commissioner, and there's a lot of things to like in the NBA, and what can we do with that franchise Well, if I did it alone, I probably wouldn't have done it, right? But I have an incredible partner, a fifty-fifty partner, Mark Laurie, who is a wizard when it comes to tech and marketing and all the things he's done with diapers, Jet.com, and Walmart. I think together with my sports background in business and what he brings in the tech side and his vision, AI and other things we're thinking about doing there, I think it's a marriage m…

AI assessment note: “I think it fits in beautifully because if you think about who I am”

Q What was the impetus for launching a fund instead of continuing to do it on your personal balance sheet?

A We're doing both. So ARC still has this portfolio of about 40 companies. We're taking about six or seven public this year and 21, probably the same next year. So the market, especially early on, was, was really hot on taking companies Public either through an IPO or SPAC. When we looked, Mark and I looked at the market, we saw a soft spot in the zone where a lot of people were not doing what we're doing with BCP, which is the following, is we're looking to incubate companies or take companies that are right at the seed level, definitely pre-A, and a lot of these young entrepreneurs, they're going around Trying to raise a million or a 1,000,005. And Mark and I, if we have the VCP and we feel there's a vision and these young founders or founder is capable of doing something really special, we'll say, forget the one and a half. Here's 10. We'll take 40 or 50% of the company today. We'll help you with your vision, make it more clear. Obviously, we're giving you the capital and we'll help you capital in the future. And then we'll go out and bring the right people around To help us reach our goal. So it was done beautifully with Archer. Archer, Mark and I came in sub a hundred million dollars. Mark was a big, big investor there. I came in a little bit later and we took Archer from a hundred million dollars and it went public at 3.6 billion. And all this happened in less than two year…

AI assessment note: “we saw a soft spot in the zone where a lot of people were not”

Q I'm curious how you think about the player perspective. I mean, that's your career as an athlete and some of the things that you found productive for success. How can you bring that into a franchise like the Timberwolves?

A A lot of it is the players are the stars and really making them feel that way. Treating not only them, but their families and their parents and those loved ones around them is really about educating them and setting them up to win. One of the things that Mark and I Thinking about is creating an NBA program for our players. That's almost mandatory, and obviously we have to talk with the union, and players today is not good enough. I grew up, I wanted to be Like Kyle Ripken and Dale Murphy and Keith Hernandez. Today, kids want to be like Mark Laurie and Mark Cuban, just as much as they want to be like LeBron James. Now, LeBron James is both because he's a great businessman and a goat on the basketball court, but the truth is, is not good enough for these young guys or women to be thinking, I'm just going to be an athlete. They want more, and I think if you can provide more and treat them where they feel like they are really the star and their families, I think we have an advantage to bring value to them, not only when they're playing, Post their careers.

AI assessment note: “educating them and setting them up to win. One of the things that Mark and I”

Q I want to ask you a couple of my closing questions. Before we do that, I know you were recently honored by the Boys and Girls Club, and you spent a lot of time taking all that mentoring that you were given early on and passing it forward to others. How do you think about that, and how are you involved in sharing the lessons you've learned along the way?

A To me, the Boys and Girls Club has been a lifesaver. You know, I mentioned my father left us, and I was left with my, with a great cast, so a threesome of my mother, my sister Susie, and my brother Joe. I looked at mom was like the president of the house. My brother Joe was the secretary of sports. My sister Susie was secretary of education, and they all played their roles beautifully. And I've always had to kind of put things in my mind where I can visualize it and touch it. So the Boys and Girls Club for me was definitely a lifesaver because that's where I went every day after school. It kept me away from trouble in the streets and gave me a place where I could do my homework and learn how to play baseball formally. I continue to be very involved with the club because again, it is a lifesaver for so many. And then my other part is the University of Miami putting 40 kids through the University of Miami. And my goal is to put 400 or 4000 kids of kids like me that are brown skin, come from single families and modest backgrounds.

AI assessment note: “I continue to be very involved with the club because again, it is a lifesaver”

Q The first thing I want to ask you though, is about how you go about picking your partners. Because before we get into venture and the SPAC and the Timberwolves, You had a real estate partnership with Starwood and Barry Sternlicht, one of the best in the business. How have you gone about figuring out who you want to partner with in all of these different areas of the business?

A Yeah. There's a few things, you know, it's like, you know, algorithm and Google, like you see things that just pop up or in your Instagram, there's a certain kind of feel you get. I remember as a young kid, they would throw curve balls right at my face. And every time I would flinch and it would be a strike every time. And then they would throw another one and I would flinch less. And I was old too. And I'm like, fuck. Swung at that one. But I was 18. Didn't have curveballs like that at Westminster Christian. And then they threw me the sucker pitch. The one that looked right down the middle. Now this one I didn't flinch. Worse, I swung at it. But that one was in the dirt. And what I realized was I needed to fix this. So I bought a breaking ball machine and it would throw me curveballs at my face every day. And I saw about 200 of them every day. And what I realized was it was a training of the eye that once I saw a curveball in my face, think about it. An object is coming at 80, 90 miles an hour at your face. You have to budge, or you gotta be nuts. But when the eye sees it every day in a batting practice, you all of a sudden start getting comfortable with that ball coming at your jaw, and that's the curveball that's gonna dive into a strike, and that's the home run ball. And then you realize that the one that looks like a strike is gonna be a ball. I think the same thing is tru…

AI assessment note: “I'm looking for missionaries, not mercenaries. And then I'm looking for people”

Q You mentioned earlier about the blessing and a curse of being a celebrity. And I'm curious as you reflect on that for A-Rod Corp and your investing, what are the benefits and what are the drawbacks of being so well-known?

A Well, I think the drawbacks, I'll start with that, is I think they're going to compare you to athletes and entertainers over the last 50 years. And it's so easy to read an article, so easy to say, well, You're an athlete. There's no way you can be sophisticated in business, and so on and so forth, but I gotta tell you, I have athletes that are my partners, and there's no better partners that I want to be in a foxhole with. They're smart. They're gritty. They're patient. They have perseverance. They don't quit easy. If you're down, they don't give up on the score. If they're down, they don't whine and complain. I'm here to tell you, athletes are incredibly smart people, and I love standing up for them because I was one and I know what kind of heart and what kind of loyalty they have. And I feel the same way about entertainers. Now you have to pick one that matches you. Someone that has your moral compass. Someone has your vision, long-term vision. And I always tell people invest less, not more, but with that money, just make sure that you have the ability to stay in for the long haul.

AI assessment note: “Well, I think the drawbacks, I'll start with that, is I think they're going to compare”

Q As you look at these opportunities today, it seems the public markets cooled on SPACs. There are Lots of potential businesses, cash flow generated businesses, late stage private businesses looking to go public. How have you thought about who you want to partner with and bring public through the SPAC?

A We've seen a great deal of opportunities. One of the reasons why we like the SPAC market so much for us in particular is because we're a deal flow machine. We see so many companies. We see, just to say number, 500 companies per year. More than half of those are coming to us. We're the hunting, not the hunter. So the barrier for entry for us has been institutional capital, and now we have both. So when you marry those, I think it creates a great opportunity for us. How we're seeing deals is through our network. A lot of times you got to go out and create your own opportunities. We're looking at companies, for example, that would not look at a SPAC business that will look at more of an IPO or an extra round in the private markets. But because of us, there's a consideration and we're in some interesting conversations there. But a lot of it is, you know, you have to hustle. You have to go out and tell your story. A lot of entrepreneurs tend to me to make the mistake that Of they think because there was one article in the paper that everybody knows their story, but the truth is nobody knows anything about anything, right? They're reading headlines and they're moving headlines. They're sending articles. They haven't even read the articles. I mean, so many people send me an article. I read it. I'm like, oh, I liked it. Did you like this part? Oh, I haven't read it yet. Why'd you send …

AI assessment note: “We're looking at companies, for example, that would not look at a SPAC business”