Fellowship Spotlight: 125 Ventures
Lorine Pendleton, Founder and Managing Partner of 125 Ventures, grew up regularly going to professional sporting events. Athletics-focused outings with her neighbor and Godfather, Al Harmon – the first Black sports reporter at The New York Times – were a staple of her early years in Harlem, New York City. “Yankee Stadium was right across from us. It was in the Bronx, but we could see it from Al’s apartment. He took me to Yankees games and I got to sit in the press box.”
She fondly recalls her experience immersed in a diverse crowd, all coming together to cheer on the same team. “I didn’t even know what VC was when I was younger, but I saw the power of sports and how it can move people,” she says of her early-seeded inspiration.
Now Is the Moment: Tapping Into Unprecedented Growth in Women’s Sports
On a recent trip to a WNBA game – the Chicago Sky versus the New York Liberty – Pendleton was struck by a noticeable shift in representation. “It was incredible to see little boys there with their fathers, wearing Angel Reese and Breanna Stewart jerseys. These little boys are going to grow up seeing that watching women play is normal, and then they’re going to take their kids to see the same. We’re at the very precipice of this movement of women’s sports,” she says with clarity.
“When you want to get an asset, you buy low and it will increase in value. So if only 1% is currently going to women’s sports, then it has a huge trajectory, but there’s a sense of urgency because we’re at a watershed moment. If you fast forward two or three years, this opportunity is not going to exist. Now is the moment.” This timely opportunity is part of what motivated Pendleton to center women’s sports as one focus of 125 Ventures’ first fund.
The broader focus of 125 Ventures Fund I is investing at the intersections of technology and sports, media, and entertainment. “We’re investing in tech-enabled companies that are in one of these three verticals,” says Pendleton. The fund is looking at particular sub-sectors within these broad industries. In addition to women’s sports, the fund will invest in AI and data analytics; college athletics and name, image, and likeness; content creator economy and communities; and live immersive events and entertainment. The majority of investments from the $25M fund will be made at the seed stage, with about 20% of investments going into Series A companies.
Making a Way from Media & Entertainment Law to Fund Management
Pendleton has a background in media and entertainment law and previously represented artists including Prince, Chaka Khan, and Stevie Wonder, among others. “I cut my teeth in my early career in media and entertainment and as a lawyer,” she says of her career before she transitioned into investing.
During her time as an angel investor for underrepresented founders, Pendleton learned just how little venture capital was going to Black-led and women-led companies and immediately knew she wanted to do something to change that trend. Soon after, she launched two funds with Portfolia. “I launched my first two funds, Rising America Fund I and Rising America Fund II, in 2019 and 2022 respectively,” she shares. Both funds focused very specifically on underrepresented founders, investing in diverse-led, women-led, and LGBTQ-led companies. “The first was a $6M fund and the second was a $7M fund,” Pendleton shares, “and out of the 15 Portfolia funds, Fund I is the best performing with a gross IRR of 32%.”
Having made great strides with her first two funds, Pendleton took a step back to consider her next moves. “It was time for me to move on and do my own fund,” she reflects. She also identifies as a student of markets, carefully and intentionally studying trends and making informed, forward-thinking decisions based on what she learns. “So when I took a step back to consider what was happening in the marketplace and what might be the biggest opportunity,” she adds, “I took stock of the fact that the pervasiveness of tech and the advent of AI are going to change the nature of media, entertainment, and sports. When I put on that hat, I said, ‘Wow, there are some really interesting opportunities.’”
And while this fund isn’t explicitly seeking out underrepresented founders, Pendleton’s connections skew in that direction. “I’m looking for companies in these particular verticals, but because of my network and who I am,” she says, “even though I don’t have an explicit focus around the types of founders, my pipeline skews toward women and people of color.”
The Expanding World of AI & Data Analytics
Pendleton’s hunch that there’s lots of growing opportunity in the space of AI and data analytics has also been validated by other experts and observable shifts in the space. “I heard a leading expert in AI say at a conference,” Pendleton shares, “that by the end of this decade, most content will be AI-generated. That’s pretty crazy to me as a lawyer who represented artists creating content and figuring out IP.”
And yet, this crazy reality is already upon us. “The cat’s already out of the bag,” she acknowledges. “While we can and should put some guardrails around it, I don’t think we’re going to be able to put it back; but there will be opportunities for innovators to think about things like protecting rights or authenticating IP. The question is,” she poses, “how can we protect artists’ rights in the midst of things like deepfakes and other AI-related threats?” She’s looking to invest in companies that will effectively tackle these evolving complexities.
Pendleton elevates that AI and data analytics are already being leveraged for things like outcome predictions, performance recovery, and injury prevention. As an investor in the Oura Ring, Pendleton is acutely aware of the potential in this space. She offers the example of many women’s sports teams already using technology that tracks menstrual cycles, relevant largely because women have demonstrated more susceptibility to ACL tears at the beginning of their cycles. Technologies that can support coaches to be more conscious of this susceptibility can protect athletes from season-ending injuries and protect teams from the implications of losing players to such injuries.
Promising Growth Indicators, High Potential for Returns
The name, image, and likeness vertical is seeing just as much potential for growth and returns, particularly in the context of college athletics. Recent legislation has shifted rights to allow college athletes to control their own name, image, and likeness – meaning they can now make revenue off of endorsement deals – and to mandate that colleges and universities share revenues with athletes themselves. Pendleton highlights how impactful this shift is, considering the very low number of college athletes that go professional and how many more athletes can now make money off of their careers in spite of not going the professional route.
Sports overall is a half-a-trillion-dollar market globally, with $80B of that in the U.S. alone. The compound annual growth rate for sports overall by 2030 is 6%, whereas Pendleton’s independent research as well as reports from Deloitte and others show that women’s sports will grow by an astounding 300% by 2030. Pendleton draws attention to some clear indicators of this growth, sharing that, “Merchandise is currently way up and ticket sales are through the roof, with WNBA games selling at about 95% capacity.” She also makes a comparative data point to clarify the scale of the growth, adding that, “The WNBA recently signed a $2.2B media rights deal, and media rights alone will now generate $200M per year, while last year’s total revenue — from ticket sales, merch, food, everything — was $200M.”
Live Entertainment, Immersive Experiences & Content Creator Communities
When considering live entertainment and immersive experiences, Pendleton underscores that – even with the advent of AI and all that digital technology can replicate – people continue to value the experience of seeing real artists perform. “What’s happening, though,” she acknowledges, “is you have something like The Sphere, which surrounds you and creates an immersive experience. More of this type of thing is going to be happening at games and concerts, so there will also be companies innovating around that.”
And the same is undoubtedly true when it comes to 125 Ventures’ final focus area, content creator communities. As Pendleton points out, “We have social media influencers now getting more famous than some traditional celebrities. They create a fan base and monetize their following. Some of them are making upwards of $100M.”
She lifts up RE-INC, the company that U.S. soccer stars, Christen Press and Tobin Heath, launched after winning the World Cup in 2019. “They launched it first as an apparel company,” Pendleton explains, “but where I see the really big opportunity for growth is the fan community they created. You pay $90 a year to be amongst thousands of other people who are big women’s soccer fans, like a Facebook or a Twitter but instead a closed community around women’s soccer.” This community is just one piece of what Press and Heath are activating, alongside their merchandise business and media company — which is home to the number one soccer podcast in the U.S.
Leveraging a Powerful Network & a Penchant for Predictions
Given her background in media entertainment law, having successfully launched two previous funds, and working at two startups that had exits, Pendleton has both a track record and network that bolster her ability to close deals in the VC space. In addition to her investment in Oura Ring, she’s also an investor in the Rhode Island Football Club (the only professional sports team in the state of Rhode Island, the home of her alma mater, Brown University), and in Tidewater Stadium, a 7,000-seat, state-of-the-art stadium just outside of Providence.
When working at Black Planet, Pendleton was out in front of making the case for appealing to Black audiences in the digital space. She was also an early public equity investor in Netflix, before the company became a huge success, and more recently invested early in Mexican American immigrant-led Canela Media, now the number two streaming service in the Latino market, behind only Univision. “I do have an amazing network of some of the wealthiest, most connected people in the world, and I understand what it takes to be a founder, so I’m empathetic,” she acknowledges. “I’m also a big reader and researcher, so I’ve been able to identify some interesting companies and some interesting trends.”
Pendleton’s hunger for knowledge was seeded in her by her parents. Growing up without access to material wealth didn’t stop her father from pursuing an education. He earned his engineering degree from City College of New York while working nights at the Brooklyn Navy Yard before going on to earn his masters degree in computer engineering from NYU. He later had a successful corporate career, eventually buying real estate and starting his own company as well. “He instilled in my siblings and me the value of education and the idea that material things didn’t matter,” Pendleton shares. “Money could come and go, but if you access education, you can make money; you can reinvent yourself.”
The desire to pay this lesson forward continues to motivate Pendleton’s work. “What I’m doing is bigger than me,” she shares. “I want people of color and young women and little girls to see themselves as investors and do something about it.”
Participating in the VC Include Fellowship
“I just think VC Include gets it,” Pendleton says of her general impression of VCI through her participation in the Fellowship for Impact Fund I Managers. “It’s a cohort of women and people of color, all people who are underrepresented working on their Fund 1. VC Include understands the unique challenges that we have and they don’t shy away from being direct about what we’re facing.”
She lifts up the programming overall; the quality of guest speakers; and the power of a network of peers as instrumental to her journey. “This is the hardest thing I’ve ever done,” she says. “While I raised money for two other funds, this is really upping the ante, so it’s good to have peers to connect with about what it takes to raise a fund on your own, because unless you’ve gone through this, you can’t understand. And VC Include provides that platform.”
We’re honored to be able to provide a platform that supports fund managers like Lorine as they navigate the challenges and the successes of their journeys.
