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Transcript: Paul Rabil – Entrepreneurship and Lacrosse (EP.95) Published Date: April 15, 2019 Length: 58 min Web page: capitalallocatorspodcast.com/rabil Paul Rabil is the co-founder and CEO of the Premier Lacrosse League or PLL, a new tour-based league of the top professional lacrosse players in the world that will debut on June 1st. Paul was the #1 player in the draft for Major League Lacrosse in 2008 after winning a national championship at Johns Hopkins. He is a 7-time Champion and 3-time MVP. Alongside his on-the-field accomplishments, Paul is a passionate entrepreneur who was the first lacrosse player to earn $1 million in endorsements.

Our conversation covers Paul’s early interest in lacrosse, developing a social media fan following, the importance of sponsorship revenue for athletes, and the leverage athletes have over teams. We then turn to the formation of the PLL, including Paul’s attempt to purchase the MLL with a search fund, his shift in business model from private equity to venture capital, the tour-based model, operations, distribution, and the on-field product. We close by discussing Suiting Up, Paul’s podcast where he interviews top professional athletes and coaches, and the Paul Rabil Foundation, which brings lacrosse to schools for children with learning differences.

Edited by: Rev.com

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Ted: 00:05 Hello. I'm Ted Seides and this is Capital Allocators. This show is an open exploration of the people in process behind capital allocation. Through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can keep up to date by visiting capitalallocatorspodcast.com. If you heard my conversations with Michael Schwimmer or Ben Writer, you probably know I'm a big sports fan and I love talking about the intersection of sports and investing.

Ted: 00:42 Ben introduced me to today's guest and I left it the chance to hear his story. My guest on today's show is Paul Rabil, the co-founder and CEO of the Premier Lacrosse League or PLL, a new tour-based league of the top professional lacrosse players in the world that will debut on June 1st. Paul was the number one player in the draft for Major League Lacrosse in 2008 after winning a national championship at Johns Hopkins.

Ted: 01:10 He's a seven time champion, three time MVP and if you ask my son, Eric, the best player in the world. Alongside his on-the-field accomplishments, Paul is a passionate entrepreneur who is the first lacrosse player to earn a million dollars a year in endorsements. Our conversation covers Paul's early interest in lacrosse, developing a social media following, the importance of sponsorship revenue for athletes and the leverage athletes have over teams.

Ted: 01:40 We then turn to the formation of the PLL including Paul's attempt to purchase the MLL with a search fund, his shift in business model from private equity to venture capital, the tour-based model operations, distribution, and the on-field product. We close by discussing Suiting Up, Paul's podcast where he interviews top professional athletes and coaches, and the Paul Rabil Foundation which brings lacrosse to schools for children with learning differences.

Ted: 02:09 Paul is a savvy off the field as he is skilled on it. As the PLL takes off as I suspect it will, this conversation may well mark an important moment in time for this fascinating startup league. Turn into NBC to watch the first games from Gillette Stadium in the Foxborough Massachusetts on the first weekend in June. Today's show is sponsored by Canoe Intelligence. Canoe Software allows you to read, process, and extract data from e-mails and PDFs you get from your managers and send them

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directly to your portfolio reporting system with no errors and in next to no time.

Ted: 02:46 Visit canoeintelligence.com to learn more and mentioned I sent you for a special offer. Please enjoy my conversation with Paul Rabil. Paul, thanks so much for joining me.

Paul: 02:59 I'm really pleased to be here. Thanks for having me.

Ted: 03:02 This is going to be a lot of fun and you probably know I'm a bit of a sports buff, so why don't we just start with your background and really your path to lacrosse?

Paul: 03:09 Yeah. I grew up playing sports as a young kid. My dad tells me to this day that he would get my older brother, Mike and my younger sister and I into whatever sport we had interest in playing so long as there was a path to get us in there. We played majority of our ball in rec lacrosse. I played soccer, basketball. My brother played baseball. I swam, I ran, track cross country. There was a point as I was improving as a young athlete, I was 12 and I stutter saying that because there's so much pressure on sports specialization for young kids today.

Paul: 03:47 I was growing fast and I was talented in basketball and soccer, and both of my coaches wanted me to play in basketball, AEU, in soccer, club soccer. I wanted to keep playing both, so I told them no. Then my neighbor at the time was playing lacrosse and he came to me with his backup equipment and said, "Hey. Why don't you put this on and fill that open void you have in the spring?" I didn't know what the hell lacrosse was. Despite being formed Maryland, a lot of people think Maryland and New York are the two hot beds.

Paul: 04:12 It's actually Baltimore and Long Island. I was about an hour and a half from Baltimore. At the time in the early '90s, there wasn't much Lacrosse. I struggled for the first couple of years and then overtime, really felt like I was excelling playing that game more than I was in basketball and soccer. When I got into high school, I began really focusing on the prospect of skill acquisition so I could play in college.

Ted: 04:39 What did that looked like when you were in high school?

Paul: 04:41 A lot of time, against the wall, a lot of time creatively trying to improve. This was early 2000s, pre YouTube. We're on the turn

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of the internet age. We were getting a lot of our inspiration as young athletes through imagination. On occasion, actually once a year, there would be lacrosse on television and that was at the final four and it'd be on ESPN2. I would have those VHS tapes and re-watch those games to understand where and how the game was played at the highest level.

Paul: 05:13 I would try to replicate it in my backyard. I think now, there's more times allocated to scrimmages and practices. There's seemingly a year around lacrosse. I was watching a piece from Wayne Gretsky who references this with his dad too that his time out in the backyard on the ice by himself where he was just working on his skill and doing so creatively was the most valuable and probably seminal time in his career. He worries that fewer kids are doing that.

Ted: 05:45 You go through college and you start playing pro lacrosse?

Paul: 05:50 Yeah. First of all, I didn't really even think about pro lacrosse too much when I was in college. At the time like even when I was 14 and then through high school, I viewed the gold standard in lacrosse as playing at the national championship game in college. All of my focus and attention even through my senior year was, "Let's win a championship and how do we get there?" It's different in college basketball and in college football and even baseball and hockey, and big four sports.

Paul: 06:18 It's okay that a kid is like Zion William,s and we're just talking about, is competing for an ACC championship and an NCA championship is freshman year but he also knows he's going get the MBA, like that's okay, right? It's being realistic and practical. That was completely non-existent for me. Then when I did finish my senior year, we lost the national championship game at Syracuse. I was bummed and the MLL draft took place. I was drafted first.

Paul: 06:44 ` There's a big scheduling overlap at the time which is something that we've solved for and we'll talk about that with the PLL. The MLL season had started in April. There're already six games in. You feel distant from the team and the league coming into a season where they're almost halfway through. Ted, I had a job in real estate as an analyst for an investment sales team. That's what's my predecessors had done that played

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in both pro lacrosse but had started their careers in Wall Street or real estate or legal entertainment, et cetera.

Paul: 07:16 I did all my internships leading into that graduation year. Then I took a job in DC. My bosses knew who I was and they were okay with taking off Thursday nights after work and flying up to Boston to practice on Friday and playing in the game that weekend and coming back on Monday nicked up. That got old pretty quickly combined with that being 2008, so the pit of the economy. Especially I was in investment sales, so we're trading buildings and no buildings were being traded so I was just thumbing around on Argus trying to figure out how to model and read through leases and then got to a place so at the time where Facebook had just launched its fan pages.

Paul: 07:55 I was on Facebook and I adapted it in college when it was a college exclusive program. Then after that championship game, my junior year and then certainly after the championship game, my senior year, I was always accepting in-bound friend request because they had lowered the age barrier to get in down to 13 plus. By the time my senior year came around, I had 10,000 plus friend request because I was capped out at 5,000 friends.

Paul: 08:20 That's actually the empathies of why Facebook created athlete pages because some arbitrary person behind the scene said, "No one should have more than 5,000 friends. It's unrealistic anyway so let's have a cap but for athletes that may have millions of fans, let's allow them to start a business page or fan page." I started an athlete page. They converted all those fans out, out of the gates, I had 15,000 plus fans that I was communicating with.

Paul: 08:45 I was like wow this is really interesting because this is now direct communication from a pro athlete to a fan base that didn't exist when I was 12, looking for that and searching for that imagination or skill acquisition that we talked about. Something clichéd for me shortly thereafter Instagram launched, Twitter launched, Snapchat and accelerate. I was always an early adapter. What that did is got the interest of some sponsors that came to me because they were like, "This person is marketing himself and part of this new sport."

Paul: 09:16 Nine months into my real estate career, I got an endorsement with Under Armor. I was the number one pick, I was playing

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well, got an endorsement with a lacrosse company called Maverick. That was enough runway for me to decide to leave real estate and then supplementally start a Camps & Clinic business to offset a low wage which at the time for rookies was $6,000 for the whole season.

Ted: 09:39 Yeah. I have to think that there are very few players at the time that would have been able to make lacrosse their fulltime work.

Paul: 09:48 Yeah.

Ted: 09:49 There were a few. Carl Harrison who was the senior captain, my freshman year at Johns Hopkins, he was doing so through his hybrid sponsorship employment agreement with STX. They brought him on and he was the face of STX. He was creating hard goods and soft goods with them. He also had health insurance through the business and he was helping on the creative side. He was a big value add for that company but he was also given a ton of autonomy to train as if he was a full-time pro athlete because they needed him to continue to play at the highest level.

Ted: 10:21 That was one example. Then the gates had done it previously but they were playing both indoor and outdoor. There was a lot of stuff that they help pioneer. The [Powells 00:10:30] as well. They had taken an attempt at it but sponsorship revenue is critical for a non-big-four-sports. Then even if you look at the big four sports athletes, if you're LeBron James, his sponsorship revenue far exceeds his on-court on an annual basis.

Ted: 10:47 A part of that is luck, a part of it is timing and then part of it is ingenuity by the athlete foresight and willing to do a lot of work to try and benefit these brands and be a good partner.

Ted: 10:56 Yeah. Is your now playing in MLL and running these camps, what was the evolution of that, kernel of a business into where it went until now and we'll talk about now?

Paul: 11:07 Aside from my focus in lacrosse which was playing in both MLL and NLL, so now all of a sudden I had a $17,000 wage playing NLL. I had that $6,000 wage playing MLL. I had sponsorship and coming from Under Armor in Maverick and I started a Camps & Clinic business. That was how I viewed lacrosse. Then next to that, I had an older brother who was also an entrepreneur. We started building companies together. We were building gyms at

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the time because he played football at Dartmouth. I played lacrosse at Hopkins, felt like we knew a little bit about fitness.

Paul: 11:43 Then our third business partner at the time was an analyst at Summit Partners. They had just acquired the majority stake of Snap Fitness. We had an inside route to a franchise business that was pretty lean from an operational standpoint, from cost structure standpoint. They can operate on its own and we felt like, "Hey. This could be something that is in our wheelhouse from an intellectual competency standpoint."

Paul: 12:06 We had inside knowledge around how these businesses are successful through the angle of summit and the acquisition. Let's try to scale these at low touch points. I was flinging gym memberships in Joppa Maryland. I was living in Baltimore. I would train in the morning with my strength and conditioning coach, [Jade Aiur 00:12:24]. I would drive up to Joppa, sell memberships from 10am to 8pm. I would take breaks to post on social media and then I would come back, reset.

Paul: 12:34 Then on weekends, I would teach Camps & Clinics. I was getting a ton of exposure in business through my brother. We were building multiple properties. What happened from that as I'll speed up is we self-funded the build out of this gym [cos 00:12:49]. They were essentially like 60K to 120K. You could build them out pretty quickly because they're small and they were targeted in neighborhoods that didn't have a competitor in a two and a half mile radius.

Paul: 13:02 What they were is they're 24 access key card gyms. This is before like Planet Fitness surged and before their 24 hour fitness and all that stuff. They were neighborhood gyms and that your customer had a key card, and they could scan in. There didn't need to be an attendee there. You have this 24 hour security system that kick back to HQ. That's why it was really lean and we could operate these things.

Paul: 13:20 If you get them up to 250 to 500 members, they spit out cash and it was a cool idea. That was how that was functioning and we were learning but because we had to self-fund it, we preferred not to. We wanted to get some debt out from a bank so we could have a better IRR. That turned into the thought of, "Hey, there's a lot of folks that can guarantee leases out here. They're may be too young to have a strong enough FICO. All the

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other reasons of being in 2008 to 2010, we're not getting any debt from a bank. Let's start a small business, lending company."

Paul: 13:53 I was a passive investor in there. That was more of my brother, Mike. They're business partners but we started Endurance Lending Network, so he shifted his time full time there. That got acquired by Funding Circle when we were out for our Series A, that turned into Funding Circle US who moved out to San Francisco. Our paths were on both coast and that's how I was building. That's a little bit more of the background of how I got here.

Paul: 14:17 I was always getting a lot of learning experience in business and building and operating. Then I was taking a lot of that insight into how I was forming the structure around my Camps & Clinics and managing people that I was paying under my payroll. Then the last piece that I would say that really help me understand more sports business and media is I would take out my calendar every year and mark down the major sports conferences.

Paul: 14:42 I would pull on the relationships that I had in the industry to say, "Hey. Can I get into these events?" In some cases, I couldn't. I'd book a flight and pay for a ticket to get there, this is South by Southwest Sports, this is World Congress of Sports, this is Sloan Sports Analytics, this is GSP Sports Innovation and I would sit and I would listen to executives talk and I would take notes. I always viewed myself as an athlete that had the opportunity to monetize, to grow, and to build and potentially do something great in the sport that was really primed to be commercialized.

Ted: 15:17 Was there a moment or a day when a light bulb went off and you said, "Okay, I've been preparing. I'm not sure for what but now …" the idea that became the PLL?

Paul: 15:28 No. There wasn't a day. There were a lot of conversations. I was experiencing equally some small success and some small failures. Because of the accelerated platform I had which was an audience that was now tipping 700,000 followers and aggregate, if I launch an OTT instructional platform which I did call the Paul Rabil Experience, I could onboard customers much easier than Joe Smith launching a lacrosse instructional OTT even if Joe Smith's OTT had a better UI, UX, I had greater reach.

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Paul: 16:05 That's why athletes are now really valuable for early stage startups as small investors that can … If you're the entrepreneur and you carve it out well, you get access to their audience. It's like immediate customer acquisition.

Ted: 16:16 Yeah. Did you find of the social media platforms, was there a bigger impact on one or the other, or did you just canvassed all of it?

Paul: 16:22 Going back to it, I canvassed all of it but those were different times. These platforms are evolving their algorithms daily. I would actually say if I were building now and I was a young 20 year old, I would think about you spray and then you figure out which platform is best for your skill, the audience reciprocity and so on, and that you just go long there. There is overlap but there's not full overlap, so there is value on being on multiple platforms but understanding that value.

Paul: 16:53 If you're an athlete right now, I think the biggest platform to be on would be Instagram. If you're a chief investment officer like yourself or an entrepreneur or an analyst or journalist, Tweeter, right? That's where conversation lives live and it's viral and have smaller user base but really compelling content that goes on there. Then if you have the resources and the creative know how and the ability to go shoot and edit, YouTube can be an incredibly valuable platform and has been for a lot of millennials and gen-Zs who have evolved into these influencers of big huge audiences.

Paul: 17:31 Those are how you would … I would think about it now if I wasn't building the PLL right now and just long on media still, I would probably tighten more around whether I'm going to go for example video exclusively on Instagram or YouTube, I'm on both right now. I love Twitter, so I'll always be there but with Instagram, rolling out their IG TV and IG Stories, it's no secret, everyone's competing against each other. That's what I would say there.

Ted: 17:59 Okay. Let's circle back to the founding of PLL.

Paul: 18:01 Yeah. We were having a lot of conversations around, "Hey, amidst all the growth I've had as a personality on sport," and that's captured by total followers and so on, endorsement revenue was going up for me, Camps & Clinics were selling out.

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There were other players that were just as big, if not, bigger than me coming through the college system. They weren't doing what I was doing and as a result, weren't catching the fire that I caught.

Paul: 18:30 I started spending a lot of time with younger guys and saying like, "Hey, here's how I think about it." A lot of them were just reaching out too. There was this really hot lamp that was on around players at the time. That was because of this new media, new technology. Then next to that was the emergence of non-big-four-sports because of new stringing platforms, the evolution of media, OTT, On Demand, instant replay you can even call it but that was there when I was growing up.

Paul: 19:01 This is no longer like traditional media back in the first Major League Baseball days or the Sprint Radio locally in your ball park. You have the emergence of the UFC, you have the emergence of Crossfit, Drone Race League, you have PDR, Street League Skate, X Games. All these properties now have been hitting on the right messages, the right technology and the right media, and they're growing. This is all post 2008.

Paul: 19:31 We just kept thinking like, "Why not lacrosse?" What are we doing wrong here? I was working really hard as were our number of guys with our teams to try to address that but as a player, you're just … You're limited. It was about two years ago, Mike and I got together. Mike at the time is backwards, he's running revenue at Funding Circle. Then he had a lot of executives in Silicon Valley, had a really strong, about seven-year run and said, "Okay. I'm now re-energized again to go back and build from scratch."

Paul: 20:01 He was going to begin a search fund and he had some overhead capital to support him and go do an LBO of five to 10 million dollar business. Mike was like, "Hey. What are you doing, Paul? Your timer is 31 and you're picking up a lot of skills, so why don't you come out to Silicon Valley with me and let's go do a search fund?" I was like, "Let's talk about lacrosse." He said okay and we rolled our sleeves up for a few months.

Paul: 20:24 As part of that sleeve roll, we were meeting with them all out and we're trying to understand where they were because at the time, they had just announced the step down of their commissioner. Mike and I were going and saying like, "What's

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management look like? Is it something that you'd be interested in us, looking at or taking a swing at?" That didn't take place but the more we were digging in, the more we looked at those other league examples.

Paul: 20:48 Me as an athlete know the athletes, there's something here. About six months later, we went back to MLL with overhead capital that we have acquired at the time. It's primarily private equity. We proposed a number of different scenarios of essentially buying them or rolling them up and keeping them involved from an equity standpoint but essentially like here's why like any entrepreneur would. There's a level of confidence that you have to have but there's a lot of humility and say like, "Here's why we think we're a best fit to operate this thing. Here're some of our ideas. What do you think?"

Paul: 21:21 We spent a lot of time talking about it, couldn't come to a solution but through that time, we had just so much conviction around where we think pro lacrosse could be. I'm sure we'll get into this but our league is a tour-based model. The model is completely different than a traditional team sports league. Had we agreed to some form of MNA, we're going to roll up and roll out tour even with MLL had that taken place.

Ted: 21:45 Let's go right there. That cracks the difference between team based and a touring model.

Paul: 21:52 We had the benefit of starting a major team sports league from scratch in 2018, what would that look like? I mentioned Major League Baseball because you look at consumer trends, you look at that's across the board from the way that they consume sports but also their behavior in market externally and so on. Then you look at available resources. Major League Baseball was founded at the time of Linear Media being local newspaper, local radio.

Paul: 22:24 As television evolved into local and then national, an instant replay On Demand, OTT, that whole 50 to 70 years span saw sports consumption changed drastically. While people used to grow up in the same market where they've lived the rest of their lives and go to the local ball park and they have that geographical affinity because teams and leagues were far bigger than athletes, you fast forward to where athletes are now with social media, and there's plenty of data that's been aggregated

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across Google, Facebook and now the SFIA and so on that athletes following are forged sometimes eight to one the size of their teams and league.

Paul: 23:05 Because of that instantaneous access that a fan can have to watch Christian Ronaldo's live games overseas or if they're on the East Coast, favorite Lebron James in the Lakers or Steph Curry in the Golden State Warriors because they've watched all their games and then followed them and communicate with them on social that the connection has changed. Leveraged has changed. That's why I was talking about this yesterday.

Paul: 23:26 We're seeing free agency the way it is in basketball. Leverages change. The athletes have the leverage. The teams don't anymore. That's even circulating in the NFL which is the biggest anomaly and very few leagues. If any, should try to compare themselves to how the NFL sets trends. We were looking at that as a case study. Then we were looking at operational optimization. If you're a non-big-four-sport, traditionally you'd go out and you try to find owners and you franchise it.

Paul: 23:55 Often times, those owners don't own venues, most times. If you don't own a venue in a city based model, you have to then become a tenant on a lease. A lot of time, you're deprioritized. Then you have to every year try to create your schedule. Even the MLS has challenges with schedules and they own their venues. If you don't own a venue and you're saying, "Okay. We need eight home games from June through August, give us the options."

Paul: 24:20 They'd give you the options and then you go cross compare with all the other teams. You scrap everything and you're doing … What you end up with is very few optimal times to host games. Moreover, when you're a tenant on a lease, very few non-big-four-sports are playing in NFL venues or MLS venues because they're just really expensive. We look at that saying, "It just doesn't feel right." Individual sports seemed like they get it right with the tour-based model.

Paul: 24:46 Additionally, in a tour-based model like NASCAR, you have all the best racers in the world descending upon a major market city or a major venue. They're racing over the course of the weekend, so there's this fan festival component. You're bringing corporate partners, so like you're actually optimizing the spend

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on production because you're not sending production trucks all over the country to capture multiple races over the course of a weekend. There's only one group there capturing the race.

Paul: 25:12 There's that moment. We looked at too, if we were going tour-based and all of our teams come in the same market, we ran out of venue for the weekend, the most important thing that's second to having the best players in the world in any sports league is you have distribution. Sports are consumed through media. Less than five percent of sports fans actually go to games. You're consuming it through your mobile device, your tablet, your television, circle of conversation.

Paul: 25:38 If you don't have distribution, you might as well just chuck it up as a loss. If you … Going back to that lease structuring, if you then have limited times that are deprioritized then you'd go to your network and you say, "Here's when we're playing games." They don't have open programming windows which by the way often times get booked two years in advance. You ain't getting a network even if they're interested rather if you'd go on a tour-based model and say, "Hey. What are your open windows on Saturday and Sunday?"

Paul: 26:08 They go, "We have a four o'clock this time and eight o'clock on Sunday." We go down and done because we control that whole weekend. That tour-based model is sold for distribution out of the gates and distribution is table stakes in sports leagues. That was where we are. Then if you look at the last factor that I'll share with you is if you're a non-big-four-sports league, typically you look at all these leagues whether it's National Women Soccer League, the WMBA has gotten a big injection of growth from the MBA owners doing the right thing which is owning the WMBA teams.

Paul: 26:43 Jo Tsai and his group just purchased the New York Liberty. If you look at water polo or rugby or lacrosse, you're in fewer than typically 12 markets. You have 10 and less teams. For us, we said, "Okay. A sport that's growing east to west, it's the fastest growing team sport in North America at the youth level over the last 15 years." It's just got Olympic recognition at the international level so bookending international to youth, IOC gave its recognition to participate as an Olympic sport, there are two more steps but that recognition is really difficult to get. That came last November.

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Paul: 27:17 There're 60 countries that are nationally sanctioned playing lacrosse right now. It's the fastest growing team sport in the NCA level, both men's and women's. This is the oldest sport in North America. We were like, "This thing has product market fit," all right? If we're launching a league and in our case, we have six teams, if we tie each of the six teams to a city, we're actually very, very local and we're exclusive.

Paul: 27:43 By going tour-based and not attaching a city to the front of the Jersey, yes it's more challenging and it's more abstract based on how consumers are used to consuming team sports leagues but when we go to our 13 markets all over the country over 14 weekends and we'll go to one twice and that's in New York, we all of a sudden are a national sport. Fans all of over the country can choose their allegiance base going back to our point of favorite player, favorite player and coach combo, favorite team combo or even the culture that we bid around the teams. There's a lot obviously I think but I have been talking for 10 minutes.

Ted: 28:19 I want to walk through some of these because this is awesome. When you get started, so you're going to have to rent out big stadiums, you got to figure out that distribution, do you start with funding in a concept? Do you start by trying to get distribution locked up? How did you put those pieces of the puzzle together?

Paul: 28:38 We started with the seed round. Just like any founder or a co-founder group, you've got to put in a lot of work leading into any round of financing. Scott Galloway says you got to be willing to sign the front of a check, not the back. It gets even more dynamic than that because very few people in the US will work for free. Now imagine working for free 80 hours a week and then writing a check to the company that you're working for like it's fucking hard but you have to build your investment thesis.

Paul: 29:15 You have to create an OM. You've got to have the right conversations with the players and the networks up to that point, the stadium, you've got to have all of the case studies and the comps, and got to put forth the effort. We did that first and then we took the investment opportunity to some venture capital because the time to acquire MLL had gone, so you shift quickly from private equity to venture because this was certainly a venture investment.

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Paul: 29:43 We raised this small seed round and the goal of that was to allow us to anchor a network deal, secure venues, get first leads in on sponsors, sign up players, hire an executive team. Small in the scheme of sports, it was of a healthy seed round. We had about a six month period to go execute. Reflecting on this, Mike and I, you have to be confident and passionate about your concept but we had an opportunity at one point to just raise a ton of money in one round.

Paul: 30:17 That's tricky around evaluation and this is a pre revenue bet and it's sports. Sports have major evaluations because of fan attention and viewership, sponsorship, future revenue. We decided to parse it out and thought it was healthy to do that with our investors. We did all of that ramp up in that six month and then had our Series A done because it's basically like can these two guys go out and do this?

Paul: 30:41 It was daunting. We were certain we were going to get a network deal because we have all of the answers from CBS, NBC, Fox, Turner, ABC, Google, Amazon, Facebook, and Twitter. Then it came down to because of our tour-based model, there was that interest in what we were building and then the excitement around Lacrosse. Then the other macro trend is that the NFL, NBA, Major League Baseball, and NHL [inaudible 00:31:05] through up in 2021, 2022.

Paul: 31:07 Brands are trying to position themselves. You saw the WWE deal get jacked up because these niche audiences are continuing to grow and they're very sticky. UFC rights went up. Lacrosse can be a big one if done right. There was interest. It goes to timing. We're here to secure an NBC deal. They were the best partners that offered the best deal at the time. That was John Miller who's president of programming.

Paul: 31:30 Pete Bevacqua is president of NBC Sports Group. Mr. Lazarus was in the room now who's running NBC. We're talking out of major partner level and we're really excited about it because we have 19 games on television, three of them on NBC, main network, 16 on NBC sports that jumped to ESPN2 last year in total viewership. This is on par with while we have fewer games in the NHL, this is a game play to broadcast schedule on par with some of the biggest sports leagues in the world.

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Paul: 32:03 Nineteen on television, 19 on nbcsports.com and NBC Gold, it makes it hell of a lot easier to launch a product when you have a network partner.

Ted: 32:12 You get the network partner [inaudible 00:32:15], you now have got the facilities to do, figure out where you're going to play the weekends.

Paul: 32:20 Yup. What we had was a pool of probably 30 cities that were interested that had availability. Certainly, one at a target premium venues that have fiber technology connectivity to make the broadcast not only easier and functional but we want to elevate the broadcast for this game that's not going to be a three to four camera broadcast. It's going to be a seven to 10. That's huge for lacrosse which is a big field and a small ball that moves really fast [inaudible 00:32:46] the track.

Paul: 32:48 We are doing it all simultaneously. We're doing and still are. It's like everything from VIP wrist bands on site, we have a group we're working with called Prize that does the Dew Tour and all the Red Bull signature series and stuff [for event 00:33:00] activation partners. Our main thing is player competition, distribution, corporate partners. That's all in-sourced our BD team and merchandise as well. Then we have a lot of outsource strategy but yeah, it's a major lift.

Ted: 33:15 I want to go through some of the subtleties in how you actually then formed the league and the team. At first, starts with how did you pick the players?

Paul: 33:22 What we looked at was … All right, with our players … This is why it was really attractive in having been there and we talked about the $6,000 wage in 2008 is it's just not enough. To be a sport that produces the top quality competition on the field, you need your players to be full time. We're about as full time as possible. I say the last part of it because our players are still … Because of habit, a lot of them have jobs or coaching.

Paul: 33:52 There's going to be probably a three year transition. We're not saying, "Hey. Leave your job on Wall Street tomorrow and come take this wage that we elevated from what MLL formally distributed." There is certainly a demand around attention during film and practice time, scheduling and all that stuff so we elevated the wages. We also saw for a challenge that I had

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experienced in some of my peers that were full-time lacrosse players and that we were sourcing our own healthcare.

Paul: 34:21 It's a challenging time no matter who you are in the US. We said, "Okay, through single entity league, we can open up healthcare to our players and so they can opt in." Then the last one which I think the most transcending is we viewed ourselves as an early stage Silicon Valley startup, venture back from folks like Jo Tsai and Jo Tsai sports, Reignventures, CAA, [Turning 00:34:44], Blum. We have an individual who's one of the most successful hedge fund operators in [Bret Jefferson 00:34:50].

Paul: 34:50 This is a group of investors and then advisers that expect and are working with us to build on that same trajectory. What you have in Silicon Valley is a treatment of your employees where they get stock options of the business. That's carved out in your employee cap table. We carved out a portion of that for our players. Our players have options in the business in going along with where we're seeing trends and sports as players become by far in a way the most valuable asset in a league is how do we all row in the same direction.

Paul: 35:21 They're building value for themselves. They're also generating enterprise value for the business and they're receiving a return on that as we continue to grow this thing. This is how we did it. To your question around picking players, with that environment, the last thing we wanted to do was make this exclusive. We had conversations with who we deem the top players at the time which was based off of tenure in pro lacrosse, USA team, Canada team, all-star, [Nods 00:35:51], MVP, so we built a list of about 50 guys that we had first level conversations with.

Paul: 35:57 Frankly the first ones that we had, we weren't sure if they were just going to say flat-out no because a lot of athletes have been like me. They grew up watching Michael Jordan and now Tom Brady. They see that city based model. This is asking someone to think creatively and try to align with our vision like 10 out of 10, everyone's like love this. Then from there, we've built our player relations team is led by Carl Harrison and then Tom Schwimers kicking in.

Paul: 36:23 When you have Carl Harrison who I had mentioned earlier and Tom Schwimers is reigning MVP like having conversation with

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players is pretty good. We created a structure around, "Okay. We have six teams, 22 active roster players per team, 28 total per team. There're six inactive roster players and then we're going to have a player pool." We came up with that number and the player pool is whoever wants to opt in and be accessible to coaches who are essentially driving the competition on field. That was based off of data too.

Paul: 36:57 Over the last five years in pro lacrosse, any given team typically dresses upwards of 33 players on then a 19 men roster. That accounts for trades, injuries, in-bound college players like me back in 2008 and then even in-bound NLL players which is the in-door leagues because they have that scheduling overlap. The latter two won't be as maybe as abundant as the last five years because we adjusted the schedule which is another benefit I didn't mention in the tour-based model.

Paul: 37:29 We could say, "Okay. Now, we want to start in June when college is done," but nevertheless, we came up with that pool of essentially 160 to 180 guys that will be playing at some point based on data.

Ted: 37:43 How do you form the teams? There's no draft. There's no individual owners like how do you put that together?

Paul: 37:51 Yeah. Myself and my brother Mike are cofounders of this business. I'm our chief strategy officer. Mike's our CEO. I work across essentially media and corporate partners. Then I cheap-in around in rules and innovations and product on field from time to time but it was critical for us that we bifurcated our org and built out a lacrosse unit that could focus on competitive integrity, management of coaches, operation of weekends, management of players, so our player relations teams tucks under our lacrosse org.

Paul: 38:24 We brought on [Josh Sims 00:38:26] who's our head of lacrosse. He's about 15 year professional in sports product management and technology. He was a three time first team All-American at Princeton, one of the best players that the game has had of the last few decades. He was constantly watching us and panging us around, "Hey. This is really interesting what you guys are doing. I've been distant from the game since I retired playing pro lacrosse although I entertain coming back."

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Paul: 38:50 We threw course of interviews and so on, brought him on as our head of lacrosse. He oversees all of what I had mentioned and he's also currently building out his team of operational managers and so on. He helped hire our head coaches which are all world class, kind of led by Dam Starsia who's arguably one of the best lacrosse coaches in the game's history. Then when we talked about forming our teams, it was a combination of getting feedback for our players who are option holders in the business.

Paul: 39:18 Then also, how we can attention hack or gather the right response from the market that could get a nascent stage league off the ground faster in a starting lane, three or four versus one or eight. The feedback from the players in hindsight was fairly obvious which was we don't want to draft. No players want drafts unless you're drafted first. You're not first.

Ted: 39:43 Yeah, right.

Paul: 39:43 That was cool to hear. We were originally saying … We talked about everything, Ted. We talked about a traditional draft. We talked about creating a draft that was based off of fantasy auction, UGC draft from fans and so on but what we kept coming back to was gold standard in the sport, going back to my experience, college lacrosse. Then we've looked at the player pool that we have now and how there's 23 guys that played for Maryland.

Paul: 40:11 There's over a dozen that played for Duke. There is this organic competitive alignment and chemistry that's already there. When you talk about best sports in the world, you look at teams that have that chemistry and that competitive fire that sometimes has been built over a decade between the coach creating culture there like a Greg Popovich or other times, three to four years with a player duo that continue to builds that chemistry in the locker room and on court.

Paul: 40:41 It was clear to us that we had an opportunity to not only have best products on field through that baked in chemistry but also aggregate a fan base that loves college sports and college lacrosse specifically. One of our levers that we looked at in building these teams was college alignment between our current player pool. The second was if you look at guys like myself and Carl Harrison and Joe Walters who've been playing

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pro over a decade is that even more impactfully in college, we've played with certain guys for 10 years versus four.

Paul: 41:15 We looked at former pro team chemistry. Then we pulled out the data around skill and age, and we did basically a weighted scorecard. Josh led that. Adjacent to Josh, we had built a lacrosse advisory board because we wanted to be as objective as possible. That consists of folks like Dave Pietramala and John Danowski. It's chaired by Seth Tierney, has Jen Levy on the board, has someone like Paul Carcaterra on the board on the announcement side and analyst side of lacrosse.

Paul: 41:45 Jen Levi's one of the top coaches in the women's game both with the team USA and North Carolina. We worked with them to say, "Okay. What do you think basically? Does this pass the sniff test?" They came back and gave feedback around certain players here and there, and that's how we formed our teams.

Ted: 42:03 What do you do overtime if there're just imbalances? Will there be trades? Do guys retire from the league? Have you thought about that as multi year period goes on?

Paul: 42:12 Yeah, definitely. In addition to forming these teams which by the way there're six of them and we have the best players in the world, the competitive parody is just absurd, right? If you look at … I would be willing to wager a lot that no one's going undefeated but yes, from the moment we formed teams which was two weeks ago from the time we're filming this is in there in the hands of the coaches.

Paul: 42:37 We haven't unveiled publicly how trades look. We announce that we're doing a college draft. We haven't unveiled the order of the draft yet but yes, just like any team sports league, we only have this moment once in our life cycle. From there on out, these teams will take their own shape based on how the coaches interact with the players and adjust through trades or college drafts or dealing with injury or retirement in subsequent years. They're going to be building to win.

Ted: 43:07 This team dynamic is interesting in a tour-based model. I'm imagining that the players live all over the place, how do you form and build the chemistry of a team? Some of it, you mentioned that it may already exist with some of the players when it's not like Bill Belichick's football team were starting on

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Monday morning they're getting ready to practice for the Sunday game.

Paul: 43:27 Yeah. That's exactly right. The first thing is that the cadence of practicing is pretty close to mirroring how pro lacrosse has existed and that there is a couple of practices, maybe three depending if you're a Sunday game, a week that these guys get. It's jammed inside of a 72-hour window. That's how these guys are used to it. Frankly like if you zoom out and you mention Bill Belichick who's a friend of mine and I've gotten to know him for the last decade and a half because he grew up playing lacrosse in the Maryland area like me, football, they don't actually practice during the week, during the season. They ain't suiting up. They'll go through skeleton offense and defense but it's a lot of film work.

Paul: 44:11 It's a lot of rehab, strength and conditioning, conversations and all that in-person experience is very valuable but understanding where we are at this stage and we'll get there in a future stage but add the technology and tools that are available, so there's a lot of software services that allow coaches to host video conferences with players every night during the week. They can send out scouting, reviews, they can send out tape to players.

Paul: 44:42 They can monitor viewership from players. That type of scouting and video prep and work like it's done remotely. That's easy. Then it's our job as league different than what pro lacrosse players have been afforded formally to make sure that our players have the right resources when they are in their home markets to train, to have access to PT. We do that through our medical partners, through our strength and conditioning partners and so on.

Ted: 45:06 Among the other media venues you've touched on, the one we didn't mention was your podcast, Suiting Up. Why don't you just talk a little bit about the last couple of years of that and what it is and what you learned from it?

Paul: 45:19 Sure. If your audience doesn't know by now, if they're still tuned in, they know that I talk a lot. This medium is great for someone like myself who likes to air it out with someone else. I grew up with learning differences. I had arbitrary processing challenges, I had ADHD. I was an early adaptor of a program that's called [Curse Well 00:45:40] that's still in schools now but it's

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essentially, you scan your reading material or now you can just upload it online.

Paul: 45:46 It can read it back to you and you can click and highlight. I'm a very visual and audible learner. I was always attracted to podcast. A few years ago, I found myself and is part personality type, just so obsessed with the medium and the way that I could satisfy a lot of intellectual curiosity and learn. I mentioned going to the sports conferences through my first decade as a young professional. Essentially, it was getting that information on a daily basis depending on who was I'm subscribing to and listening to through this form.

Paul: 46:18 My friend at the time who I was working closely with on a few projects who's now our manager of content and a savant when it comes to digital, social widely technology, his name is Tyler Steinhart. He was tapping on my shoulder and knew my relationship with someone like Bill Belichick and Venus Williams and Steve Nash, and other folks who was like, "You love podcast. We're always talking about it and sharing podcast, why don't you start your own and share some of these conversations you have with those guys?" like Jeremy Lynn and stuff like that.

Paul: 46:48 I had thought about it because at the time I was getting approached by a lot of networks who do a lacrosse specific show, I was doing enough lacrosse stuff. I just enjoy sitting down with people like you and talking. That was the empathies of launching the show but as you know, it's a ton of work. My podcast is called Suiting Up with Paul Rabil. We've done 70 plus shows. I was doing it on a weekly basis for the first year and a half. Then we started building the PLL and you have to prioritize.

Paul: 47:17 Yeah, it ties back to your other questions like how do you think about social. Podcasting is a form of a social network now and I think there's properties right now that are trying to synthesize the tools and tech like a Spotify and Apple Pod and those were evolving. I've decided to re-launch the show on a season based strategy, so 12 episodes will be starting in June. I've already begun recording with some guest.

Ted: 47:45 What are the most important lessons you learned from the interviews you did on your podcast?

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Paul: 47:51 There are fantastic lessons from each of these conversations whether that's again with the folks that I've mentioned or Tony Robins or Scott Galloway who's the professor of business marketing in NYU Stern, nine time entrepreneur, two time New York Times bestselling author, Ryan Holiday … They give you tactics when you sit down with them but at really high level … We all hear this but it's great speakers can frame things really well and they resonate as a result.

Paul: 48:19 To create something meaningful that has an impact and a legacy, there's literally no way around the work that's required to create. It's time consuming. It requires an insane level of endurance and speed, partially talent but mostly endurance. We often romanticize successful entrepreneurs are athletes or entertainers but behind the scenes are just full immersion and real sacrifice. It's motivating for me and it also gives me a concrete episode to go back to on a random basis because they all talk about it when times are lonely or dark or struggling and building these things like everyone goes through it.

Ted: 49:07 That's right. You mentioned your learning differences. It's one thing to have gone through it and battled and figured out how you'd learn but you also created a foundation focusing on it. I want you to touch a little bit about the Rabil Foundation.

Paul: 49:21 Yeah. We started that in 2011. I was 25 at the time and was just catching momentum from social media as we had talked. I had come off my first MVP in pro lacrosse. I felt like because of … I'll say really fortunate to have parents that constantly instilled humility and gratitude that I was at a point where I could impact. It probably came a lot from the interactions that I had in abundance through the Camp & Clinics kind of things with Youth America that there is an opportunity for me to reflect on how I was able to get to this position.

Paul: 50:00 That was mainly through support. What I could do now with the opportunity in the platform that I had to try and contribute, and so I sat down with my folks and few other mentors. We decide to launch the Paul Rabil Foundation. The goal was to at first, provide lacrosse equipment and educate coaches to schools that didn't have access to the sport that were focused primarily on educating children with learning differences.

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Paul: 50:29 There's a much larger conversation going on in the US and particularly around public schools that have LD departments. Outside of a handful of states, most actually don't recognize specific learning differences. As a result, because of that governed recognition, all kids with different … Whether it's autism to dyslexia to ADHD to arbitrary processing disorder, they're all put in the same classroom. It's not a conducive learning environment and so there's challenges.

Paul: 50:56 That's why private school education for children with learning differences is really helpful but it's expensive. Just like any private school, they try to allocate the resources to their teachers and they don't have much extracurricular. We sat down and said, "Lacrosse was a huge confidence booster for me who struggled with confidence in the classroom. Let me try to start there." Then the more we dug in and the gratitude that came from our school partners, the more we said, "Okay.

Paul: 51:23 Let's use this platform to raise money and start scholarship fund too." We gave market grant scholarships to families and kids in need of that financial aids to go to those specialty programs.

Ted: 51:35 That's great. I got to ask right now, when is the first weekend?

Paul: 51:37 Yeah, yeah, great. Yeah, yeah, June 1st is when we play our first game. That's at Gillette Stadium. Right now we're in that. We've been announcing our venues over the last month and a half on a chronological order, so we're starting at Gillette. That's June 1st and the 2nd, two games on a Saturday, one on Sunday that will be on NBC. The second week is going to be at Red Bull Arena in New York.

Paul: 51:58 The third week is going to be at the new SeatGeek venue which is formerly Toyota Park in Chicago, CMLS venue there. The fourth weekend we announced is going to be at actually Johns Hopkins Homewood Field. It's one of our two college venues. Then the fifth weekend, we just announced yesterday is at Georgia State which is former Turner Field in Atlanta Georgia. Right now, we've been getting a lot of conversation around tour-based and approaching new markets.

Paul: 52:23 We're in a lot of east coast markets for our announcement. We'll explain more when we finalize the announcements of our schedule in its entirety but no different than NASCAR or the

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WWE. You got to synthesize the process through business ops. It doesn't make sense for us as a company to be in New York week one, to be in California week two, to be in Philadelphia week three, to be in the pacific northwest in week four.

Ted: 52:50 [crosstalk 00:52:50] across the country, yeah.

Paul: 52:51 I knew this is a big operation, right? We have 55 foot trailers that are going from one market to the next but these are also venues that are working with us very closely and committing resources and support through everything from security and vending and parking to actual marketing to sales. This is a very collaborative experience on a week to week basis. I will give a quick shout out to your SVP of strategic operations, Andrew Sandberg.

Paul: 53:18 He was an early employee at Spartan Race and then went to Wharton School of Business, helped scale [inaudible 00:53:23]. He's one of the sharpest people I've ever been around and does the work output of probably three people on a daily basis. He leads those ops and he was Mike and my second employee. The first was Carl Harrison. He's been in the trenches with us for a long time and knows the tour-based product very well.

Ted: 53:41 All right, Paul. I know you got to run but we have to have some time for this closing question. What's your favorite hobby or activity outside of work and family?

Paul: 53:50 It changes, part of my like obsessive compulsive personality but my mom's an art teacher, my dad was a paper salesman. Now, our dad works for the PLL and he helps lead our youth efforts through PLL academy. Going back to my mom, I took her art classes growing up and I love the arts. I had an art scholarship in high school. I've gotten back in the arts, so I'm painting a lot acrylic painting.

Ted: 54:15 What's your biggest pet peeve?

Paul: 54:17 I'll say this. It might be crude for the podcast but as an athlete, you're always back and forth in the locker room. I really dislike when there is a teammate who goes to the bathroom, leaves the seat down and pees all over the toilet. It means he have all this adrenaline rushing, right and you're like hydrating during the day because you have a big 60 minute match. Sometimes I'll

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put a sign up. I don't know why. It's like the case probably going back to that OCD around cleanliness.

Ted: 54:49 This is interesting but for you, what's your favorite thing to read?

Paul: 54:54 I've become very fond of what's categorized and I'm not sure, this should be the case. I think it should change in a Barnes & Noble or a bookstore is self-help books. I refer to them as self-growth is I love reading about the human psychology. It's beneficial to me personally, to people that I work with professionally, to investors that we interact with and to my ability to lead on the field or interact with team mates. The first real self-growth book I read was Daring Greatly by Brene Brown. That's caught fire over the last few years but Harriet Lerner, Esther Perel, those were all are great authors of books that I like to read.

Ted: 55:37 What teaching from your parents has most stayed with you?

Paul: 55:40 They've taught me a lot. I would probably say always saying thank you and understanding that there are patterns that have developed and opportunities that have opened up that I am getting access to because of my brother, my younger sister, my mom and dad or people within our network or outside of our network, so being very aware of that. Then work ethic but the one that they continue to harp on now is relax and smile and enjoy the moment as I think they'd feel probably pretty good about what Mike and I are doing from an effort and comprehension standpoint, so just want to make sure we're not getting too carried away.

Ted: 56:22 Alright, last one. What life lesson have you learned that you wish you knew a lot earlier in your life?

Paul: 56:28 Empathy I would say. I think it's probably the most powerful skill that any person can have no matter what you do. I wish I had it. It's hypothetical and that it requires experience and failure to really learn and maturity. I would love to have had it when I was younger, unrealistic but what I have now and what I'm just trying to continue to improve and strengthen is my ability to empathize that it helps you as an executive, it helps you as a player, it helps you as a friend and a son and a partner.

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Paul: 57:07 I think a way that I at least share with folks on my podcast and have some of these conversations that empathy often gets framed in the way of something that's negative or sad or challenging. It's like how can you empathize with this person? The next question is, well, if you've never experienced that moment, it's difficult to be in that person's shoes. That's like empathy at its best is if someone can be in the moment with someone else who's suffering but what you can do to work on that skill is actually in the inverse.

Paul: 57:42 I call it positive empathy. Empathy isn't just around something that's challenging. I'll give you an example in sports. If you have a team mate who makes a game winning goal, and we're all competitors and we'd all love to have the game winning goal, if you find yourself reactively shunning and you're saying, "I'm pumped because we won but I would love to have … I missed that last shot," it's not the right mindset.

Paul: 58:07 Celebrate other's victories too, celebrate other's wins. If someone in your work place gets promoted, try to really be with them and be excited. Positive empathy is a lot easier but if you're not good at that, you're definitely not going to be good at consoling in the times of struggles.

Ted: 58:25 Paul, this has been awesome. I wish you knew the best of luck. We'll be watching. Thanks so much for taking the time.

Paul: 58:32 Thanks for having me. I really appreciate it.

Ted: 58:35 Thanks for listening to this episode. I hope you found a nugget or two to takeaway and apply in your investing and your life. If you've liked what you heard, please tell a friend and maybe even write a review on iTunes, you'll help others discover the show and I thank you for it. Have a good one and see you next time.