IVCA Feature: New Member Profile of KB Partners

IVCA Feature: New Member Profile of KB Partners

September 26, 2018

Sometimes the expansion of our IVCA membership means welcoming back old friends.  IVCA is pleased to announce our newest member, KB Partners. KB Partners is a early stage venture capital investment firm investing in “passionate innovators at the intersection of sports and technology.”
 
The following is a Q&A profile with KB Partners, which explores the firm’s background and their expectations for interacting with the IVCA.
 
New Member: KB Partners
Representative: Lance Dietz, Investment Professional
 
IVCA: What is a brief history and background of KB Partners?
 
KB Partners: KB Partners is a suburban Chicago-based investment firm focused on early stage venture capital investments. We help build dominant new enterprises by working in partnership with talented entrepreneurs and experienced managers.
 
Our firm got its start in 1996 by making a series of angel investments in a variety of early stage companies. We then raised two early stage technology-oriented traditional venture capital funds, KB Partners Venture Fund I and KB Partners Venture Fund II, from a group of high net worth individuals and institutional investors. After the two venture funds were invested and harvested, company Founder Keith Bank returned to angel investing in individual deals in combination with a variety of co-investors. We are now investing out of KB Partners Myriad Opportunity Fund, which is primarily focused on making early stage investments at the intersection of sports and technology.
 
We have recently built out a diverse and experienced team. Steve Ahern and Lance Dietz joined KB from their most recent positions as investment bankers at Citigroup and JP Morgan respectively, and round out the three-person investment team. They bring KB Partners broad experience in operations, management, and finance. The firm also recruited two venture partners and an eight-person advisory board that includes highly successful entrepreneurs and operators, media and digital media veterans, sports executives and agents, consultants, and seasoned sports and tech investors.
 
IVCA: Why did the firm decide to join the Illinois Venture Capital Association?
 
KB Partners: Our founder, Keith Bank, was a founding board member of the IVCA in 2000, recognizing the need for a professional PE/VC organization in Illinois and Chicago. He served as Chairman for 2005/06 and was the recipient of the IVCA’s prestigious Fellows Medal in 2006.
 
As we decided to raise a new fund this year, one of our main priorities was to get more involved with the local venture community and overall investor community. There are some incredible founders and investors in the Chicagoland area, and we want to be a significant part of fueling innovation here in the Midwest. In the seven to eight years prior to raising our latest fund, the firm had a greater focus on angel investments and did not necessarily have as great of a need to be part of a larger organization. However, with the launch of the fund, and the addition of two additional investment professionals, venture partners and an advisory board to support the new fund, we are excited to again be part of the IVCA.
 
IVCA: Your main investment focus now is ‘the intersection between sports and technology.’ What are examples of the types of entrepreneurship that define that intersection?
 
KB Partners: Over the past 20 plus years, Keith Bank has been investing at the intersection of sports and technology. One of his early investments at this intersection is Chicagoland-based Club Champion, the country’s Number One premium golf club fitter – the company uses advanced technology to customize clubs and find the best fit for each golfer’s swing. This intersection of sports and technology has only recently gained traction as an important area of focus and investment for companies and investors. The global sports industry was estimated at over $1 trillion in 2017, and we believe there will continue to be an increased emphasis on the use of technology in all things sports-related. Within the intersection of sports and technology, there are a broad range of verticals. Some of those on which we focus include...
 

  • The use of sensors, wearables and advanced data analytics to enhance player performance, general fitness, coaching and athlete recruiting.
  • New forms of immersive media, fan engagement and analytics, enabling the creation of engaging entertainment experiences that connect audiences more than ever before.
  • The proliferation of smart venue technologies that seek to optimize venue operations, reduce fan friction and create more engaging and dynamically targeted fan experiences.
  • The rapidly growing derivative sports market, including eSports [video game competition], fantasy sports and sports betting, which was most recently brought into the forefront with the May 2018 PASPA repeal [which allows more states to offer sports betting].
  • And of course, youth sports products, service and technologies.
 
While seemingly a ‘niche’ focus, the world within sports-tech is quite large, as it extends beyond the traditional ‘technology for professional/college sports teams’ view and into just about the  every day life of everyone.
 
IVCA: Early stage investing also requires some sweat equity from the firm. What expertise do you have available and/or offer to assist an early stage company in getting to the next level?
 
 
KB Partners: We see ourselves as a resource for an entrepreneur or founder as he or she strives to achieve certain goals on the path to significant growth and profitability. We believe we can assist with business strategy, product development insights, key-hire recruiting, advisor introductions and capital raising, to name a few. We want to be the first call when an entrepreneur has an idea, a problem or question.
 
Keith is an entrepreneur himself, having co-founded the country’s largest custom golf equipment retailer, a roll up of semi-conductor services businesses, a discount retail chain, and led the turnaround of a women's apparel manufacturing company., He has also raised capital for and produced two feature films, in addition to his 20 plus years of early stage investing, in which he participated as an active member of the board of many companies.
 
Each of our additional team members are entrepreneurs at heart, having built, managed, and led teams, big and small. We bring to the table a wide range of experiences that vary from leading combat patrols in Afghanistan as an Army officer, to negotiating media content rights contracts, to advising on multi-billion-dollar transactions. Additionally, our venture partners and advisory board members bring another set of experiences and a wide-ranging network – many were entrepreneurs themselves or leaders managing teams within larger companies.
 
IVCA: You have a win/win strategy in your mission statement regarding both the investment/investors and the innovative entrepreneurs you're investing in. What kind of relationship or cooperative force do you believe is necessary for that win/win to take place?
 
KB Partners: We see the funding of a startup as the beginning of a long-term, multi-year relationship with the entrepreneur and we are there to support, encourage and assist through both good times and adversity. The entrepreneur is the one with vision – in making an investment, we’ve said ‘we believe in you and will do everything we can to help you realize that vision.’ If the entrepreneur is not happy or satisfied with our partnership, it is unlikely that things will progress in a manner that makes us and our investors happy. Therefore, we look for entrepreneurs who share a similar ‘partnership’ mentality... we will rarely make an investment unless we believe we can be a value-add partner to the entrepreneur and feel the entrepreneur is looking for the same.
 
While there are going to be difficult conversations and decisions throughout the life of a startup, we want to be aligned with each entrepreneur and the vision he or she has for the future. Additionally, with our long-term outlook, we look to create an environment in which an entrepreneur will want to work with us even beyond his or her current startup. In the past, we’ve seen previously backed entrepreneurs help us find new investment opportunities, make connections for key hires, mentor other entrepreneurs within our portfolio and give us feedback to improve our process. Ultimately, the win-win mentality extends far beyond the financing and even a successful exit.
 
IVCA: What do KB Partners hope to achieve in their interaction with the VC/PC community within the IVCA?
 
KB Partners: We are excited to be a part of the IVCA community again and see it as a great way to continue supporting the innovation and startup ecosystem here in Chicago, the State of Illinois and the Midwest. We look forward to sharing our insights and best practices, while also learning from and collaborating with other investors on investment opportunities.
 
For more information on KB Partners, go to www.KBPartners.com