Golf's Venture Investing Club You've Never Heard Of

Breaking down Old Tom Venture Club

Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 143 new Perfect Putt members who have joined us since the last newsletter. Join 8,294 intelligent and curious golfers by subscribing below.

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Read Time: 6 minutes.

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Today’s newsletter is powered by Pinehurst.

Your next golf trip? Pinehurst.

A day in Pinehurst is unlike any day – anywhere — in golf.

At Pinehurst Resort, a day can be spent on the U.S. Open’s first Anchor Site and Donald Ross’s famed masterpiece, Pinehurst No. 2. The 2024 U.S. Open will be the fourth played at Pinehurst in the last 25 years, setting the stage for four more championships to return to the hallowed site over the next two decades.

And there is so much more.

• The rollicking Cradle short course

• Gil Hanse’s design of Pinehurst No. 4

• Tom Doak’s design is opening in April 2024

When you are done with the golf — Pinehurst Brewing Company awaits with barbecue and craft beer. Have conversations with friends around fire pits. And stay at fully renovated, historical hotels.

It’s a beautiful day in Pinehurst.

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Hey Golfers —

Golf is a massive business.

The American Golf Industry Coalition commissioned a study conducted by the National Golf Foundation to learn about the economic impact of golf in 2022. The sport had a direct economic impact of $102 billion in the United States — an increase of 20% from 2016.

Even better — golf continues to grow. The industry has seen nine straight years with more than 2 million beginner golfers — the last three years have seen over three million beginner golfers.

Here are some quick stats:

• 3.4 million juniors played on-course golf in 2022 — the highest level since 2006. The 900,000 rise in junior golfers over the last three years is the most significant jump (36%) of any on-course participation segment.

• More than 1/3 of the U.S. population over the age of five played on-course or off-course golf, watched golf on TV, read about the game, or listened to a golf-related podcast in 2022 — a 12% increase over the prior year.

• There were around 6.4 million female on-course golfers in 2022. Female golfers have surpassed 6 million in the last three years — the first time since 2007.

• Since 2019, the net gain of female golfers has been 800,000, a 14% increase.

Golf is one of the most popular recreational sports in America. Both on-course golf and off-course golf rank in the top ten in participation.

• Bicycling — 43.5 million

• Bowling — 42.3 million

• Freshwater fishing — 41.8 million

• Basketball — 28.2 million

• On-course golf — 25.7 million

• Tennis — 15.8 million

• Off-course golf — 15.5 million

• Baseball — 15.5 million

• Saltwater fishing — 14.3 million

Off-course golf is America's fourth fastest-growing sport, growing 68% from 2018 to 2022.

• Pickleball — 171%

• Alpine skiing — 115%

• Winter fat biking — 69%

• Off-course golf — 68%

• Snowboard touring — 59%

• Skateboarding — 39%

• Trail running — 32%

• Tennis — 32%

• Surfing — 29%

Considering the overall size of the golf industry and the growth in traditional and nascent areas — golf is an opportunistic area for investors. And that is exactly what Matt Erley and Evan Roosevelt are doing with Old Tom Venture Club.

Matt has spent the better part of his career on the growth side of startups — including Drizzly and Havenly. He began to do some angel investing outside of golf, which eventually led to discussions with entrepreneurs in the golf community. Along the way, he met Evan — who co-founded Random Golf Club.

Matt and Evan developed a simple thesis — there isn’t enough capital being deployed in the golf industry.

The duo identified a subset problem of their thesis. If founders don’t have exits in the golf industry — it is less likely they will reinvest back into the industry. And if founders aren’t reinvesting back into the space — innovation and disruption will slow.

So they founded Old Tom Venture Club a little over a year ago. And they have created an interesting value proposition for prospective investors and companies looking for investment — a syndicate.

Here is how it works.

Old Tom Venture Club Syndicate has an initiation fee of $1,500 — there is no annual fee.

To qualify for the syndicate, you need to be an accredited investor. To be an accredited investor, you need to have one of the following:

• Make over $200,000 per year individually or $300,000 per year jointly.

• Have a net worth of over $1 million, excluding your primary residence.

Old Tom Venture Club will do due diligence on several dozen companies in 2024. Once they select a company to invest in, they will share documents for a syndicate member to review. A member can choose to invest in the company or sit it out. Syndicate members can write checks as small as $10,000, allowing members access and participation far below the minimum threshold if they were investing directly in the company.

Old Tom Venture Club looks at twelve areas to invest within the golf industry.

And they stay away from three areas to invest in.

• Golf courses

• Hyper competitive categories such as golf apparel or club manufacturing.

• Startups that don’t have the opportunity to scale quickly to $100M+ in enterprise value.

That isn’t to say the three areas are bad areas of golf. There just isn’t enough arbitrage as a venture investor.

Old Tom Venture Club Syndicate has over 100 members — ranging from a Top 50 professional golfer to members of the top golf courses in America. Old Tom Venture Club plans on investing in eight companies in 2024. The syndicate invested in four companies in 2023.

• Fairgame

• Dryvebox

• Puttr

• Sweetens Cove Spirits

If you are curious about becoming a member of the Old Tom Venture Club Syndicate — reach out to Matt and Evan on their website.

Here is what interests me about Old Tom Venture Club — golf needs more investment.

The golf industry has seen significant investments and acquisitions in the last three years. From Centroid acquiring TaylorMade for a reported $1.9 billion in 2021 to Callaway completing the acquisition of Topgolf for $2.6 billion.

Venture and acquisition momentum is building in golf.

Old Tom Venture Club offers a different strategy for investing that we currently aren’t offered in the space. In fact — there are very few investment firms even focusing on golf. 8AM Golf has invested in several companies over the past few years, and the PGA of America partnered with Elysian Park Ventures to form EP Golf Ventures (a smart move to support PGA of America members).

Golf is attracting entrepreneurs to build in the space — which will lead to many positives in the industry — including new technology and innovation.

And I am rooting hard for the entrepreneurs in the industry — it will improve the game. Having more capital available to be deployed gets me even more excited for the game's future.

Have yourself a great Monday. Talk to you next week!

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