Fausto Zanetton, the founder and CEO of Tifosy, is living a sports fan’s dream. He helps athletic clubs raise funds online by connecting them with their global fanbase. He works with the some of the most revered clubs in the most celebrated stadiums in the world.
With the mission to enable everyone to invest in sports in a fair and transparent way, Zanetton founded Tifosy and coined the term fanfunding to indicate the financial support supplied by sports fans and aficionados.
Prior to Tifosy, Zanetton worked in investment banking at Morgan Stanley and Goldman Sachs covering the technology, media and telecoms sector with a specialization in digital media and sports. An MBA graduate of London Business School, Zanetton worked as a CPA for PricewaterhouseCoopers in their Boston, Los Angeles and Brussels offices.
Tifosy, the first fully-licensed sports crowdfunding platform, initiated a self-crowdfunding campaign earlier this month and the crowd has responded with a roar: the campaign is currently overfunding its £1M goal from over 116 fanfunders, with time remaining on the clock… Safe Standing is also currently live on the site; a future mini bond deal for Frosinone Calcio is expected. To date, over £2,589,890 has been raised in 22 campaigns from investors from 76 countries.
I recently caught up with Zanetton to discuss his founding, building and growing his crowdfunding platform, aligning with Italian footballer and manager Gianluca Vialli and predictions for next year’s European Cup and World Cup. Our interview follows:
Erin: How did you tap and how do you continue to reach out to investors? Who are your more active Fanfunders?
Fausto: Since the beginning of our journey we have been supported by a fantastic group of angel investors from all over the world. They have seen all the hard work we are putting into this company first-hand and as a result, they have encouraged us to reach out to the more than 10,000 people that have invested through Tifosy by running our own equity crowdfunding campaign. This made a lot of sense, given we’ve seen time and time again in campaigns that activating your existing network really helps to get things going. In order to reach an even larger group of people, we have promoted our raise through our own social channels, as well as some run some paid ads (primarily an awareness tool). Comms around key milestones have always proved to be effective, especially to those who have certified but yet to invest, so we have applied a direct strategy to reach out to those individuals. In addition, we also have benefited from an incredible media reaction and were able to get published in a number of leading publications, which drove a lot of additional traffic.
Erin: Please share information about Tifosy’s beginnings. I read that you met former Italian footballer and manager Gianluca Vialli after a talk at London Business School. How did that first conversation lead to the next? What led to your cofounding a crowdfunding platform together?
Fausto: I was already kicking around the idea of alternative funding for professional sports clubs whilst working as an investment banker, frustrated by traditional investors unable to see to the enormous potential that clubs’ rapidly increasing digital audiences represented. Around the same time, I went to a talk at the London Business School by Gianluca Vialli – a football legend and boyhood hero of mine. Gianluca spoke of the growing disengagement between clubs and fans and the increasing need to address that in a global context. It was clear that Gianluca and I were aligned in improving the current state of play in professional sports, so after many evenings around his kitchen table formulating a plan to resolve financing and fan engagement, Tifosy was born.
[clickToTweet tweet=”Q&A with @tifsy founder @fzanetton #futbol #football @crowdfundinside” quote=”‘It was clear that Gianluca and I were aligned in improving the current state of play in professional sports, so after many evenings around his kitchen table formulating a plan to resolve financing and fan engagement, Tifosy was born,’ shared Fausto Zanetton. “]
Erin: How have your past positions working for Morgan Stanley, Goldman Sachs and PWC in global M&A, IPOs, debt financings and private placements prepared you for this exciting career move?
Fausto: My previous work experience gave me a unique understanding and insight into the sports ecosystem and how sports clubs finance themselves. I wouldn’t have been able to come up with a tech-driven finance proposition without that previous knowledge. It allowed me to put the pieces of the puzzle together at a time when crowdfunding was still in its infancy and gave us a valuable head start. To this day, it provides me with strong credibility to discuss complex financing with any sports club. In addition, working in M&A for all these years taught me that there is always a solution to any problem and that through hard work, discipline and self-belief, no task is unsurmountable.
Erin: What lessons have you learned from launching a crowdfunding platform? What would you do differently? What would you do again?
Fausto: Like any startup, we have learned a lot of lessons in our first couple of years. Most of these have been on the execution of our campaigns – we’ve become very knowledgeable on the psychology of crowdfunding and investing, and how this can be applied in the sports context.
In terms of what I would do differently, two things: I’d start even earlier on getting our license in place, because that process took a very long time and we had to wait for it before running investment campaigns; and secondly, I’d get into a broader range of sports sooner: there’s huge opportunity beyond football, in rugby, cricket, golf, motorsports, and more.
In terms of what I’d keep the same, pretty much the rest. We have a great team who know their stuff well and although we’ve had difficult moments, the challenges built strength and deep understanding and we’re reaping the rewards of that now.
Erin: Why did you start working with British clubs first? In addition to Italy, where do you see potential for Tifosy’s growth?
Fausto: It was natural that the UK and Italy would be our first markets. Luca and myself call London our home and have done so for many years, but we obviously have strong connections in Italy. These countries are also two of the largest sports markets in the world, with a large amount of passion for sport. However, we are certainly not limited to those two markets and are already in conversations with major sports clubs in other European markets whilst also looking to expand outside of Europe over time. Essentially, wherever there is a professional club, there is an opportunity for Fanfunding. Our long-term goal is to be a global sports crowdfunding platform, connecting sports clubs and fans anywhere in the world digitally.
[clickToTweet tweet=”Transparency & Trust: @tifosy @fzanetton #crowdfunding @sportsclubs @crowdfundinside” quote=”‘Transparency and trust underpin everything we do, in fact our mission statement is ‘to enable fans to invest in the clubs they love in a fair and transparent manner,’ stated Fausto Zanetton.”]
Erin: How have you vetted and established a pipeline for future campaigns with other professional sports clubs? How will Brexit affect Tifosy’s growth?
Fausto: Transparency and trust underpin everything we do, in fact our mission statement is ‘to enable fans to invest in the clubs they love in a fair and transparent manner.’ And that is something we live by. Before committing to a project, we do our due diligence, ensure we are comfortable with the club, its ownership and the campaign, and would only launch if we are confident that the project would benefit BOTH club and fans. We have in fact turned down projects where we could not guarantee all of those things.
In terms of our pipeline, we have been developing relationships with clubs since conception – understanding their challenges and ambitions, and almost always, our proposition has been received incredibly well. Now, after receiving our FCA license and having delivered our first financial campaigns, we are now there. We will be launching our first financial campaign in Italy with Frosinone very shortly and watch this space for some very exciting news.
Leaving the absurdity of Brexit and the socio-economic repercussions on the UK aside, we are well prepared for Brexit. Even in the event of a hard Brexit and loss of European passporting, there will be a multi-year transition period. However, we will hedge ourselves and in due course add a second European license. For this, we have spoken to a number of relevant bodies across Europe.
[clickToTweet tweet=”.@tifosy @@fzanetton: ‘We are prepared for Brexit!’ @crowdfundinside” quote=”‘Leaving the absurdity of Brexit and the socio-economic repercussions on the UK aside, we are well prepared for Brexit,’ opined Zanetton.”]
Erin: What changes do you see happening in sports clubs and how does Tifosy aim to address and affect such changes?
Fausto: Sports clubs are having to contend with enormous changes in their industry. Sport has become the hottest property in the world of entertainment and clubs at all levels are having to fight for attention – providing the best team performance and matchday experience, producing the best content to engage a global digital fanbase, appealing to the biggest sponsors who want to integrate their brand into the offering. This provides a lot of challenges, chief amongst which are the need for new sources of funding and new ways to reach and engage their fanbase, both at home and internationally. Our campaigns are a good fit for these challenges: providing a new source of capital as fans get together to invest collectively in important projects, and the ultimate way of connecting with supporters is to allow them to invest in your future.
Erin: Where do you see fault lines in equity crowdfunding and how can these become areas for Tifosy’s future disruption and innovation?
Fausto: Whilst equity crowdfunding is an amazing financial innovation enabled by technology, currently there is limited opportunity for shareholders to trade their shares on a secondary market instead of holding until maturity. This is compounded by the very limited amount of successful exits that we have seen in the crowdfunding space. Over time, Tifosy could become the hub where fans and investors could trade sports securities.
Erin: How can financial crowdfunding continue to grow at a fast clip? How will VC, private equity and crowdfunding platforms morph in the next 2 years? 5 years? 10 years?
Fausto: I foresee that the sector will keep growing at a very rapid pace. There are many secular drivers that underpin this growth (increase in internet/mobile penetration, strong social media growth, leaner regulatory regimes, familiarity with online investing, etc) and will drive more entrepreneurs and companies to seek online funding. I also believe that crowdfunding will become more and more complementary to traditional institutional funding options and that you will see a lot more hybrid rounds (VC/private equity + crowdfunding).
Erin: What are some personal highlights of working with the world’s best clubs and footballers?
Fausto: To be able to say that I’m working whilst attending some of the biggest games in the world is a nice perk that goes with the job….
Erin: Please share your team picks — if you’re permitted! — for next year’s European Cup and World Cup.
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