0:03 spk_0

Welcome to a new episode of the opening bid Unfiltered podcast. I’m Yahoo Finance executive editor Brian Sasi coming to you from the NASDAQ in Times Square, really jazzed, uh, about our special guest, uh, for this episode’s Jason Stein, co-founder and managing partner at SC Holdings. Jason, it’s good to, uh, good to see you in the flesh. Appreciate you joining us.

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Good to be here, Brian. Thanks for having me. So,

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um, take us those not I guess for familiar with what you invest in, how you invest in it. Take us through what the portfolio, uh, looks like today because I, I originally came across, um, you know, what you have done with athletic greens or AG1 hyper price, uh, front office sports, but you know, take us through, uh, what you’ve been working on.

0:44 spk_1

Sure, so, so we invest across, uh, consumer hospitality, sports and entertainment we have investments across all of those sectors. We, um, we generally only invest in growing profitable businesses. So, so middle to later stage businesses that still have a lot of room to grow, but are far past the early stage, venture stage, Series A, A stage. Um, we’ve had investments in the companies like you said, like Front Office Sports much, much earlier on.Uh, we exited that to Red Bird last year, uh, and, and Jeff Zucker. We, um, we’re investors in, uh, AG1, formerly known as Athletic Greens, which is, has been a really wonderful, uh, investment and journey for us thus far. Uh, we have another consumer wellness product called Circle, spelled C A R K U L, which is a water bottle with a flavor cartridge that that goes inside and uh went viral on TikTok, you may have seen it there. You,

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you’re behind Circle.

1:39 spk_1

Yes, yes. Um, it’s, it’s, uh, it’s another one that’s that’s had a wonderful run for us and um.You know, both of those products is, you know, speak, speak to something that’s very important to us, which is format innovation. Uh, AG1 did not invent vitamins or probiotics, preotics, minerals, supplements, that that’s a $250 billion market. They, they simply uh took a lot of most important ones that that you take every day, put it into a powder, combined all of them, so you have 50 different pills in the morning, and, and somehow made it taste good.And um and so to us that that’s, we’re not looking to reinvent new categories. That’s what that’s for venture capital. Uh we like categories that are really, really big and companies that have some unique format innovation inside of them. Uh, and, and, uh, certainly you want is at in circle also is, is, it’s every soda, water, flavored water, carbonated beverage that that you could have in, in uh in a capsule that that goes inside your water bottle.

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Um.What is the play or what’s the first of all, uh, you’ve been early in a lot of things, um, athletic greens, a lot of the names when I was going through your portfolio, what have you, what did you identify a couple of years ago that’s now starting to take fruition and you see companies like uh an AG one, getting an even higher valuation today?

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Yeah, it’s, it’s interesting. So it, it feels early, but, uh, AG1 was around for 10 years before we ever invested. We were the first outside capital, institutional capital that came in. They had a couple of very small friends and family around along the way. So they were 10 years in and uh they had grown linearly for all 10 of those years until COVID. And so that they, they doubled during 2020 to uh uh about uh $50 million of revenue at the time.And so everyone we’re talking to our investors, um, and, and others in the industry are like, oh, this has to be a COVID bump. Why else would it double all of a sudden, this is going to be a fad. Everyone’s at home worried about getting sick, ordering stuff online, of course, it doubled and um.What we saw was a really, really sticky customer base by by going through all of their, uh, their data, their cohorts of, of people, and when when customers signed up, they weren’t leaving. This goes back for many, many years. It just so happened that it increased more during COVID, but those people were, were sticking around. And so it’s really a matter of looking at the data and and understanding uh the stickiness of, of the business and it’s umIt’s, it’s something I’ve been doing for my whole career, even before I was an investor. I mean, when I, when I first started out, investing had always been my passion from a young age. I was obsessed with the stock market, um, and, uh, when, when Facebook was, was IPOing, I’m sure you remember, but everybody thought this thing was a fad. Ads don’t work, it doesn’t work on mobile. Why would anyone invest in an ad on social media?And um and I was following that as an investor and I said there’s gotta be a way to build a business in this space and, and I started my first business at the time, this was in, um, started the business in 2010, really took off in 2011, 2012, and we were, we were managing social media channels for um fortunately by their brands, Nike.Used by Apple, Amazon and and building out what what became huge parts of their businesses for them, infrastructure inside their companies, uh, and all the creative work alongside of it. And, um, and I just remember looking at the data and seeing people were spending so much time on these channels, and they were clicking on the ads and they were actually working, but everyone just decided that uh it was a fad. And so I think you have to look at the data, ignore all the media, uh, that, that, um.All the noise around the naysayers if you have actual hard data around it.

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Uh, you know, I was looking, um, thinking about some of the products that you’re invested in athletic greens. I take it daily. It, it works for me. Uh, when I order the stuff, it comes in a nice like glass bottle with a silver cap on it. I mean, I dig it makes me feel like a premium human being. I, I have.If a bunch of recovery products from a competitor, we won’t mention them nonetheless I have them is the play there folks such as myself, like the aging millennial that in their head thinks they are an athlete or they want to be an athlete.

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There’s there’s a huge market in in that person for sure. Um.But you’d be surprised how many young people or how many older people are taking and using these products for all the same reasons. Longevity is, is becoming, uh, an important topic for people of all ages now, and they’re focusing on it more. When, when we invested in, in athletic greens, I, I mentioned there in the $50 million revenue range, that business has, has more than 10x since that time period, over 600 million of revenue now, which, uh, which they’ve they’ve publicly disclosed and it’s a profitable business, it’s a growing business andAt the time there was only one product. So, so that was the question, who would, who would, who would take this, how big could it get? Um, and obviously it’s, it’s proven that that it can get pretty big. But now beyond that, it’s that people want more than just energy. They, they’re now sleep is becoming a huge, uh, a huge topic in terms of longevity and wellness and, um, recovery and, and preventing illness. And so, so AG is coming out with AGZ which, which will be coming out inUh, in the next, um, month, actually. And if you like AG1, I think you’ll also really love, love this. I’ve been a guinea pig for it for the last year. I get to test all the things that may or may not come out for them. It’s my favorite thing todo.

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So, so, Jason, you, you jump, you wake up jumping out of your bed after you take these, uh, vitamins. Because I, I asked you that because I started taking recently like sleep oriented vitamins. I do feel like I wake up better. But I mean, to your point, I, it seems like the recovery market.It almost has no no boundaries. I, I may sound ridiculous, but I mean there’s so many growth opportunities left.

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Uh, I, I, I just view it as, as wellness overall and recovery is a huge part of it. And if you, if you go to bed feeling good and you sleep well, you’re gonna wake up feeling good, and that is the whole point of, of this, this product. It’s, it’s not just doesn’t make you sleep well, but doesn’t make you wake up well, and, and I agree that theThe capacity for this market to grow is is quite large. It’s, it’s a, the supplement market the $250 billion dollar market today, it’s forecasted to double by 2033. That’s pretty massive. Um, and I think people are just realizing of all the, the stupid things we all spend money on the boo boos and, and yeah,

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you don’t have any of those, no way, no way you have, you don’t have

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3 kids under 10. I’ve, I’ve, I have way too many Lebobus, but, but, um.Why, why wouldn’t we be spending way more on health? One of our investments is in a company called Atria, which is a a concierge medicine business based in Manhattan, founded by Alan Tish, uh, and, and it’s just providing all the most cutting edge, um, medical services to, um, to people who, who want to spend on, on that as opposed to other, other things, and, and I thinkIt’s funny talking about the boo boos. Everyone always says, or is this a fad, the things we invest in, right? They do one circle, are kids going to keep doing it, uh, taking it, uh, and will continue to be popular online and the uh a fed to me is something that has no utility, right? Beanie babies, um, most NFTs.Uh, the boo boos, right? The boo boos will come and go. There’s no question. I will pay any amount of money on it. People don’t realize they’ve been around for 10 years. It’s a Chinese company that has been making them, and there’s no point to them. They’re cute, just like Beanie babies were cute. You are

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so getting dragged on on X on TikTok. I’m not, I’m, I like them. I’m not saying anything. I’m not even, I’m not getting in this conversation, man.

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I love, I love the boo boos. My daughter, my seven year old daughter loves them. I’ve bought way too many of them for her. I’m just saying it, it will last for a while and it and it will go, and it’s it’s because there’s no utility to it, um.

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What, what is, um, what, what is an on an AG one, given the, well, first of all, how much is it value now at, uh, and then what is it, what’s the most likely exit for a company likethat?

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So it it hasn’t been valued in, in, uh, a bit of time. The last round, which was a couple of years ago, right, uh, led by Rick Gerson at at Alpha wave, um, was, was north of a billion dollars. I think it was $1.2 or $1.3 billion dollar valuation, and, and the business has, has grown exponentially since that time period. Uh, so, so we, we can all do the math, um.And and the the exit is um is anywhere from, from strategics who want to be in this space andOwn one of the largest, probably the largest independent direct consumer business, uh, today, if not only supplements in in all businesses independently, and umAnd now they’re also at at Costco, so now there’s a clear path to, to, um, large scale distribution at at retail. They’re having a really great experience in all 600, uh, domestic Costco stores so far. Um, and, and so they’ve gone from this single product business, just one powder that it was selling to multiple products with sleep coming out and new flavors coming out, uh, and multiple distribution points.I think that would be very appealing to many strategic investors. Uh, we can all guess, guess which ones, and, uh, and then of course the option is IPO. This is a business with significant scale, healthy margins, healthy IBETA, good predictability because of the, the D2C business, and, um, so we’ll see. Mhm.

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All right, I hang with this uh Jason Rigoff for a quick break. We’ll be right back on opening bid unfiltered.Welcome back to Opening bid Unfiltered here at the NASDAQ in Times Square. Having a great chat here with Jason Stein, co-founder and managing partner at SC Holdings, uh, really making some, uh, big investments in AG1, uh, Hyper price, and, and many other, many other names. Does the IPO still, is that still the end all be all, Jason? this is still have that level of excitement for the companies that you’re invested in, or are they inclined to stay private for longer?

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Uh, I, I don’t think the IPO is, is the, the all end all actually. I don’t think there are a lot of companies who should IPO. I think you have to be a very specific type of company.And, and you really need to be able to have meaningful scale as a business, you need to be able to be a multi-billion dollar company, at least, if, if not more with, with a clear path to consistent growth. Uh, you need to be profitable, especially in today’s market, and I, I think there’s, there aren’t a lot of companies who are going to be the next Pepsi or the next Facebook, um, or, or, or have, have a management team that that can weather the ups and downs of it, um.Like a Tesla and Elon Musk, and, and so, I, I definitely don’t think it’s the be all and end all. I think it’s an amazing outcome for the bright companies, uh, many tech-driven companies for sure.Uh, I, but, but I, I also don’t think it’s, it’s accurate to say that, uh, companies want to stay private longer. I think we, we’re starting to see a lot more activity pick up in the M&A space. Uh, we’re starting to see a lot of inbounds at our portfolio companies from strategic, uh, businesses and, uh, and strategic choirs, and I, I think.Just based on the data we’re seeing, I think we’re gonna see a lot of of M&A picking up in in from private companies. And I think these companies, a lot of them want, want to start seeing those exits, and the ones where we’ve been able to weather the, the storms of, of COVID and then the, the all the rise and the fall of the markets and now tariffs. I think there’s a lot of companies out there. If you’re still a healthy company through all through all of that and and you have growth and profitability, you’re, you’re probably looking for.Uh, for an outcome sooner than later.

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Are you nearing any, any deals for the company in your portfolio and how do you know the time is right?

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Um, there, there’s a, a mentor of mine, Luke Frankfurt, who was the longtime CEO of Coach.

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Oh, he, he was real good, he was one of the first, I used to be a stock analyst, Jason, he was one of the first people I talked to. So yeah, if you see Lou, tell him I said hi. it was

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fascinating. I actually just, I was just met with him last week and he has a new book coming out, you should have him on. Yeah.Call called Bagman, and I started reading the preview, but the first chapter is called Magic plus Logic. This is something he always talks about when I’m speaking to him, is, is you have to be really data driven and really focused on the numbers, but there’s also a magic to to great companies and great decision making, and I think that’s how you decide is, is.To have a combination of of both it’s an art and the science. And, and then there’s also just the reality of how long have your investors been in your business? How long are they willing to stay in your business? Do you have debt? Is it turning out? What, what, what does your capital sack look like? Are your uh employees eager to, to get liquidity and so there’s a million factors that that come into it, but, um.By getting invest in even in the public markets, when’s the right time to buy, when’s the right time to sell, uh, you, you don’t want to hold on to it too long and, and you don’t want to go too early, so you just got to find that window.

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Uh, you also invested in LeBron James’s and Maverick Carter’s, uh, Spring Hills. Um, what’s next? You know, as LeBron enters the next chapter of his, of his life, his business career, what are you thinking we might see from Spring Hill?

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Uh, yeah, so Spring Hill was, uh, really the first big investment that we made from SC Holdings, and, uh, we’ve been close partners with, with Maverick and LeBron ever since then and done, done a lot of other things with them. We acquired, uh, Canyon bicycles, the biggest direct consumer, uh, bicycle brand, uh, in the, in the world. Another form of innovation, certainly bikes have been around forever, butNobody was shipping a bike directly to your house, um, and doing it a large scale and generate meaningful profits, and, and Canyon has been doing that for a while, um.What’s next is, uh, I, I don’t know, LeBron’s one of the most talented people, uh, in the world that I’ve ever been around on and off the basketball court, um, that, that’s, that’s for him to decide. Um, I just try to, to find some, some great deals around that and his partner Maverick Carter, um, who, uh whoever with, you know, 99% of the time, uh, on that partnership and speak with every day asUm, is, is the ultimate entrepreneur. Spring Hill’s been very successful. They actually merged last year with Fullwell Entertainment, um, one of the, the largest and best producers of live entertainment in, in the world. Um, they were very involved in the Olympics last summer. Uh, they’ll be doing Olympics again in 2028. And, um, so I think Springo will continue to be super successful as, as part of Fuwell in in their new merge company, and, and I know for sure I will continue to be aA cutting edge entrepreneur and push the envelope and everything that he’s doing too. What

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makes them good at what they do in the world of business, having studied them up close and personal and talking to them.

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They’re very, very curious. Uh, Mav Mav in particular, uh, is constantly trying to learn new things, travel the world, meet new people, and absorb it all.Like a sponge and then and then act on it. But uh it’s I think it’s the it’s the constant curiosity that that they had and wanted to learn and want to get better at everything that they’re doing.

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If there’s another company in your portfolio, um, that’s about to hit it big, what is it and why?Or lesser lesser known outside of the athletic greens and and the high prices.

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Well, II would say 11 area that we’re very focused on right now is youth sports, and we’re just in the process of completing a new acquisition in this space, so I can’t say what it is yet, but, uh, there was recently an article in The New York Times talking about how youth sports is an asset class now it’s a $40 billion dollar industry.And I think we’re still at the very early stages of the professionalization of youth sports, and it’s to me, one of the best industries in the world because every kid should be playing sports. It’s the best thing you can do as a young person for not just physical wellness, but mental wellness as well, for, uh, for building confidence, for having purpose, for meeting new people, for, uh, experiencing diversity of people from all walks of life, uh, also perseverance and um.And, and, and work ethics. So it, it has such a positive impact on all of these people and umI, uh, I, I know firsthand, my, my son who’s 10, is, is very into the, to, uh.The youth basketball world. I actually just got back from Orlando for the AU World Championships, watching his 10 year old team, uh, play with the best team in the world, and umThere is a huge opportunity for continued professionalization of this space that that is is a $40 billion dollar industry, but has typically been very driven by uh small businesses, local businesses that um that that could benefit or want to benefit from uh a a more intricate and dedicated infrastructure and um take advantage of, of all these opportunities. So we’re gonna be going into that space. I, um, I will say that uh.Basketball is the number one.Uh, participation sport, youth sports for, for young people in the world. It, it’s, it’s in America, sorry. Um, it’s bigger than soccer, it’s bigger than baseball, almost 2x both outside, if you go outside America, soccer is the biggest, but in America it’s by far the biggest, uh, youth sport, and, um, that would be an area we, we’d be very interested in.

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Uh, you know, I remember, it’s amazing what kids have their disposal now in sports. I had a $25 bath from Sears and a $10 pair of cleats from Kmart. I, you know, we, I just didn’t have any of that.Um, growing up, but I would love to get

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played at the park, play basketball at the park. That’s how I learned how to play basketball. These kids today have, have dedicated trainers, personal trainers, group training. Um, the, the US system in basketball has learned a lot from the European system.Has produced all these amazing players where they actually practice 6 days a week and play games once a week in the US. They they practice once a week at, at, at these youth levels and, and play 8 games on the weekend, and you, you don’t get better at doing the latter. And so there’s a huge movement here, uh, for that, um.And uh and I, I think, again, you’ll start to see the professionization of youth sports become a, a huge topic. If if if college kids are getting paid to play sports millions of dollars a year.Why would we draw the line atCollege and my high school kids also be getting that. In, in Europe, if you’re a great basketball player, you start playing professionally as a as a teenager. You get to be part of an academy. Luca Adante was playing in Spain, uh, I think when he was 14 or 15 years old, with Rubio, all these guys are playing at a younger age and, and so.If these high school kids are huge, um, celebrities online for, for the younger generations, um, I can definitely see a world where there are, there is a professional high school basketball league that has a meteorites deal that has sponsorship deals where the kids are getting paid, um, and so, I mean, there’s a million directions we can go in.With this topic, but I think it’ll continue to be a very hot one in the US.

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Well, keep us posted when you announce that one, and Jason lasts, we always love to get a hot take from our guests. Uh, nothing planned. I’m just gonna pull it out of thin thin air here, um, just give your exposure a high price, uh, recovery products, uh, and of course.Invested interest in this. What’s next in that space? So I go to Hyper Race. I get something that goes over my knee. It cools my knee down, heats my knee up. I’ve got bands that go around my back. I’ve got massage guns. Like what’s the next holy grail product that will make me feel 22 again?

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Uh, I thinkThe, the next, well, so, so you have two questions. I think the next uh step for that space is the integration of these technologies into your everyday clothing. And you start to see it with Hyperri’s big partnership that they announced with Nike where they now have a sneaker that has their Normatech compression technology inside of the sneaker. These shoes

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have been blowing up my Instagram feed. I don’t know if, uh, clearly Insta know is what I’m searching for. I mean, they have my number. Yeah.

22:25 spk_1

If you haven’t tried them, I will send you a pair. They’re amazing. It’s basically like it’s just like getting a foot massage 24/7. Uh, they heat up, they massage your foot. So if you’ve just played sports and, and you’re, you’re sitting on the couch or on the bus on the way home from a game, if you’re an athlete, um, you put them on and they, they get you, uh, they’re great for recovery, great for a warm up. I think you’ll start to see more of that. I think if you look to Hyperri’s partnership with Nike, which has been a huge success.You can start to think about all the different technologies they have and all the ways it could be applied inside of clothing. Could it be in a running vest that you’re, you’re, you’re, you’re wearing, could it be in a hat, could it be in sandals, could it be in socks, could it be in in in your um, your compression shorts or your compression pants? I think you’ll start to see with with umThe way that with the smallest chips are getting and, and as this technology evolves more and more uh of of of these utilities and wearable clothing.In terms of of a technology that that is coming next in in the space, this is not new, but uh if you’re not cold plunging, I think you got to start doing it. um You’re

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playing, right? I’m I’m, I’m eyeing a cold plunge, Jason. I, this is, it has to happen. They’re a little expensive, they’re like 6 grand, so, you know, I’m not exactly made of money, but, you know, I, I might have to pull the trigger as a treat for myself.

23:44 spk_1

The way I got started doing it is, is buying a bag of ice for 499 at the deli down the street in Brooklyn and throw it in my, my, uh, my bathtub. So there are inexpensive ways to get addicted to this habit, but man, once you jump in there, your dopamine boost, uh, it’s hard to, uh, to not feel good and have a good day after that. So I would, I would push hard for that if you’re not doing it yet.

24:06 spk_0

All right, fair enough. We’ll leave it there. Uh, really enjoyed this conversation. Jason Stein, co-founder and managing partner at SC Holdings. We’ll talk to you soon.

24:13 spk_1

Thanks Brian. Appreciate

24:14 spk_0

it. OK. All right, that’s it for the latest episode of Opening Bid Unfiltered. Continuing hit us with all those thumbs up on YouTube. Love all the feedback. It makes me a better interviewer, and I just love learning from you all. Also continue to enjoy, uh, opening bid unfiltered and all the podcast platforms. We’ll talk to you soon.