Kate del Castillo

Betting on an audience, not a sport

Combate Americas was built around a specific commercial thesis: that Hispanic audiences in the United States and Latin America were underserved by existing mixed-martial-arts promotions, and that a promotion designed for them from the start could capture attention that the incumbents were not competing for.

Sports promotions are unusual businesses. They do not primarily sell tickets; they sell broadcast and streaming rights, sponsorship and increasingly their own subscription products, which makes them closer to media companies than to sports clubs. Their value therefore rests on owning an audience that a distributor wants to reach — which is exactly why an investor whose own career is built on that audience is a coherent participant rather than a decorative one.

What a Series B implies

The US$20 million round announced in April 2019 was a Series B, which places the company several stages past its first outside capital. By that point a business has usually proven that customers exist and is raising to grow faster — a materially later and better-evidenced bet than the seed rounds elsewhere in this collection.

The trade-off is price. Later rounds are priced higher precisely because more is known, so a Series B investor takes less risk per dollar and less upside per dollar than someone who was there at the start. Neither position is superior; they are different products. Reading "invested in" without knowing the round tells you remarkably little about what someone actually took on.

If this made the sector interesting rather than the celebrity, start with how to begin investing — and, if private companies are what caught your eye, how angel investing actually works.