How to score $200M: Angel City’s playbook for women’s soccer

0:00Scaling a business in the US can feel like a maze. Each state has its own payroll, benefits, and compliance rules, pulling your focus away from growth, which is why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert, plus Fortune 500-level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one. So, if you're scaling, make it simple with Deal. Go to deel.com. slash MOS and get up to three months free. If you're in private capital, you understand that your next great deal starts with who you know.

0:41That's why over 3 ,000 firms trust Affinity, the CRM platform purpose-built for private capital. Affinity's relationship intelligence reveals your team's strongest paths to founders, investors, and decision makers using insights It's hidden in emails, calendars, and meetings. With powerful AI tools like Affinity NoteTaker and Deal Assist, you'll spend less time managing data and more time closing the right deals. Learn more at affinity.co slash marketplace. Hi, listeners. It's Reed. One of the things I love about Master's Scale is learning about business sectors I'm less familiar with. And if you know anything about me, You know that sports is one of those areas.

1:29But I know how to spot a wave. When I see valuations climbing as much as 60-fold in just four years, I pay attention. That's what's been happening in women's sports specifically. And that's why I'm so eager for you to dive into this up-close look at an amazing story of scale rooted in women's soccer.

1:57We are at BMO Stadium for the Angel City home opener. It is a sellout crowd. It is a gorgeous, perfect Los Angeles day. This is the single best in-venue sports experience in Los Angeles. This is as good as it gets. A-C! A-C! A-C! A-C! Since day one, I've been coming. My parents and I bought season tickets, and it's so pro-women, you know, and I love seeing the dads and daughters. I love seeing all the Hollywood, right, the hype of, oh, my gosh, I might see someone really cool, and you feel instantly, like I'm instantly happy at every game. Oh, my name's Jason Sudeikis. I brought Otis. That's my son, Otis.

2:42I brought my daughter, Daisy, and my buddy, Chip. All the fans that have been here and supporting bought season tickets since the get-go and everybody that helped me create this environment. I'm lucky to be here and this is my first one.

2:59I'm a soccer player myself. I play the 10, the attacking centre mid. I wanted to see the girls I look up to, the girls who I consider some of my mentors. And it's just a really fun experience.

3:15It's competitive, yes, but this is probably the nicest, cleanest, happiest sporting event I've ever attended. It feels like it's a mission and a community, and the fan base is just so viral and intense. It's just nice to be with them.

3:35When this team was founded, NWSL franchises were going for just a few million dollars. We just had our first nine-figure sale, and the valuation of Angel City is starting to reach the levels we're seeing in American men's soccer. You've never seen anything like this in women's sports in America.

4:03You've got to have incredible talent at every position. It's like this huge push. There are fires burning when you're going home. Can you believe it? Such an idiot. And then you go back to, this is totally going to be amazing. There are so many easy wins. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. Working out of a free bed of a party. Stuff that just seems absolutely nut balls. Ten years later, we're like, well, that's just how you do it. We haven't made it just how you do it. This is Masters of Scale.

4:41I'm Jeff Berman, your host. People who know me know I'm a huge sports fan. So much so that I've worked for the National Football League and helped launch a company called Together, focused on elevating stories about women's sports. I've been incredibly fortunate to attend a massive range of ridiculously exciting sporting events, including for all of the major sports teams in LA. So I feel especially qualified to share with you that nothing compares to the atmosphere to match for Angel City Football Club at BMO Stadium. It's a young team with magnetic energy. And I tell everyone who visits Los Angeles that going to a game is an absolute must.

5:19The atmosphere is no accident. It's a key part of the team's incredible journey to scale. Since its founding just four years ago, the Angel City Football Club has become one of the fastest growing sports franchises in American history. In this episode, you'll hear how it was done with two of Angel City's co-founders, Cara Nortman and Julie Ehrman. Cara comes from Venture Capital, and she's been key in making Los Angeles a VC hub through firms like Upfront Ventures and her new fund, Monarch Collective. Julie is a longtime executive and founder of the gaming company, Ouya. Julie and Cara launched ACFC with actor and activist Natalie Portman.

6:00It's been said that those who dream most do most. That is absolutely the case with Cara, Julie, and Natalie. They embarked on this mission with a clear and big set of goals. One, to show that women's sports are not a charity or a cause, but a real valuable business. Two, to drive gender equity through women earning what they're worth in getting recognition at least on par with men's talent. And three, to create a killer brand that's also a platform for community and social good. As Angel City rockets toward a$200 million valuation, far higher than any other women's sports franchise in American history, it is a case study in using the outsider's advantage to tap an underserved market and how to use that fresh perspective to innovate and thrive like a soccer team in perfect sync.

6:52The story starts with Karen Ortman, wowed by the best players in the world. So in 2015, I went to the Women's World Cup Finals with my three daughters, my husband and my parents. Here in Vancouver, we have a repeat of the final from four years ago. We sat in the stadium, and the way I described it is, as a 39-year-old working mom of three, I was just like so excited watching Carly Lloyd score. And here they come again, the long-range effort from Lloyd! Oh my goodness! And I felt 12 again. You know, it felt joyful. I think I was sort of came alive in a way sometimes we lose when we're just trying to keep all the balls in the air.

7:33It's a hat trick. And so, you know, what do you want to do when you have joy in America? You want to buy stuff. And I went to Nine Stories to buy a jersey for one of my daughters. Couldn't find any. Started with, why won't anyone take my money? Right? I'm curious, how do you make the leap from that spark and that joy and that frustration about not being able to find the kit for your kid or for yourself to actually deciding you're going to go on this adventure of building a club? It really was a process of this curiosity journey of asking people, I don't understand, am I the only person who wants to watch women play football more than every four years?

8:10And a lot of people said, yes, literally, Carrie, you're the only person. Everybody else just wants to watch it at the World Cup and maybe the Olympics and then and then not after. And it just instinctually, it didn't feel right. And I would say I had this instinct of like, there's something wrong here. I love Kara's framing of a curiosity journey. She identified a gap in the market sparked by a personal desire. So she went out and asked questions. The people she asked did not confirm her hunch. In fact, they shut her down. But Kara struck a key balance, one that's part of how many great ideas take shape.

8:45She kept following her instincts. Kara discovered that two U.S. professional women's soccer leagues had failed. The WUSA and WPS formed and then disbanded after just a few seasons. Basically, they ran out of money. In 2012, a new league started, the National Women's Soccer League, or NWSL. U.S. women's soccer is known as world-class, with the U.S. women's national team globally dominant for decades. And those players joined NWSL teams. But the machinery to make the league feel big time wasn't there. Games weren't broadcast live on any major network or streamer. Sports media didn't give it much attention.

9:27No major sponsors signed on. But this all just grew the fire that was lit for Kara. She saw the lack of investment as connected to overall gaps in gender equity. This was on her mind as a member of Time's Up, an organization created to help victims of sexual harassment. The Time's Up Summit in 2018 brought together women across entertainment, business, and more. It was a seminal moment for Kara. I was on stage and at the end I said, this is an incredible group of women here. Our job is to make this room bigger and bring new people in every day. But while you're here, go up to someone in another industry who you're interested in getting to know, who you'll probably never do business with.

10:06Give them your number and go have a meal. And if they're weird, block them. Natalie Portman came up to me. She said, would you mind if I gave you my number? And I didn't have to think very hard. Right, that's kind of an intelligence test. Queen of Star Wars says, I'd like to give you my number. And anyway, and she literally put her name on my phone as Natalie P. And when we finally had a meal, we talked about just everything you can imagine in the world. In the last 20 minutes, we talked about soccer. And she said, how can I help? And that's when Natalie and I really built a friendship. While not a lifelong fan herself, Natalie saw the power of soccer through her husband and kids, who were as likely to wear the jersey of men's star Lionel Messi as women's star Megan Rapinoe.

10:49Cara's and Natalie's friendship grew, as did their frustration. It led them to a bold idea, create a new team. This was in 2019, when neither Cara nor Natalie could devote themselves to this project full-time. They needed someone dedicated to the effort, someone to treat it like the startup it was going to be. And Cara knew just the person, Julie Ehrman. Their history went all the way back to high school when they played on rival basketball teams. And they played pickup basketball as adults too. Here's Julie. You know, Cara and I aren't the only venture and tech people in LA. It turns out there's a lot of women in our industry that grew up playing basketball.

11:27And we have a very good friend who runs the Wild Feminists Who Tech Basketball League. On August 19th of 2019, Monday evening, there was a match. I call everything match now. There was a game and basketball is referred to as a game. There was a game and I was very sweaty. Yes, there was some bloody noses, if I recall. When you get older, the elbows start to go everywhere and it's dangerous. We will not tell you who is a hack. Kara was just back from her second Women's World Cup, this time in France, where the U.S. Women's National Team won yet again. And when we were leaving, Karen and I were walking away from the court to our cars and she said, Julie, Natalie Portman and I are thinking about bringing a women's football team to L.A.

12:11You're an entrepreneur. You're not building. Do you have any bandwidth to research this? And I'll introduce you to everybody I've talked to. And then you can see if there's a there there. And I looked at her and I said. You said Natalie Portman? No, I did not say hell yes. Hell yes rather than like the third or fourth thing. First, it was like the Natalie Portman. And she said yes. And I said, OK. And then I said, wait, there's women's professional soccer in the United States. Like Kara, who didn't find out about the National Women's Soccer League until after her first World Cup, Julie hadn't heard of the NWSL either.

12:46In fact, Julie hadn't spent much time around soccer, even though she's a huge sports fan. Kara wanted her as part of the Angel City founding team. And she thought the way in was giving Julie a taste of the experience. I do remember that first conversation a little differently, but. How so? Wait, how so? I want to hear it. How so? I knew it was a little bit of a hard sell to get somebody of Julie's talent to want to run a non-existent women's soccer team, you know? So I said to her, I was like, hey, we have this crazy idea. I've been working on it for a while and I think it's just about to become real.

13:22But if it becomes real, we need someone to run it. And I said, I'm going to a game with Natalie Portman. I'm going to this El Trafico game with Natalie Portman. I have some extra tickets. El Trafico is the big men's soccer game in LA. A match between crosstown rivals, the LA Galaxy and the Los Angeles Football Club or LAFC. It's a huge draw and a lot of fun. You get Julie into a live stadium. That's like, I just knew it was going to be a lot easier after she saw that. I'd never been to a soccer match before in my life, and I was blown away by what the LAFC fans created. I've been to national championship games.

14:04I've watched SEC football games. Like, I know what fandom looks like, and soccer fans are different. The fandom around soccer is so special. And then again, the idea that, God, if we could build this for women's football, we're going to change the game. This is a terrific example of landing a pitch by showing, not telling. Cara and Natalie Portman could have tried to sell Julie on their idea with data that LA has a huge soccer fan base or that ticket sales would be this big or that big. But showing her the fans' passion and the crowd of all genders and generations and ethnicities and races was much more powerful.

14:40Even though the NWSL didn't have the profile of the NBA or even the WNBA. It wasn't like you could just snap your fingers and get a team. Julie, Cara, and Natalie would have to raise millions of dollars up front. And you can't just buy your way in. Like any pro sports league, all the NWSL owners had to agree to let the league expand to Los Angeles, along with approving the ownership group. And the LA team would need local agreements, like with a stadium in which to play their games. So Julie, you've been an entrepreneur, you've started companies, And if you're starting a tech company, it's a pretty straightforward process, right?

15:16You're going to incorporate. You're going to probably raise a little bit of money from friends and family and get going and try to find a proof of concept as a product market fit. If you're starting a professional soccer team, the process is not quite that simple. Yeah, it's very different. The irony is the building of a sports team is a lot easier than the building of a technology team. because when most businesses are built on the internet and everybody can be your competitor, everybody is your competitor. So they're not willing to open up their playbook, explain their cost of acquisition or their churn or their lifetime value or how they retain customers.

15:51That is their secret sauce. And what's so unique about sports in the most fundamental way is that it's a local business. So if I'm buying a ticket to an Angel City football match, I'm probably not buying a ticket to see Washington Spirit play. So we can share information in a very different way and apply it to our market in a way that's more authentic where we're not competing. Unlike her tech endeavors, Julie wasn't creating something entirely from scratch. She was bringing an existing product to a new market. And while they are obviously competitors on the pitch, the franchise owners all benefit from a new team's success, making the league more powerful, more popular and more valuable.

16:35Julie wanted to start a team in a way that women's sports had never seen before. So the first thing that I did was start to research, like, who are the best sports teams in the world and what makes them the best in the world and who in my network has relationships with people in sports? the first thing that I learned which was actually fascinating was that 90 percent of all sports teams don't make money because they're toys for wealthy people effectively vanity projects you know their salary cap far exceeds whatever they could generate in revenue from a local business right ticket sales sponsorship merchandise concessions yeah and so that was really fascinating and then I started to research well how do you make money owning sports because I I don't want to build a business that I can't make money in.

17:22That's not part of my DNA. This is Kara. You know, so many people would tell you why it didn't work. And just sort of getting to the, what's the one thing you need to get right? Like, what's the one assumption? What's the one thing? Butts and seeds. And in a weird way, it's sort of like super simple. The whole model worked if you could get 9 ,000 or 10 ,000 people to show up 12 times a year. And I'm like, this is a city of 15 million people, where if you can do something entertaining once, people, like if they love it and they feel a part of it, they'll come back, they'll come back, they'll come back.

17:54But even their innovative plan for profits didn't land with the investors they first approached. We had a lot more barriers walking in the door to begin with. First, you had three female founders that had no experience in sports. I mean, that was a huge impediment when we walked in the door. And then it wasn't just about building a women's football club. I was focused on, I want to build a business that makes money. If I want to change the narrative around women's sports to say that it's investable and there's growth opportunity, there's huge value. I have to show that I'm better than 90 percent of the teams that we all take for granted.

18:24I think it's really important that people know that Natalie was in the room with us pitching. This was not a project and name only for celebrities, which I think is a lot of celebrities get the rub for. But Natalie was really invested and involved in this from day one. When we would talk about the experience of Angel City, Natalie would talk about how she wanted to recreate the Showtime era of the 1980 Lakers, where you were coming to a game either to see Magic Johnson or to see who Jack Nicholson brought courtside. That was the vibe that we were going for. So we were going to invest in the experience.

18:56We got over 99 no's and it was from everything from there's 11 professional sports teams in LA, there's the beach, there's the mountains. Women's sports isn't investable. Women's sports has no growth. People aren't going to show up. Is this a charity or is this a business? We had hilarious meetings with very famous people who said things like, you should get some wealthy person's child who's lost in life to do this. And then the more reasonable knows were like, what do you know about sports? Like, that's fair. Like, I'll give them to that was fair. But I think the challenge that we ran into often was that we really were pitching a different type of company.

19:33We wanted to build a company where mission and capital could coexist, where we wanted to have a positive impact in the community while we were building a women's professional team. And we were going to invest in that team. And after the 99 notes, we had a phone call and you said, if we can't figure this out, like, I don't know how much more we can go at this. If you've ever tried to sell anything in your life, you know how discouraging it is to hear nothing but no after no after no. but it can also offer the wake-up call you need. If something isn't working, you have to be honest with yourself and your team.

20:08Maybe it's something to pitch or maybe it's pitching to the wrong people. After the break, Cara and Julie tell us about the pivot that turned everything around for Angel City.

20:24Real leaders don't back down when the stakes are high. They innovate, they push forward and then they take the stage at the Masters of Scale Summit. Join us in San Francisco, October 7th to 9th, to hear from the CEO of the New York Times, scientists using cutting-edge technology to find cures, the leader of crypto powerhouse Coinbase, a retired four-star general, and many, many more. Apply now at mastersofscale.com slash apply25. That's mastersofscale.com slash apply25. If you're ready to take your startup from idea to impact, then AWS is your launchpad. From data storage to machine learning to secure app hosting, AWS gives you the tech trusted by the world's fastest scaling startups.

21:13And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500-level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

21:57So if you're scaling, make it simple with Deal. Go to deel.com slash MOS and get up to three months free. We're back with the story of Angel City Football Club on Masters of Scale. You can watch the entire interview on the Masters of Scale YouTube channel, along with more from our full catalog. 99 investors rejected the idea of the founding trio of Kara Nortman, Julie Ehrman, and Natalie Portman. And they were faced with a decision. Abandon their vision or keep at it. Julie had been pitching investors on the logic of the business plan and the broader market for women's soccer. And it just wasn't working.

22:40Here's Julie again. It was sort of that epiphany that we're not going to the right people. We're not going to the people who understand that we're truly building a platform for equity and impact. And we're going to use that platform to drive towards equity using sports. And then Natalie said, well, why don't I do she to Eva? Like, she loves sports. She's a fan. She's a friend. Why don't you pitch her? Eva is Eva Longoria, the world famous actress and producer. It was a very different pitch to a very different investor than the team had met with before. That was an incredible pitch. So Eva was on the line with her business manager.

23:16So I do the spiel and I talk a lot about the fact that we want to build a platform. And when I was done talking, I think the first thing she said was, I'm in. Wow. You got the yes in the room. It was the first yes we got. And I said, what do you mean? Why? Why are you in? And she goes, I get it. She goes, I'm a platform. I use my platform to push for social causes that I care about. And also my latest movie or television show or directorial debut. Like, I understand the power of a platform. And I think what you're doing is incredible. And I think this would be amazing for women's sports. And if we can use sports to change the narrative and drive to equity, she's like, I'm all in.

23:54And not only was it the first yes, but it was the largest check we got until we raised our Series A. By asking why she said yes, Julie unlocked a new perspective on what investors like Eva valued. She saw the social impact of the business, transforming the narrative around women's sports as driving its market value. They'd flip the pitch to lead with gender equity, using women's soccer as the vehicle. That sparked momentum. So our second yes then was from Alexis Ohanian. and he put both himself in personally and his fund. He's better known as Serena Williams' husband, by the way. And I think actually alongside Eva coming in, Rhea Jessica Chastain and Uzo and Jennifer Garner and Lilly Singh and Abby Wambach and Glennon Doyle and Billie Jean King and Lindsey Vonn.