Earlier this month, a press release announced a $25 million structured fund called Chisos Golf, focused on staking aspiring professional golfers – a staggering number that raised eyebrows, and heightened some suspicions. Given the numerous stories of less-than-scrupulous agents, heavy-handed funding and charlatans that surround the developmental golf world, the skepticism is understandable.
Chisos Golf makes their value proposition very clear in the press release:
Chisos Golf is built on a direct thesis: a meaningful number of elite players are constrained by capital, not talent. The fund is designed to finance players earlier, extend their competitive runway, and create aligned exposure to the earnings potential of emerging golf talent.
A valid thesis and one that has been echoed often. A full season of battling through the developmental tour ranks and entering qualifying schools can cost around $70,000. For those investing in performance coaches and professional caddies, the cost can be significantly higher. Some pros are supported by family and friends. Others attract sponsors and managers during promising college careers. But many more require creative fundraising solutions or formal financial backing to chase their dreams. That’s where Chisos comes in.
You might be wondering: is this legit? Who’s behind it? How does this work and what makes it different? You might also wonder what even is a Chisos? (It’s a mountain range in Texas.)
Who Are These People?
Will Stringer is a Texas native who attended the University of Texas at Austin before embarking on a career investing with the well-known and respected Cockrell Family Office in Houston. After almost five years, Stringer found himself longing for a career that focused more on early-stage investments and start-ups.
“I wanted to invest in cool people doing cool things,” Stringer shared. “But that’s a great way to lose a lot of money. So, to prevent that, I went back to my structuring roots from the (Cockrell) family office and essentially designed a contract to invest in people at the early stages of their career as founders.”
Chisos Capital was launched in 2019 and Stringer has subsequently invested in over 100 founders, entrepreneurs, athletes and creators since its inception. All of this to say, Chisos Golf will not be this Texan’s first rodeo, and they have already begun investing in a golfer in the fund’s first month.
What Does Chisos Golf Do?
Chisos Golf is looking to partner and invest in select professional golfers and golf content creators, providing capital at the early stages of their careers. Apart from the capital investment, they also aim to support players through an advisory board that includes sports psychologists, coaches and even brand builders. The goal is to provide more than just money with a comprehensive developmental plan for their asset, the golfer.
How Does Chisos Golf Differentiate?
This is not pseudo-crowd funding; this is an investment vehicle that gives a well-heeled individual a chance to put six-figures into a new and potentially entertaining asset class.
You can’t watch a real estate investment try and make a cut.
You can, however, watch a golfer and shout “that’s one of our guys!”
How Does Chisos Work?
Staking the careers of professional golfers has always been risky, but the structure of a Chisos contract aims to limit the risk through a data-driven process, and also by taking non-golf earnings into account.
Another protection is that the money is not all given at once. Players work with Chisos on schedule and build a budget that supports it financially over the early stages of the contract. As for the payback, Chisos Golf typically negotiates 4–10-year terms and a 10-15% payment arrangement based on the length of contract and the player’s situation.
The final investment protection comes if a player decides to quit playing professionally during their contract. If a pro decides golf isn’t for them during the length of the contract – say, they hang up the clubs to sell insurance – they are still responsible for paying back the initial investment once they cross certain salary thresholds, staying within the timeframe of their contract.
The following examples provide some insight as to what future Chisos Golf investments might look like. (Note: these are all fictional players.)
Doug Wilson is a three-time runner-up on the Korn Ferry Tour. At 33 years old, he still feels like he’s got a shot to make the big time. Doug applies for money, and Chisos Golf invests $70,000 with Doug over a three-year contract. The $70,000 is exhausted in the first two years, and Doug wins a total of $40,000 in the third year. Doug would pay Chisos 10% of the earnings, $4,000. The contract ends after three years.
Net Result: Doug paid $4,000 and Chisos Golf is out $66,000.
Wilder Mattsson has just graduated from Rice University. After a promising collegiate career Wilder decides to turn professional and applies for capital through Chisos. Chisos Golf decides to invest $150,000 in Wilder with an eight-year contract. The $150,000 is paid out to Wilder over the first three years.
Wilder does not make a dime in those first three years, decides to quit professional golf and pursues a career selling surgical devices, where he makes a healthy living. He pays back Chisos Golf at 10% of his income, but only once his salary reaches a predetermined floor, say $75,000 annually.
Net Result: Wilder got the capital to chase his dream and paid back Chisos the $150,000 before his contract ended with non-golf earnings from his post-golf career. Chisos breaks even on Wilder.
Carmen Valdez-Pelayo from Spain is a solid player on the University of Miami women’s golf roster. She has a stroke average of 76.5 but no real chance to play professionally. However, she loves making content and has a burgeoning YouTube channel where she plays golf with various Spanish soccer players.
Carmen applies for capital to expand her channel’s reach and production quality. Chisos Capital enters a four-year, $100,000 contract with Carmen. Within two years, Carmen builds a popular YouTube channel and is making $2 million a year off her collective social platforms. Over the term of the contract, Carmen makes just over $6 million dollars off the course.
Net Result: Carmen pays Chisos $600,000 for their $100,000 investment.
Ken Briffin is working as a mortgage broker but feels like he might have let go of his dream a little early. The Chisos qualitative analysis process agrees, and invests $150,000 over four-years with Ken.
The entire $150,000 is spent in the first two years as Ken takes a run at Q-School, qualifies, and plays the next season on the Korn Ferry Tour, winning just under $300,000 in prize money. Briffin graduates to the PGA Tour, wins three tournaments and $12 million. He also makes the Ryder Cup and signs a 10-year, $20 million dollar deal with Maxfli in which he makes $2 million a year.
In the final and fourth year of his Chisos contract, Ken wins another $13 million. Over the life of his Chisos contract, Ken wins $26 million dollars on the course, and $4 million in endorsements for a total of $30 million.
Net Result: Ken pays Chisos 10% of the $30 million – $3 million for Chisos. (Note: Since his Maxfli contract is paid out over ten years, Chisos only gets 10% of the first two years, Ken keeps all the income from years outside the Chisos contract.)
Will This Work?
Who’s to say if this model will work in golf, especially given the current landscape of PGA Tour scarcity. With fewer Monday qualifiers, the emergence of PGA Tour U and no Saudi-funded shotguns, the prospects of making it from a mini-tour to the big time aren’t what they were a few short years ago.
We do know that Chisos Capital is currently partnering with 110 creatives, founders, and athletes in other endeavors and sports – so there is something there. We just don’t know how it will pan out. That said, trust me when I tell you there are thousands of golf-crazed people worth tens of millions of dollars who wouldn’t mind throwing a couple hundred thousand at an idea they like the sound of.
Given that institutional money from venture capitalists and private equity firms have tainted everything from Little League baseball to neighborhood dry cleaners, it’s no surprise to me that most people I’ve talked to about this view it skeptically.
“Not everything needs to be institutionalized,” a friend of mine said. He’s definitely not wrong but in the case of Chisos, we don’t yet know who’s right. We’d all do well to remember that former Microsoft CEO Steve Ballmer doubted and laughed at the iPhone.
Most PGA Tour winners were doubted along the way, and many “can’t miss” players never made it. But aspiring pro golfers bet on themselves every day.
Now, for some of them, someone’s finally betting on them.
