Competitive gaming has a significant share in the gaming industry. Currently, it is a market force that’s driving the industry to success. However, such a force can’t have a significant impact without investors. Thankfully, thousands of investors are willing to invest in such a sector.
Some of these investors are fans of the countless esports teams that exist, with some having revenues above $20 million, such as Team SoloMid. With this in mind, it seems that esports teams can be a profitable investment. If you’re planning to make such an investment, here are some ways you can invest in your favorite esports team.
How to Invest in an Esports Team
If you’re someone who wants to have a share in specific esports teams or have multiple shares from different esports teams, then indirect investments are for you. Indirect investments mean that you’re putting money into one particular team, but you don’t necessarily know where it will go. There are two common forms of indirect investments: mutual funds and direct stocks.
If you’re acquainted with the business world, you know the nature of mutual funds and direct stocks. However, if you’re not aware, we will go through each one of them.
Mutual funds are funds that companies pool from investors. In this case, the company is the esports team. Essentially, the team can then use the funds to invest in all sorts of things such as player training, equipment, tickets to games, and more. This is the most convenient way for local teams to get the investment they need because, unlike direct stocks, they don’t need to register with a stock exchange.
If you want to fund a local team, or a team that’s still on the verge of growing, then this is your best option. It’s simple and easy to do.
For teams with a more prominent presence in the scene or millions in funding, you might have to purchase shares from the team that’s traded in a stock exchange. Many stock exchanges sell shares from different esports teams. However, be careful in investing in such shares though because, unlike blue-chip stocks, esports teams’ shares fluctuate aggressively. If you want a safer investment, invest in an ETF fund instead.
Exchange-Traded Fund (ETF)
ETFs are passively managed funds that are sold in the stock market. They follow a specific market index, which means there is a limit on how many people can invest in esports ETFs. It’s a safer bet because instead of investing in one or two direct shares from esports teams, you’re investing in multiple shares. One well-known gaming ETF is the Nerd ETF. This ETF is known to have shares on multiple streamers, gaming influencers, and esports teams.
Are the indirect options not working out for you? If you want to have a more hands-on approach with your investments in your favorite esports team, then a more direct approach could suit you better.
Offer to Be an Investor
Many of these esports teams require the necessary funding for gaming equipment. Equipment such as gaming PC builds is essential to their players’ training and overall performance. Without funding for such equipment, specific esports teams can easily fall behind against well-funded competitors. You can be an investor by giving the necessary funding to your favorite team or donating the equipment they need to compete.
Unlike mutual funds, you’re the one directing where your investments will go. For example, if you think that your money is better used for improving the team’s training regiment, then that’s where your funds will go. The team can then pay you back with a fixed interest after a couple of months. The agreement of such an investment is up to you and the team.
Many big esports teams have multiple shareholders. Essentially, purchasing a direct stock from them makes you a shareholder. However, you’re part of the minority. Becoming a majority shareholder is what you should aim for if you want a more hands-on approach with your investments. This requires a decent amount of money, so you should probably save up for it.
Start an Esports Team
Lastly, what’s a better way to take charge than starting your own esports team? You’ll have control over everything. The roster, funding, and equipment are right in your hands. We don’t have to tell you that this is a very costly investment, but it is also the most rewarding.
Now that you know the various ways you can invest money into esports teams, it’s time to take your money and start investing! However, do your research beforehand as to which teams you should invest in because that will determine your investment’s success.