WHEN: Today, Thursday, September 19, 2019
WHERE: CNBC’s “Squawk on the Street”
The following is the unofficial transcript of a CNBC interview with former NBA star Kobe Bryant on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Thursday, September 19th. The following is a link to video from the interview on CNBC.com: https://www.cnbc.com/video/2019/09/19/kobe-bryant-and-jeff-stibel-on-the-growth-of-their-venture-capital-fund.html.
All references must be sourced to CNBC.
CARL QUINTANILLA: Three years ago, basketball legend Kobe Bryant and entrepreneur Jeff Stibel joined us here at Post 9 to officially announce the launch of their partnership fund. Bryant joins us this morning in a CNBC exclusive to discuss how the fund has grown. Guys, welcome back. It’s great to have you.
JEFF STIBEL: Thank you, Carl.
QUINTANILLA: Remember, you think you sat on this side last time as I recall, it was pretty memorable. What has surprised you? What’s impressed you about it since that day?
KOBE BRYANT: Well, I mean we continue to grow. We continue to make smart decisions, make smart investments across the technology, media and data space. It’s been a heck of an opportunity. We’ve had a great time with our entrepreneurs, building our relationships with our investors and here we are today.
QUINTANILLA: You’ve got how many active in the portfolio right now? 18?
STIBEL: We’ve got 18 active. We’ve had about 10 exits. It’s been incredibly successful. We watched the fund grow from about $100 million in access to capital to now over $2 billion. It’s exciting.
QUINTANILLA: I read somewhere of some of the ones that have gone public. Dell, right?
QUINTANILLA: National Vision?
STIBEL: That’s exactly right.
QUINTANILLA: How many more can you build, in terms of exits?
STIBEL: I think it’s unlimited. As long as there are great entrepreneurs and great CEOs, we’re gonna keep seeing more and more go public, or sell to other great companies.
QUINTANILLA: What’s your assessment of the IPO window right now?
STIBEL: Look, it’s wide open. There are some exciting companies coming out. It’s just matching value to price. We hope it holds, we’re pretty excited of what we see.
QUINTANILLA: In terms of characteristics of the companies, the leaders you are looking at, what do they have in common?
BRYANT: Well, you got to have strong entrepreneurs. That’s really the key for us, is looking at the people. Yes, it’s important to see those returns, but it’s also important to have great opportunity, great relationships with our investors, great opportunities with our entrepreneurs to help them grow and put them in situations where they can be successful.
QUINTANILLA: What I love is that you kept Kobe’s name not out of it. It was not public for a while, when this thing was already in motion.
BRYANT: We have been working together for how long now?
STIBEL: Seven, eight years?
BRYANT: Seven years.
STIBEL: The point, it’s not about us. It’s about the teams that are being built. The entrepreneurs, it’s the companies. We want to do our part, we want to help where we can we, but we want to be behind the scenes. We want to be helping people.
BRYANT: Also, to attach a name to it immediately comes with a certain stigma. It’s important that we lay the groundwork early, behind the scenes. This way, you establish validity and credibility within the industry. It’s very important.
QUINTANILLA: Right, but then what did your rolodex bring to it later? I read you brought in Peyton Manning, Steph Curry, some others in this space I imagine.
BRYANT: What I’m trying to do is just simply help athletes grow and grow their value. For us as athletes, it’s very difficult when you retire. You step away from the game, you know, because it’s been such a liquid business for us, how do you build value post-retirement, post-career? What do you do? I’m just trying to give opportunities to some of these other guys and vice-versa.
QUINTANILLA: Is that a significant part of your client base is athletes or to what degree does that drive the vision of the fund?
STIBEL: Look, both athletes and entrepreneurs. When you think about this, we all have something we’re really good at. People assume that means that you are good at everything. It’s not necessarily true. So whether you are building a sports franchise or you’re building a business, it doesn’t mean you know how or where to invest your money. We want to make sure that we are giving back to the communities that were so great to us.
QUINTANILLA: One thing I’m curious about Kobe is so many companies, namely in sports – Nike’s a good example – are having to make political decisions. Do you side with Kaepernick or do you not?
QUINTANILLA: How does that complicate decisions you have to make and why has Nike been pretty decisive on this one?
BRYANT: It doesn’t. It doesn’t complicate it. Nike’s mission is a very simple one. Ever since Phil Knight started the company, the mandate was to listen to the voice of the athlete. So it’s bigger than Nike. Nike’s core value is the athlete, itself. You have to stand by what the athlete believes in. If this is what the athlete believes in, this is what you support. So it doesn’t complicate things much at all. You’ve got to stick to what you believe is right.
QUINTANILLA: I think Jim’s got a question in midtown. Jim?
JIM CRAMER: Congratulation on your success, gentleman. Kobe, I wanted to ask you, you seem to have gotten wired to what I think is the most successful area of business right now, which is gaming, Fortnite. Do you see a nation that will have gaming parlors everywhere, where kids are going to be trying to get NCAA scholarships for something that’s gonna be our national pastime?
BRYANT: I’m having a hard time hearing him.
STIBEL: Yeah, I think I caught Jim’s question. Look, gaming is critically important to I think the cultural ethos and for what we see, it’s not just about the games that we’re looking at investing in. Frankly, what we are actually trying to invest in are the platforms. Fortnite is owned by Epic and their Epic engine is building hundreds of games for both themselves and for their businesses that are using it. Scopely is another one, you see their Star Trek game which has been a huge hit. But behind that is the revenue engine and they’ve done that for both other games that they own, but gaming in general. That’s what we’re really looking for, the fundamentals behind what everyone is seeing on the consumer side.
CRAMER: Kobe, the Cholula hot sauce. I remember when Frank’s got a gigantic bid, I mean really unbelievable from McCormick. Some people say Cholula will be big. I know there are a lot of athletes involved with this one. But I question how fast is it growing? Could it be a home run that you could ultimately flip to a giant consumer package goods company or is it one of those that you just want to grow yourself?
BRYANT: No, well, ultimately, we want to be able to grow, but I think we have to be patient about it too, right? Especially for us athletes, my biggest concern, my biggest fear for athletes getting into the investment game is that we’re looking for unicorns all the time, for homeruns all the time. It’s important to be patient and make smart decisions and invest things you understand, things you can get your arms around, things that you can help grow and take it from there
STIBEL: Maura is an exceptional CEO and as we bring in that new team to Cholula, we expect great things from this hot sauce. This is a hot company, it’s not just a hot sauce.
QUINTANILLA: We had Jerry Jones on the other day talking about streaming rights, how that might change if get a big player bidding for NFL. He thought it might improve the valuation of the Cowboys by 50%. Does sports ownership interest either of you at this point?
BRYANT: I’ll let you answer that question because I don’t want to get myself into hot water yet.
STIBEL: So we’re going to let Carl answer that.
QUINTANILLA: Then we’re all in big trouble.
STIBEL: For us, we’re fiscally disciplined. We’re looking for great businesses, great companies and great teams. If that happens to be on the sports side, of course, we’re going to look there. There are great sports franchises. That’s not necessarily our focus. We’re trying to build a franchise here ourselves.
QUINTANILLA: I mean, are you’re smiling. Nothing at all, huh?
BRYANT: I don’t know what are you talking about.
QUINTANILLA: Media overall has to be of some interest.
BRYANT: Of course like Jeff said, it’s just important to make smart decisions. We’re not limiting ourselves in anyway whatsoever. But we will look at opportunities as they present themselves and go from there.
QUINTANILLA: We had a couple big downgrades of global growth today. OECD, world banks, these negative interest rates around the world, implying that investors are looking for low returns, maybe for decades. How does that make your job more difficult? Do you think that’s what it is?
STIBEL: The good news is for us, is we’re investing mostly in the private markets. We’re looking for long-term success with companies. But the reality of course is this is a stock market that can do no matter what. It’s the little engine that can and thinks it can, thinks it can, thinks it can. We see a lot of bad news, but we’re focused on the good news and we continue to see great companies doing great things.
QUINTALLIA: We’re looking at some of your brands here. You look for brands that can sort of navigate through treacherous waters.
BRYANT: You’re looking for brands that have that long-term stability. Like we said, we’re looking for the long tail. It’s important to have brands that have great value, great substance, that can carry on for a long period of time.
CRAMER: Kind of a long shot but one of the most exciting and growth businesses in this country I think will be gambling, sports gambling. You guys have unbelievable fire power. Kobe, your name is known worldwide. Has it ever hit your radar screen that perhaps that’s something that could be a huge business for you?
BRYANT: Yeah, I mean it’s something that we’re giving it some serious thought to. I think the stigma of gambling has been slowly eroding over the years, you see the NBA opening its policies a little bit more towards gambling. And it is now becoming a platform that has a great amount of potential that would be something we have to look at.
CRAMER: I think, that Kobe, you are unique, because Adam Silver’s endorsed gambling. The name that we would trust is Kobe. If you got involved – I’m not allowed to gable, it’s in my contract – but if you got involved, you can take the whole Draft King, you could take all of these things to a new level. Where what we would be doing is saying, you know, we would be gambling and you would be getting a cut because we trust you so I mean maybe it’s one of those things you can look at just because your name is worth gold when it comes to gambling.
BRYANT: Yeah. We’ll just be very patient and make sure we make the right decisions. But I appreciate and understand where you are coming from. how about that?
CRAMER: Sounds good, thank you, Kobe.
QUINTANILLA: This is harder than any locker room interview. It’s like SI trying to get you to comment.
BRYANT: I see you your vision and I appreciate your vision.
QUINTANILLA: Give me an example of the portfolio you have, the most involved you’ve got, either in advising, ideas --
BRYANT: Most recently ,our company the Art of Sport, AOS, the side that I really enjoy most of the business and how we operate, help operate businesses, is the story-telling side of things and, you know, what does the brand represent? What does it stand for? What are we trying to say? How are we trying to inspire and working very closely with Brian Lee and making sure that that story is coming across properly to our athletes.
QUINTANILLA: People might not realize, as I recall you had something to do with the design, the logo design --
QUINTANILLA: The keyboard.
BRYANT: The story is extremely important. You’ve got to be able to communicate your message, what it is that you stand for, across the board and be consistent about that. You’ve got to be able to find what your story is, not that you divvy or vary from it very much, but find one that is consistent enough that has longevity.
QUINTANILLA: Speaking of longevity, congrats, guys, on this anniversary. Thank you for coming back and we hope you will come back again.
BRYANT: Those three years went by fast.
QUINTANILLA: We’ll keep trying on some of this stuff. Kobe and Jeff, thank you guys.
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