Sports Leagues Hunt for Startup Investments in a Chummy Style of Venture Capital

A couple weeks ago, LeBron James was in Las Vegas, seated courtside at the Thomas and Mack Center to watch his team, the Los Angeles Lakers, scrimmage against their crosstown rivals, the Clippers. The game was a highlight of the NBA’s annual off-season Summer League tournament, where rookies and rising stars—like James’ son, Bronny—gain playing experience, while starters get a first look at the young talent they’ll soon face on the court.

Just across the hall in a carpeted conference room, a crowd of about 100 people in polos and button-downs had gathered for their own scouting. It was demo day for NBA Launchpad, a four-year-old startup incubator that funnels a steady stream of possible investments to the league each year—a cornerstone of the NBA’s newfound interest in venture capital.

First up in the startup queue: SportIQ, founded in Helsinki, which makes smart basketballs laden with sensors that can detect which player pushed a ball out of bounds. Later came OneCourt, a startup led by a group of recent University of Washington graduates who’ve also gotten angel funding from Microsoft’s Satya Nadella to make a haptic device enabling visually impaired fans to follow live games.