When Paul Wachter first met Maverick Carter and LeBron James in 2005—two years after the basketball star made his NBA debut—the investment banker immediately knew that he didn’t want to be their financial adviser. He wanted to go into business with them. “What I saw in them was that they were really smart and that they got the idea of building businesses . . . even though they’d never done it,” Wachter recalls. “I could feel that over the years they would turn into really good business people and that we could really build some cool stuff together. And I turned out to be right.”
For 15 years, Wachter has been the behind-the-scenes architect of the duo’s entrepreneurial approach to wealth creation. James has largely eschewed traditional endorsement and licensing deals favored by an earlier generation of sports superstars in favor of taking equity stakes in brands and launching new businesses—culminating last summer in the formation of SpringHill Company, No. 5 of Fast Company’s ranking of the World’s Most Innovative Companies.
Wachter’s asset management firm, Main Street Advisors, doesn’t just structure and finance deals. Main Street offers its clients—a roster that includes such high-profile names as Jimmy Iovine, Billie Eilish, Bono, Arnold Schwarzenegger, Boston Red Sox Chairman Tom Werner, Drake, and Dr. Dre—portfolio management and advisory support on their businesses and investments. Main Street also invests (and in some cases acts as a cofounder) in many of its clients’ startups, through a series of funds focused on venture, growth, and private equity investments.
As a result, Wachter and Main Street sit at the center of a sort of keiretsu of buzzy businesses at the crossroads of media, entertainment, lifestyle, and sports. “Paul is a totally unique investor and financial advisor,” says Jimmy Iovine, the music producer and cofounder of Beats Electronics, the headphone maker acquired by Apple in 2014. “He understands the power and impact of the platform he’s created at Main Street Advisors and how he can leverage that platform to benefit his clients and the companies he’s invested in. It’s unlike anything else in the space.”
Like conventional venture capital firms, Main Street brings its founders together to share best practices and trade advice, though Wachter’s introductions have a distinctively Hollywood flavor. For Attn:, an L.A.-based media company backed by Main Street (and Wachter personally), Wachter brokered a meeting with client and friend Arnold Schwarzenegger, who went on to appear in several popular videos for the site, including a June 2017 clip in which the former California governor chastised then-President Trump for backing out of the Paris climate agreement. Wachter also introduced Attn: cofounder Matthew Segal to Tom Werner, who advised on several projects and served as an executive producer on VOMO: Vote or Miss Out, an Attn:-organized comedy special that ran on ABC in the fall.
Main Street is able to leverage its relationships to give its portfolio companies additional visibility. Main Street invested in Hyperice, a maker of sports recovery technologies (and No. 5 on our 2021 Most Innovative Companies in sports list), and arranged meetings with the NBA, which recently announced its players will have an opportunity to use Hyperice’s massagers courtside. Main Street is also backing Kate Farms, a producer of plant-based drinks. Wachter sent some of the company’s chocolate beverages to client Billie Eilish, who mentioned it in passing in a video interview with Vanity Fair. “There’s this chocolate milk I’ve been drinking, its one of those things that’s a meal in a drink,” the musician, who is vegan, said in response to a question about her current obsessions. “It’s good. It’s called, farm, what . . . Kate Farm?”
Wachter took a somewhat circuitous path to becoming a power broker in the L.A. entrepreneurial scene. He graduated from Columbia Law School in 1981, clerked for a federal judge, and worked as a tax attorney before moving into investment banking roles at Bear Stearns, Kidder Peabody, and Schroder & Co. He started Main Street Advisors in 1997 and today operates the business out of a nondescript office building in Santa Monica. (“I prefer to say a block from the beach on Main Street in Santa Monica,” he jokes.)
Wachter says he has helped steer Carter and James into some surprising investments that reflect their values and passions. He helped facilitate James’s 2007 investment in Cannondale, the Wilton, Connecticut-based bike maker, a deal that reflected the athlete’s fondness for biking—James has talked about how cycling is part of his training regimen and how biking was an integral part of his childhood in Akron, Ohio—as well as an element of social good. As a condition of James’s investment, Cannondale agreed to donate bikes to James’s foundation and to make other charitable contributions.
“LeBron and Mav saw the power of doing an equity deal where we were helping a business. They saw it could get attention, and they saw that it led to a really good result, and they saw it could lead to additional interesting things in their lives.” Wachter says. “Both of them kind of went like, ‘We like this, and we get this.'” SpringHill, which brings the entrepreneurs’ various media and marketing properties under a single umbrella, is unabashed in its ambition to empower communities of color.
In many ways, Carter and James have paved the way for a new generation of entrepreneur-athletes seeking to build their own companies. But Wachter cautions that building enduring success is hard, especially if consumers sense a disconnect between a celebrity and the product. “The word Arnold [Schwarzenegger] always uses is ‘organic.’ What he means is ‘authentic.’ If you stay true to who you are and what you are and what you believe in, you can still be commercial and it can work.”
Wachter also looks for authenticity and passion in the non-celebrity CEOs he backs. Other Main Street investments include 88rising, Dave’s Hot Chicken, and Zwift (No. 2 on the on the Most Innovative Companies sports list this year). He says he’s drawn to founders such as Aaron Levant of Ntwrk (No. 6 on the Most Innovative Companies video list this year) and Matt Segal of Attn: (Most Innovative in video in 2019). “They love what they do,” he says. “They’re smart and creative and innovative, and it comes through.”
Wachter came to understand the power of “joy” in driving business success four decades ago. He says he observed his brother, now chairman of Sotheby’s North America and South America, toiling as junior art expert when he started at the auction house 48 years ago. “I was looking at him, 40 years ago, going, why is he so happy? And I realized it’s all about the joy,” Wachter says. ” If you have the joy, you can succeed.”