NEW YORK (AdAge.com) -- The latest venture sprouting forth from Madison Avenue is a marketing consultancy armed with a $20 million investment fund to take stakes in start-up companies. But beyond its bankroll, the firm has serious drawing power at the helm: Phoenix Suns basketball star Steve Nash and a widely respected agency executive, Deutsch's Michael Duda.
The company, dubbed Consigliere (insert your "Godfather" impersonations here), wants entrepreneurs to consider marketing not as an afterthought, but as a strategic part of the growth process. It'll focus on investing in budding firms in only a few sectors, such as e-commerce, sports and durables. Among the backers Consigliere has nabbed already are New York-based venture capital fund Zig Capital, Interpublic Group of Cos.' Deutsch and its chairman, and sometime TV personality Donny Deutsch.
After carefully studying the venture-capital world and pressure-testing his idea with potential partners, Mr. Duda, Deutsch's chief corporate-strategy officer, last summer presented his idea to Mr. Nash. The two became friends in 2007 after the NBA star and his marketing agent, Bill Sanders of BDA Sports, came to Deutsch's New York office with a special two-week marketing project.
Mr. Nash took to visiting the agency regularly, sitting in on creative department meetings and probing staffers with questions about the ad business. His interest grew to the point that in 2008 he took a three-month unpaid internship (after all, how much do you pay a two-time NBA most valuable player?) at Deutsch's Manhattan office, even dabbling in creative work for clients, including an interactive project for Anheuser-Busch.
While the idea behind Consigliere was fully Mr. Duda's, Mr. Nash, who is considered one of basketball's most gifted playmakers, also knows a thing or two about sketching out business plans and raising funds, thanks to a healthy realization that after 14 years in the NBA, he needs to build a life after basketball.
"I realize I'm not going to play basketball forever," said Mr. Nash, who spoke to Ad Age on two occasions about his involvement in Consigliere. "But I want to learn, grow, do something creative. ... I don't want to be stuck after basketball going, 'What's going to give me life now?' I wanted to give myself options to do the things I love so when I'm done playing, I don't have to be a coach or a broadcaster."
So far, that life is shaping up to be busy. He owns Meathawk, a film-production company that produced creative projects for Vitamin Water and Nike and is working on a documentary about Pele, one of the greats of Mr. Nash's second-favorite sport, soccer. He also owns a chain of gyms, a vitamin company and a social-media company, Apoko, which aims to help celebrities and athletes better connect with their fans on Facebook or Twitter.
With Consigliere, "It appeared there was a great opportunity to construct something new" in the marketing space, Mr. Nash said. "To have an agency background and capabilities and merge that with private equity makes a lot of sense."
Mr. Nash isn't the only NBA star to launch a marketing consultancy; Kobe Bryant has Zambezi Ink and LeBron James has LRMR Marketing. But Mr. Nash is committed to spending time on this venture. "The ones where you build a company from the ground up, like Consigliere, take a lot of love." Asked how much time he can realistically devote to the venture in between games and in the off-season, he said, "I'm going to spend hours on it every week -- I don't know if that's three or 20, but some weeks it will be a full-time job."
Said Mr. Duda: "Steve weighing in kept me in check, because he's the one who championed the power of creativity ... otherwise it was headed to be more of a brand-brokering venture-capital unit. It was a reminder from someone outside the agency space to reiterate how valuable that is."
Messrs. Duda and Nash have tapped Zig's Andrew Mitchell as their chief investment officer and are bringing on a handful of others with data strategy, brand-planning and financial analysis skills. It promises to be a lean operation -- fewer than 10 people -- for which Mr. Duda is eyeing office space in downtown Manhattan.
Consigliere is betting on a trend in the VC world that has seen little guys get a leg up on the big ones. By some estimates, less than a quarter of all funds raised last year were less than $100 million, and lowered technology costs are making it easier for start-ups to get off the ground. Given the size of Consigliere's fund, it won't invest in every company it consults with and won't buy start-ups outright, but will take minority and, in some cases, majority stakes in the firms.
"We think it is innovative and exciting but better served outside of Deutsch, as it is not our model," Deutsch CEO Linda Sawyer, who will sit on an advisory board for Consigliere, told Ad Age. "The beauty of our alignment is Mike benefits from our investment in Consigliere and the ability to tap into our resources and our people get to play in this space and work on businesses at their inception stage. Mike's an entrepreneur at heart, and we encouraged him to explore his passions on a new stage."
Deutsch will potentially reap the benefits of being an early ad adviser to the next Monster.com or Expedias of the world. At the same time, Mr. Duda's departure does mean Deutsch needs to quickly find a replacement new-business leader. As one industry consultant put it, the New York office needs a "big hit" after having losing high-profile accounts such as Ikea and Tylenol this year.
One person who thinks Consigliere will be a slam dunk is Kent Goldman, a principal in San Francisco at First Round Capital who's met with both Mr. Duda and Mr. Nash. "I think I'll be reaching out to Consigliere quite a bit [for potential business partnerships].
"What really stands out about Mike is his understanding of brand and consumer business," said Mr. Goldman. "I don't want to downplay the importance of having good technology, but we're moving to a world where tech is moving more and more to commodity infrastructure, and what distinguishes these companies is how they distinguish their brand."
As for Mr. Nash? "If you look at the way he's built his own brand, he's an entrepreneur and as a basketball icon, he's in the center of pop culture, experiencing trends and, quite frankly, setting trends," said Mr. Goldman.