“Investing in culture” is the core concept of Rares, a sneaker investment platform founded by former NFL player Gerome Sapp.
The platform allows its users to invest in sneakers as one would typically do with stocks, offering sneaker fans an alternative to reselling shoes. Speaking to FashionUnited, Sapp said the concept “gives people access to cultural assets that have kind of become investments.”
“We feel like at some point the cultures and communities that made these assets what they are were left out of the equation for appreciation,” Sapp added.
Now, the platform is expanding its capabilities with the launch of secondary market trading, allowing users to trade shares with others, which Sapp says will increase liquidity as trading volumes continue to grow. Kicking off the new feature, Rares is introducing the Shova 2010 Air Force 1 Hov, a Nike shoe made in collaboration with Jay-Z, with new models being launched on the platform as each pair sells out.
Secondary trading is said to be just the first of many announcements to follow in 2022, according to the company, which is working toward a possible new round of funding and the addition of new asset classes to its offering.
Speaking to FashionUnited, Sapp gave an overview of where the Rares concept came from, the value of the sneaker market and what to expect from this innovative idea.
Can you tell us a little bit about your background?
The Rares story actually begins in Houston, Texas, where I grew up with a single mother. I had learned what lack of access and opportunity really means. I always wanted to bridge the gap between the two.
My passion for sneakers started when my father went to prison. He bought me my first pair of Air Jordan 4s and from that moment I was hooked. I’ve always been a fan of Michael Jordan and what he represented for the black community. Wearing Jordans meant success, they were more than just a sneaker.
Even as a child, I knew that the sneaker would increase in value compared to other shoes. I knew he was a special asset.
I was fortunate to get an athletic scholarship to the University of Notre Dame where I studied finance and played American football. During the summer I worked at Merrill Lynch, where I began to delve into corporate finance, but became more interested in derivatives and other complex types of finance.
Luckily, I was called up to the NFL and played for six years, but during the offseasons I spent my time at Harvard Business School, in a program focused on finance and entrepreneurship. That was the first time I really started thinking about alternative investments.
Where did the idea for the platform come from?
Once upon a time someone stepped on my Air Jordan 11s on the way to class and I remember wiping my shoe down and thinking, “There has to be a better way to get value out of this sneaker than this one.” to wear.”
I knew that sneakers were already a rapidly rising asset class, appreciating faster than gold and rivaling traditional securities in terms of returns. So I thought, what if you could convert sneakers into a stock and allow people to invest in sneakers the same way they invest in a stock. As the value of the sneaker increases, so does the value of the shares you own in that sneaker.
So the sneaker market was a natural complement to other markets for you?
Absolutely, it was the natural progression of my passions: sneakers and finance. I know my sneakers as well as most people do at work. And I’ve been in finance my entire professional life. So it was natural for me to combine those two things.
Although Rares will soon include other alternative asset classes, sneakers were the one I knew and most of my team knew. It was the one that got people excited the most, because not only are sneakers a value-added asset class, but they’re also fun to collect. They awaken different emotional passions in people.
How does the platform work?
We basically created the first real sneaker exchange. We do this by giving users the opportunity to invest in shares of historically valuable sneakers. You can choose a sneaker you like and then just invest in it on our platform just like any other marketplace where you want to make an investment.
The sneakers that we offer on our platform are the ones that have historically been the most popular. The sneakers we trade have typically had a 90 percent return. Everything on our platform is something that we believe will make our investors money. When they diversify their investment portfolio and think about sneakers, making money has to be one of the things they want.
Who is the platform aimed at and who is it ultimately addressing?
Our target group is 20 to almost 40 years old because we address different people. First, we tap into people’s desire to make money in new ways. In the pandemic, people realized that the stock market is just the stock market. A lot of people don’t really understand it and many have lost money doing it. Therefore, they are looking for alternative ways to make money by investing in alternative assets. We bring together people who are interested in other ways of diversifying their investment portfolio.
Then we have a large group of sneakerheads — a $6 billion market — who trade sneakers for money in the real world all day long. They buy them cheap and sell them dear. We made their work easier. We attract that part of the sneaker community.
But there are also older people who use our platform because of the nostalgic aspect. They invest in a piece of their past happiness that happens to be in a pair of sneakers. The audience is broad, but the main reason people visit our platform is for the opportunity to make money investing in sneakers.
Do you think it’s about more than just money?
Alternative investing is about a personal connection. As I mentioned before, a lot of people, especially Gen Z, the newer generation, don’t really understand the stock market and many of them think the stock market doesn’t want them to understand it. But when you start talking about alternative investments, things that you are familiar with, things that you can understand, then here is a connection that you are happy to invest in.
In surveys, 79 percent of Gen Z admitted they are looking for alternative investment platforms to invest money online. People want to diversify their investments into things they are comfortable with, that are fractional, and that allow them to own a piece of it.
Which shoe models do you think are the most popular? Do you often see connections between values and cultural movements?
The biggest are the Air Jordan 1s, specifically the 1985 Jordan 1s. These shoes are classics and will only increase in value. They are the gold standard in the sneaker industry simply because of the way the shoes are made. These were the shoes that started the sneaker hype.
However, if it’s a collaboration with an artist like Jay-Z or Kanye West, it does affect the resale value of the sneaker. What artists do in the real world has a dramatic impact on the value of the sneakers they sell on the secondary market. For example, one of our best-selling sneakers was a collaboration with Jay-Z and the Air Force 1. Jay-Z made his money from music, but now he’s doing it on the entrepreneurial side of music. people like him. When we offered this sneaker for the IPO, it sold out within a day simply because it was a collaboration with it.
Are you directly involved with the brands?
Yes, in a way, but we don’t when we put the sneakers on the platform. The brands have nothing to do with what we do, although they are linked to us in many ways. We simply find the best shoes that we believe will work best for our investors and put them on the platform. From now on we buy this sneaker and then offer it as an investment. But over time we will also open the platform to the community so that they can place systems on the platform themselves.
What goals have you set yourself and what do you want to do with the funds from your successful round of financing last year?
The ultimate goal is simply growth. Growth of our team, growth of our product offering and our competitiveness in the market. We’ve already started expanding our team and we’re still recruiting. We are also beginning to launch new product offerings. We have started to meet some of the milestones we had planned for the funding round and we are in the process of preparing for another funding round – we are growing so fast.
You mentioned that you thought about expanding the offer to other markets. Can you tell us what ideas you have in mind?
I think one of the most important and comprehensive answers I can give you is that any alternative asset class is possible. Whether you’re talking about vinyl records, trading cards, or even non-fungible tokens (NFTs). We really want to scale and become the Amazon of alternative investments. We want people to be able to come to Rares and find whatever alternative assets they want. I want them to be able to invest in them and feel confident that this investment will bring them money. That’s what we ultimately want to achieve, and we’ve already started laying the groundwork for it.
Whether you are a collector and want to put assets on the platform – we authenticate them, we secure them for you – or whether we branch out further and put additional types of alternative assets on our platform, we want the People can come to Rares, click on a category, and find and invest in sneakers, handbags or vinyl records.
Our number one goal is to make money for our investors and make them feel like when they get to rares, they have fun options. Options they can identify with, not only from an investment standpoint but also from a personal standpoint. things they find interesting.
This article was previously published on FashionUnited.uk. Translation and editing: Barbara Russ