When Baron Davis was 19, he signed a $2.7 million contract with the NBA's Charlotte Hornets. Now 42, the former basketball star wishes he'd started investing that money right away.
"Knowing what I know now, I definitely wish I would have taken the onus to invest more and be more of an angel entrepreneurial investor," Davis tells CNBC Make It.
Over the course of his 14-year NBA career, Davis earned more than $147 million. These days, he says, he's investing some of that money into cryptocurrencies and creating a metaverse. He also appears as a small-business advisor on the most recent season of financial services company Deluxe Corporation's Small Business Revolution documentary series.
When Davis speaks to rookies today, he gives them simple advice: Take at least $25,000 and put it directly into a business plan, an investment or the stock market. He tells them to consider that money "burnt" — and to do it regardless of what their agents recommend.
"Let that [$25,000] be graduate school or business school for you," he says. "Because you can actually track it, and that's where you are going to learn."
Davis retired from the NBA in 2016, but says he learned the value of investing a few years into his NBA career when he purchased an early equity stake in Vitaminwater. In 2007, Coca-Cola acquired Vitaminwater for $4.1 billion, netting Davis an undisclosed — but reportedly lucrative — return on his investment. (A spokesperson for Davis didn't immediately respond to CNBC Make It's request for comment.)
Ever since then, Davis says, he's been "getting lucky" with his investment decisions.
The ex-point guard was an early investor in Thrive Market, a membership-only online grocery start-up founded in 2014. The company grew significantly during the pandemic's early months and brings in an estimated $120 million in annual revenue, according to Modern Retail. (Thrive Market didn't immediately respond to CNBC Make It's request for comment.)
Davis has also founded several start-ups, including retailer The Black Santa Company and events company Business Inside the Game (BIG).
His takeaway from those experiences: Before you try to invest in a company, figure out how you can be helpful to it. Davis' own "secret sauce," he says, is his network: He's branded himself on LinkedIn as a "master connector," and says he typically uses his connections as a selling point for start-ups.
As for his cryptocurrency interests, Davis declined to disclose any specific investments — but noted that he's trying to assemble a metaverse that honors talented NBA players who don't get into the Basketball Hall of Fame.
"We want to celebrate them in our metaverse and our Hall of Fame history," he says.