Fanstake raises $3M to build fan-funded NIL collectives

Fanstake, a platform that allows college sports fans to put money toward athletes' NIL deals, has raised $3 million.

Why it matters: The company is giving the average college sports fan a role similar to that of NIL collectives, whose methods have drawn the ire of the NCAA.

How it works: Fanstake allows sports fans to pledge money toward a college athlete in an effort to entice them to either transfer or remain at their school.

• Once a player makes a decision, Fanstake strikes an NIL deal using the money pooled from fans of that specific school. For fans whose school is not chosen, their money gets returned back to them.
• Fans can pledge as little as $5.
• "We were trying to keep it as small as possible. The whole idea here is allowing grassroots fans to participate," co-founder Greg Glass tells Axios.

The big picture: The NCAA vs. House settlement that will allow colleges to pay players will further divide the haves from the have-nots in college sports.

• Glass hopes Fanstake can help boost smaller programs that can't necessarily afford to cut out $20 million from their budget to play players.

Zoom in: The $3 million in pre-seed funding was led by Susa Ventures and Will Ventures.

• Glass founded Fanstake earlier this year with Alex Boisvert and Donnie Flood.
• The three were part of the founding and executive team of Bizo, an ad tech company that LinkedIn bought in 2014 for $175 million.