He Started a Business With $850 and Grew It to $2.5 Billion — After This Make-or-Break Moment
Varsity Brands is now a $2.5 billion company, but a mistake early on could have cut the company’s progress short.
Key Takeaways
- Jeff Webb is the founder of Varsity Spirit, now Varsity Brands, a cheerleading training company acquired by Bain Capital for $2.5 billion in 2018.
- Webb started the company in his apartment in 1974 and eventually expanded to uniforms and competitions.
- One situation with a uniform manufacturer could have cut the company’s trajectory short.
In the late 1960s and early 1970s, cheerleading was vastly different than the sport we know today. It was non-competitive, and schools’ student bodies often elected cheerleaders. Performances focused on chants and crowd engagement. Teams performed minimal stunts; men often dominated the squads.
Jeff Webb was elected as a cheerleader in college at the University of Oklahoma. He spent his college summers working for the National Cheerleaders Association, a company in Dallas, Texas, that hosted training sessions for high school and college cheerleaders. He traveled from campus to campus, training young athletes.
After graduating in the early 1970s with a bachelor’s degree in political science and government, Webb went to work full-time at the National Cheerleaders Association. Within a year, the company quickly promoted him to general manager. He was 25 years old and didn’t have any plans to become an entrepreneur. He was actually thinking about going to law school.
The only problem? He knew he could run those training camps more effectively and change cheerleading as a sport. He wanted to take what had been traditionally a leadership activity on campuses and add things like acrobatics and music to give the sport a new dimension.
“I had this vision of how cheerleading could change.”
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“I was frustrated at that company; I wasn’t able to do things as quickly as I wanted,” Webb tells Entrepreneur in a new interview. “I had this vision of how cheerleading could change. It could be more relevant, impactful and involve more people. I just couldn’t get those things done, and so I was frustrated.”
Webb faced a choice: Go to law school, or act on his frustrations and start a company of his own. He chose the latter option and founded Varsity Spirit in 1974 from his apartment, pitching in $850 of his own money for the venture. He raised an additional $85,000 from friends and family, which he used to fund the first year of the company.
Varsity Spirit started off hosting cheerleading training camps for high school and college cheerleaders before expanding into making uniforms and hosting national competitions on ESPN. According to Webb, the number of students attending camp each summer increased from 4,000 in 1975, the first year, to 300,000 in 2019. However, an early mistake could have cut the company’s progress short.
Varsity Spirit had been running camps for about five years when it decided to get into the uniform business. Webb didn’t know anything about making garments. He and his team came up with uniform designs and a catalog, and had to hire a contractor to actually make the uniforms.
Webb found a Tennessee-based manufacturing company that made uniforms for other sports teams, like basketball, baseball, softball and football. He went to it with drawings of the uniform and an estimate on volume. The company said it could assemble the uniforms and ship them directly to customers.
“We put our credibility on the line with our customer.”
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Excited by the news, Webb released a product catalog to all of his camp customers and collected deposits from schools. He sent the money and the orders to the manufacturer, which promised to deliver the orders within four weeks.
“Four weeks go by, no uniforms come out,” Webb says.
He called the president of the manufacturing company, who reassured him that they had an inventory outage and should be up and running within a week. Another week went by, and yet another, and no uniforms. Finally, on a Sunday afternoon, the president called Webb with bad news: The manufacturer was going out of business.
“So now I’ve sent all the money in, we put our credibility on the line with our customer, and we have no uniforms and no money to pay for them,” Webb says. “And no other supplier.”
Through a contact who was working with him on the camp’s souvenir T-shirts, Webb was able to find a small manufacturer in North Carolina who was making sweaters. He asked if the manufacturer was able to make uniforms, and he accepted the challenge.
“In the basement of his house, he set up a cutting table, sewing machines, a monogram machine, and he actually made the uniforms there and shipped them out,” Webb says. “We survived.”
Webb’s uniform business kept expanding, and the North Carolina manufacturer actually built a plant.
“If we hadn’t solved that problem, I’d probably be talking to you doing something else,” Webb says. “You have to build a reservoir of goodwill with your customers, employees, contractors, suppliers. All of those people should feel like they’re a partner.”
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Varsity Spirit was able to continue as a company and grow in double digits every year, according to Webb. He claims to have personally led the transformation of cheerleading into a highly athletic, competitive, globally recognized sport.
“We really tried to position ourselves as the extracurricular partner to America’s schools.”
In 2011, Varsity Spirit merged with Herff Jones, a manufacturer of graduation products like class rings and caps and gowns, deepening its reach into education. The merged company purchased BSN Sports, the leading direct supplier of sporting goods in the country, in 2013 and became Varsity Brands.
“We really tried to position ourselves as the extracurricular partner to America’s schools,” Webb says. “We weren’t there when we started, but that’s what we eventually morphed into.”
Later, a Charlesbank Capital Partners-led investment group acquired Varsity Brands for $1.5 billion in 2014. Then, Bain Capital acquired it for $2.5 billion in 2018.
Now, almost every college and high school cheerleader in the country wears a Varsity uniform, according to Webb.
“It took a long time to get to that billion-dollar mark,” he says. “You always have to have your ears open, your eyes open, and look for complementary things. That’s how we built what we were doing.”
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Key Takeaways
- Jeff Webb is the founder of Varsity Spirit, now Varsity Brands, a cheerleading training company acquired by Bain Capital for $2.5 billion in 2018.
- Webb started the company in his apartment in 1974 and eventually expanded to uniforms and competitions.
- One situation with a uniform manufacturer could have cut the company’s trajectory short.
In the late 1960s and early 1970s, cheerleading was vastly different than the sport we know today. It was non-competitive, and schools’ student bodies often elected cheerleaders. Performances focused on chants and crowd engagement. Teams performed minimal stunts; men often dominated the squads.
Jeff Webb was elected as a cheerleader in college at the University of Oklahoma. He spent his college summers working for the National Cheerleaders Association, a company in Dallas, Texas, that hosted training sessions for high school and college cheerleaders. He traveled from campus to campus, training young athletes.
