The $31M Mistake: Why One Sports Startup Died while Another Reached a $1.2B Valuation
This analysis isn't for track fans; it’s for founders who have ever looked at a messy, legacy industry and thought, "I can fix that with a better model." In the sports world, 2025 was a masterclass in this exact ambition. Two companies looked at the professional track and field ecosystem and saw the same opportunity: a sport with a massive global footprint but a "broken" professional season.
The two players couldn't have been more different. Grand Slam Track (GST), founded by Michael Johnson and backed by Winners Alliance, tried to "fix" the sport from the inside by concentrating stars, guaranteeing matchups, packaging 4 big events, selling media, and growing a premium season. Enhanced Games (TEG), founded by Aron D'Souza and backed by investors including Apeiron Investment Group, Peter Thiel, 1789 Capital, and Balaji S., went the opposite direction and decided to blow up the rules entirely.
As of early 2026, the scoreboard is clear: GST is in Chapter 11 bankruptcy with $31.4 million in debt while Enhanced Games is pursuing a $1.2 billion SPAC merger.
If you're building a startup, you need to understand why one of these models died on the vine while the other is currently outrunning the gravity of sports economics.
The Business Model Trap: Selling a Sport vs. Selling a Solution
The biggest mistake people make is thinking these two companies were building the same thing. They weren't. They were trying to make money in completely different ways.
Grand Slam Track (GST) was a traditional sports business. It tried to make money by selling tickets, sponsorships, and TV rights. This is a difficult, low-profit business. You're at the mercy of TV networks that are often hesitant to pay big money for a brand-new sport.
Enhanced Games is a healthcare and supplement company wearing a sports jersey. The "Games" are just a way to get people's attention. The real business is selling performance medicine—things like telehealth services and supplements. They aren’t just trying to sell stadium tickets; they're trying to sell products to the millions of people watching at home.
The Lesson: If your main product is expensive to run and doesn't make much money, you need a second, high-profit business to survive. Enhanced Games uses the sport to find customers for its expensive pharmaceutical platform. GST tried to pay for its entire operation using only ticket and TV sales, which didn't bring in enough cash to keep the lights on.
The "Phantom Capital" Failure: Real Cash vs. Promises
Every founder knows the danger of spending money you don't actually have yet. GST committed to $12.6 million in annual prize money plus 6-figure salaries for its athletes.
They built their entire budget assuming a $30M–$40M investment was a sure thing. Unfortunately, it wasn't a finished deal. It was just a non-binding term sheet, a document that says someone intends to invest but hasn't signed the final check. When the investor walked away after the first event, the league was broke overnight.
By December 2025, filings showed the company had only $143,000 in cash while owing $31 million in debt.
Debt to athletes: Over $7 million
Debt to production: Over $3 million owed to TV crews
The Lesson: Promised money is NOT the same as money in the bank. If you sign expensive contracts before the cash is actually in your account, you aren't building a startup; you’re building a house of cards.
Trading the Rulebook for a Bigger Payday
Enhanced Games is using a strategy called Regulatory Arbitrage, where a company moves its operations to a different set of rules to get an advantage that others don't have. By explicitly allowing performance-enhancing drugs (PEDs), they've exited the traditional sports system to build a new one where the old rules don't apply.
This has created two massive results:
A Huge Valuation: Because they call themselves a "Longevity Tech" company instead of a "Track League," they've reached a $1.2 billion valuation. Tech companies are worth much more than sports teams.
High Stakes for Athletes: World Athletics has condemned the league, and athletes who join face lifetime bans from the Olympics.
Sidebar: It's pretty easy for Sebastian Coe to preach about the purity of the game when he sits at the top of the food chain. For the 2024 financial year, World Athletics recorded a net surplus of over $20 million. During that same period, the organization paid nearly $500,000 for the President’s salary, board fees, and London-based executive assistance. Meanwhile, a standard professional win in the Wanda Diamond League pays only $10,000. When the Enhanced Games offers $500,000 for a single win, it really isn't hard to blame athletes for taking the risk but I digress....
The Lesson: The story you tell determines how much your company is worth. A track league might be worth 3x its revenue, but a health platform can be worth 20x. Enhanced is using the same sport to play a much bigger financial game.
The Quiet Killer: The Trust Gap
In both the sports and startup worlds, trust is crucial. Grand Slam Track didn't just fail because of math; it failed because trust vanished. Once athletes and vendors realized the checks were bouncing, the business was over.
Enhanced Games faces the same hurdle. They're asking athletes to risk their Olympic careers and their long-term health. If they fail to deliver the $500,000 prizes or the $1 million world record bonuses they’ve promised, their house of cards will fall even faster than GST’s.
While anything is possible, I personally don't see the Enhanced Games falling into the same money troubles as GST. Unlike GST, which relied on soft commitments that disappeared, Enhanced Games is backed by billionaire investors like Peter Thiel, Balaji S. Srinivasan, and Christian Angermayer. Even though the exact amount of money they’ve raised is undisclosed, the caliber of these investors suggests they have the cash-in-bank to fund their promises—something GST never truly had. But of course, only time will tell if they can sustain it.
The Final Verdict: Systems vs. Spectacles
The contrast between these two stories is a masterclass in startup strategy. Grand Slam Track tried to build a "Reformist" model—a new house built on a shaky foundation of hope and soft commitments. They mistook a term sheet for a bank balance and learned the hard way that you can't outrun your own spending.
Enhanced Games is attempting the "Insurrectionist" model. They're bypassing the traditional system entirely by building a high-profit biotech engine to fund a high-risk spectacle.
For every founder, the takeaway is simple:
Attach your "loss leader" to a "profit engine": If your core product is expensive and has low margins, you need a high-margin business to fund it.
A term sheet isn't a bank statement: Never scale your obligations or sign big contracts until the cash is actually in your account.
Attention isn't revenue: Having millions of eyes on your brand is a great start, but if your "Operating System" doesn't have a way to convert that attention into cash, you’re just putting on an expensive show.
One company ran out of money. The other is trying to outrun the industry's rulebook. Both are teaching us exactly what happens when you try to disrupt an industry using a startup playbook without the systems to back it up.