Nate Raabe’s RX3 Growth Partners typically studies 1,000 companies annually for potential investments.
Last year, even though it closed on a second fund that was oversubscribed at $150 million, the San Juan Capistrano-based private equity firm made only two investments.
“We expect 2025 to be a lot more active,” Managing Partner Raabe told the Business Journal. “We’re seeing a lot more attractive investments. We definitely plan on an increase in deal activity.
“2025 should be an active exciting year for RX3.”
Raabe last year was awarded a Business Journal Excellence in Entrepreneurship Award for successfully co-founding RX3 in 2018 with Aaron Rodgers, the famous New York Jets quarterback, and Byron Roth, founder of Roth MKM, the largest investment bank with headquarters in Orange County.
The Star Investment Model
RX3 raised $50 million in its first fund, and its successful investments included Irvine-based Orgain Inc., a maker of protein drinks that’s grown to a valuation of around $2 billion.
The company typically invests in later stages where companies have more than $10 million in annual sales and are ‘culturally relevant’ consumer brands. Nowadays, it’s tweaking its investment criteria to emphasize companies that are already profitable. In last year’s fundraise of $150 million, investors included famous athletes like Jared Goff, Michael Phelps and Josh Allen.
RX3’s model turns the typical athlete or celebrity endorsement on its head. Instead of a company paying the athlete or celebrity, they buy a stake in the company. Furthermore, the stars can add value by promoting the products of the companies they’ve invested in. By aligning interests in the form of equity, it allows the investors to be on the same team as the owners.
Last year, RX3 invested in two firms:
• Fever, an online ticketing system for its own curated events. Raabe said it’s a natural fit for some of its investors who are entertainers.
• Therabody, which makes products like massage devices and is expanding into a line of beauty products.
That publicity “definitely shines a light on the charitable work that we’re doing,” Raabe said.
Raabe said RX3 would love to invest in an Orange County brand.
He isn’t the only successful private equity fundraiser in his family. His wife, Rebecca Raabe, last year helped Sprig Equity, where she is an investment partner, close on a $50 million round to invest in medical devices.
The company’s fourth annual flag football tournament is slated for March 15 at the football stadium at Saddleback College in Mission Viejo.
The event will feature Rodgers, of course, and other notable quarterbacks like Goff, Allen and Sam Darnold.
“This will be our best year yet for quarterbacks,” Raabe said, adding that the event is open to the public.
In the past year, the event, which has raised almost $5 million, has been highlighted in the national media like the Wall Street Journal and Bloomberg News.
