Dude Perfect, a group of friends who have gone from making backyard trick-shot videos in college to becoming long-standing social media sensations, is ready for its next growth leap.
And it's turned to a private investment firm co-headquartered in Wichita.
On Tuesday, the Texas-based sports and entertainment group and Highmount Capital — whose co-founder Jason Illian and chief operating officer Scott Flucke call Wichita home — announced a strategic partnership that includes a nine-figure growth capital investment aimed at helping Dude Perfect take on more opportunities and further scale the business.
"It's not just the capital," said Illian, who launched Highmount last year alongside New York-based co-founder David Hawkins. "We're helping them build a management team around this, so that they can really be thoughtful and intentional and purposeful with each step along the way."
The investment is Highmount's first deal — a milestone moment, and one which could have positive ripple effects for Wichita.
"They're building a firm in a place where not everybody builds a firm like that," said Mary Beth Jarvis, president and CEO of NXTUS, which aims to be a catalyst for the startup ecosystem in Wichita and Kansas.
The birth of Highmount Capital
Illian and Flucke first met and became friends in 2017 at Koch Industries in Wichita as the Koch Disruptive Technologies investment firm was getting off the ground.
Then in 2022, Illian, who served as KDT's managing director, decided to start his own endeavor.
Meanwhile, Flucke had decided to retire after 25 years at Koch, most recently in a deputy general counsel role, and didn't have immediate plans to work again.
That didn't last long.
"So I was out just taking a walk," said Flucke, who lives in the same subdivision as Illian. "And he popped out of his house and shared with me a little bit about the vision of Highmount and had me intrigued. And so I stayed retired for about 30 days.... We were values- and vision-aligned."
Those values include what Illian says is a focus on more than just providing funding to a company, but becoming true partners.
"There are bigger firms that will move faster, and maybe write a bigger check off the bat," Illian said. "But we think about this as — we want to be able to trade Christmas cards with you. We want to get to know you. Great companies have ups and downs, and you want your entrepreneurs and executives being able to call you on a Saturday because they know you.
"When you build that trust, then they're willing to tell you the bad things, as well as the good things. And, really, where we need to step in most of the time is in the tough situations. But if they don't feel that level of comfort and trust, then that's difficult."
Highmount Capital focuses on investing in early growth-stage and middle-market technology and media-related companies.
Illian brings to the table not just his time at Koch Disruptive Technologies, but experiences as a software company CEO and founder, including at Bookshout, an e-book company.
"We're not under any guise to think that building companies is easy, because it's not," said Illian, who, along with Hawkins, is a Highmount general partner. "Building anything is exceptionally hard."
Meanwhile Flucke, who is also general counsel, brings other skills that can help businesses with big growth potential.
"A lot of these companies don't have a lot of operational support," he said. "So I can come in, and — whether it's HR, compliance, legal — and help them think through their key risks and keep them out of the ditch."
In the New York office, Highmount's two other team members include Hawkins, who previously led the Hawk Equity investment firm, and partner Ben Nissan.
The firm launched during a time when the venture capital industry hit major headwinds. According to a Financial Times report, U.S. venture capital firm fundraising hit a six-year low in 2023.
But Illian said down times can bring positives.
"It makes the entrepreneurs and executives even more intentional and more capital-efficient, because they don't know if there's a lot of money around," he said. "When there's a lot of money flying around, people sometimes get a little lazy about how they spend and their operating structures."
Highmount ended up with a strong 2023 raising money from investors, Flucke said.
"We've got enough committed capital where we can go out and make lots of investments — but we're being very selective," said Flucke, adding he expects two to three more investments from the firm this year, though not likely the size of the Dude Perfect deal.
How the Dude Perfect partnership came together
After hearing in mid-2023 that Dude Perfect — led by Tyler Toney, twin brothers Cory and Coby Cotton, Cody Jones and Garrett Hilbert — could be looking for growth capital, Illian said Highmount's engagement with the "Dudes," as they're also known, began that fall.
The group had been approached, according to Illian, by multiple billion-dollar firms trying to buy Dude Perfect, which has grown its YouTube audience to 60 million subscribers, has more than 100 million total social media followers, sells out arenas on live tours and even has its own toys.
Dude Perfect didn't want to sell.
"They wanted a really good partner, and to build this tremendous platform," Illian said. "And what was happening is they were getting really large partnership offers from everybody from Disney and Amazon to Netflix ... and they just said, 'We've outgrown ourselves. We cannot literally tackle all these by ourselves.'"
Illian said Highmount's investment in Dude Perfect is between $100 million and $300 million. CAA Evolution and King & Spalding advised Dude Perfect on the deal, while Stinson LLP represented Highmount Capital.
Illian and Flucke said they've been consistently impressed by Dude Perfect's values, saying the group turned down deals with adult beverage companies early on in their growth as part of a desire to stay family friendly.
"The Dudes, when you spend time with them, they have such a high bar of excellence for their content and the things they put out the families," Illian said.
Dude Perfect launched its own streaming app in 2023, is set to move into a new 36,000 square-foot headquarters in Frisco, Texas, later this year, and will be featured in an upcoming ESPN "30 for 30."
Opportunities could be in areas like an animated series and Dude Perfect-branded entertainment venues, Illian said.
"I think where this capital is going is to build their capabilities and resources to go tackle some of these really big opportunities," said Illian, noting Dude Perfect's entire team stands at around 20 people. "If you're going to go partner with any of these billion-dollar entities, you need a sizable enough team to actually tackle them."
Coby Cotton, one of the Dude Perfect co-founders, said in a news release the group wants to "serve families with the most trusted entertainment on earth.”
“By partnering with Highmount Capital, we hope to pour gas on the fire and take the Dude Perfect fun that families have witnessed on screens these past 15 years and turn it into real life products and memory-making experiences they can actually touch and feel for themselves," he said.
Why Highmount matters to Wichita
Beyond the fact that two of its key executives are based in Wichita, why should this deal resonate here?
Jarvis of NXTUS said it's a part of a larger equation for the region's startup ecosystem.
"The heartland needs to have capital flowing, organizations being built and great companies being built and supported across the region, if we're going to achieve the critical mass that places like Silicon Valley, New York or Boston can achieve in a much smaller geographic area," she said.
Jarvis added that the hope is that there are more milestones like this to come.
"It's great news and it's a great development — we just have to make sure that it's among other pieces of news and among other great developments," she said.
Meanwhile, Flucke and Illian noted it would be a dream if, eventually, one of the companies they invested in was based in Wichita.
"I will support Wichita, just like I'll support Cincinnati or Omaha or Miami or any place that is literally trying to build great companies that have impact," Illian said.
Meanwhile, Highmount, which is looking for local office space, sees being co-headquartered in Wichita — instead of Silicon Valley — as an asset.
"I think that when you're kind of countercultural, and you're not always in the same places as everyone else, you don't get caught up in the same thinking way of doing business," Illian said.
