He Raised $1 Million From Pickleball Players Before Building a Court. Then He Gave It All Back.

Tim Klich spent 35 years as a commercial banker and never once got in trouble with a regulator.

Then he tried to build a pickleball club in Austin, Texas, and found out what trouble looks like. A city that declared a river through the middle of his land. A parking garage location shut down by noise complaints. Three years of paperwork for a business that was supposed to open in months.

He's 64 now. He plays in every 7 a.m. game, four days a week. He's one of the eight original founders of Major League Pickleball, and the headline on his club's website tells Austin to keep pickleball weird. And he'll tell you, without much prompting, that a 70-location pickleball chain filed for bankruptcy the week we recorded, and that he saw it coming in 2023.

None of this was necessary. He had a retirement plan he could live on. He could have mailed it in, cashed out the 401(k), and settled into a comfortable life. He didn't, and the reason he gives is plain. He saw an opportunity, and he figured he could always go back to banking if it failed.

Pickleball Is for Losers Who Can't Play Tennis

Tim played Division I tennis. In 1984 he was ranked 720th in the world, played exactly one pro tournament, and retired right after, because he knew that was the best he'd ever do. Racket sports are in his blood. His dad was a tennis pro who kept teaching into his 80s, and Tim grew up picking up tennis balls at his dad's clubs at six years old.

So when he first heard about pickleball, he reacted the way every self-respecting former pro does. It's for losers who can't play tennis.

The setup is almost funny. Near the end of his banking career, Tim lent some guys money secured by a piece of raw land. They gave him an option to buy them out, and he did. His plan was an urban tennis resort. This was 2019, and pickleball, as he puts it, was nothing.

Then he watched the Wimbledon finals, met a guy named Steve who had started Dreamland out in Dripping Springs, and got asked what he thought about pickleball. He gave the tennis-pro answer. Steve invited him to play at his house that night.

Tim had been playing tennis for 50 or 60 years. He said it was rewarding. He said he enjoyed it. He would not call it fun, because it was work. Pickleball was fun.

That's a strange thing to admit about a sport you've given your life to. It's also the entire business plan. Rewarding gets you to practice. Fun gets people to bring their friends.

The City Found a River on His Land. It Took Three Years to Unfind It.

Tim now calls himself a very unsuccessful real estate developer. After 35 years in banking, he says, he'd never had a problem with a regulator, because he knew his business, they knew theirs, and you could have a conversation. Real estate development turned out to be a different animal. Neighborhood groups, city council, zoning departments, planning staffers. In his view, the whole structure exists to find ways to say no.

The land he owned was the proof. The city tried to declare a river through the middle of the property, and it took almost three years to resolve.

Stu asked about this for a reason. He's in the middle of his own zoning process for the National Parks Baseball Resort, and Tim's answer was the kind of thing you want to hear before you're deep in it.

Meanwhile, the first location was a downtown parking garage. It worked. They killed it there, and the brand got real traction. Then neighbors complained about the noise, zoning caught up, and they had to close. The lesson he took from it was about weather. Texas can swing from 97 degrees to 41 in a week, and players want to know the game is on, so indoor and climate controlled became the plan.

The bigger lesson came when he rented a warehouse right on I-35, the main artery through Austin. He had an epiphany. Why did he want to own the real estate at all? Other people's money, other people's building. He's effectively out of the real estate business now.

I think he's right, and I think most first-time operators get this backwards. They fall in love with owning the dirt. Tim fell in love with it too, paid three years of tuition, and walked away. Renting is the cheaper education.

$5,000, Five Years of Free Pickleball, and No Securities Lawyer

Back when he still planned to own the building, Tim needed money. Most founders go find investors. Tim went looking for passionate pickleball people.

His pitch was simple. Give me $5,000, and you play free for five years. At the end of five years, you either convert to a regular membership and burn off the $5,000, or you want your money back and I pay it. He structured it as a loan, not a security, because he didn't want to register with the Texas State Securities Commission and he didn't want to sell anyone on making money. The interest was the membership.

He expected hand-to-hand combat. He figured he'd have to talk to people, convince them, grind. Instead the website generated so many inbound inquiries that he hired a college intern to answer them by email, and checks started arriving in the mail. By late 2020 or early 2021, he had raised $1 million.

Why did it work? His own explanation is the best part. He'd been a banker in Austin for 35 years, and it was his first deal, but bankers are typically boring people who do what they say they're going to do. People checked him out and trusted him. He says he looked like a nice boy.

Then the project dragged. The zoning fight ran long. And Tim, feeling bad about the delay, gave every dollar back.

That was the smartest move in the story. Raising money is a one-time skill. Handing it back when the plan changes is how you keep the next ask possible. He also got lucky on the other side: the land he bought appreciated significantly, he took cash out of it, and he bought into a pro pickleball team as one of the eight original founders of Major League Pickleball. First they were the Pickle Ranchers. Now they're the Texas Ranchers. He financed his build out creatively and never had to go back to the market.

He's honest that it wouldn't work today. Back then he owned the land. Now he rents, and with plenty of venues not covering their rent, a member handing over $5,000 is one missed payment away from losing it.

The Bust He Called in 2023

The week of this recording, a major pickleball franchise with 70 locations filed Chapter 11. Tim wasn't surprised. In 2023 he said, more or less, that he loves America and he loves capitalism, but a sport this popular attracts too many people chasing the dream with too much money, and places were going to overbuild and go broke.

His advice to anyone thinking of jumping in now: you're too late. He doesn't say you'll fail. He says you won't make money.

The numbers back up why. As a banker, Tim looked at SaaS companies where office rent was 10 or 15 percent of revenue. He's now seeing pickleball venues where rent is 70 or 80 percent. That leaves almost nothing after the landlord, and players have options. They can squeeze a venue's prices only so far before they walk to a public park.

That changes the acquisition math completely. With a normal business you've got free cash flow and discretion. With a pickleball venue you've got a big chunk of fixed costs and a customer who can leave for free. Tim is negotiating to reopen a facility that closed, and he says if he expands, it'll be by taking over somebody else's operation that isn't working. Even then, he says, it's a very different capital conversation.

The pattern is worth stealing for any hot category. Fast growth attracts capital, capital builds supply, and the landlord gets paid first.

Every Court Is the Same Size, So the Club Is the Product

Stu offered a comparison. No two golf courses are alike, so a country club has an edge over a public course. Tim's courts all have to be 20 by 44, with roughly the same 30 by 60 footprint, so there's nothing to differentiate on in the building. You need decent lighting and good acoustics. After that, he says, the separator is who creates the best community.

He's been refining that for years. Tennis, he points out, is a closed ecosystem. On the road he couldn't get a drop-in game for his life, and baseball needs nine guys, matching ages, parents, fields. Pickleball runs on open play, and Tim has made it a discipline. Three levels where players self-select, three more at the top where staff curate. If your DUPR rating isn't high enough for the advanced game, he'll tell you no, and send you to a tournament to prove it.

He's comfortable being the bad guy, because the people in the top game paid to play with people at their level.

The club sees about 60 new customers a day, a lot of them transient visitors passing through Austin who want a game for a day or two. It does corporate events and birthday parties. It's one of the few sports where a grandparent, a parent, and a kid can share a court.

The brand got a lot of help early. His first outside hire was a branding and marketing expert from SMU who married one of his son's buddies. She made him build a brand book and write down values. Every time Tim has a cockamamie idea, she asks if it's on brand or off brand. And the Western ranch theme rode a wave, because Yellowstone caught on right as they launched.

Tim is also at the club almost every day. Four mornings a week he plays the 7 a.m. games. He's back around 4 or 5 in the afternoon and stays until nine, ten, eleven, sometimes midnight. He doesn't want to be a faceless franchise that runs on a logo. Stu used the whole stretch as a teaching moment: go through your own website as a customer, make purchases, check the experience.

Four Generations, One Block, and a Job He Turned Down

Tim's role models are in their 90s. His late father was a tennis pro until his 80s. His wife's father is 93 and retired last month from teaching law school for 63 years. Both taught him the same thing: stop using your brain and body, and you start wasting away.

The family story runs deeper than the business one. In 1993, he and his wife bought the house next door to the one she grew up in. They've lived beside her parents for 33 years. After his dad's stroke in 2017, Tim flew to Ohio, got into a minivan, and drove his parents from Columbus to Austin nonstop. They lived with him until they passed in 2021 and 2022. For years, all four grandparents lived on the same block in Tarrytown. Now their middle son, his wife, and their two kids live in the other half of the duplex. Four generations, one block.

It connects back to a decision from the mid-90s. Merrill Lynch tried to move him to San Francisco. Tim said he'd travel as much as they wanted, but he wasn't leaving Austin. His boss later got swept out in a political fallout and told him he was one of the few guys who got his priorities right.

His three sons all have good careers: one near partner at an accounting firm, one a data analyst at a bank, one a mechanical engineer for NASA in Houston. He won't ask them to leave their benefits yet. The business isn't settled enough. Maybe if he gets to two or three locations.

What Stuck With Me

Most founder stories are told by people who built a business so they could quit something. Tim built one because he was done being a spectator. He spent 20 years watching entrepreneurs from the lender's chair and liked their energy enough to join them at 60.

I'd also tell you his last answer is the most honest one in the episode. Asked what he'd tell himself before starting, he said he should have raised outside money earlier. He isn't diversified anymore, and he's an older entrepreneur with a lot riding on one venue. He didn't raise it because he didn't want a board, and because he figured he could do it better alone. That's the opposite of the usual founder advice, and it comes from someone who protected control better than almost anyone.

He also said pick something you'll enjoy watching your money disappear into. If it isn't fun, you shouldn't be doing it at this stage of life.

Tim called bankers boring people who do what they say they're going to do. A refund of $1 million and a bankruptcy wave later, that sounds less like a joke and more like a moat.

Recorded live at a Startups with Stu retreat. More at startupswithstu.com.