Every April, NFL fans across the country convince themselves that their team has just drafted the next superstar.

The scouting reports are glowing. The analysts love the pick. Everybody on social media is sharing highlights. Before the guy has even taken a professional snap, fans are ordering jerseys and making playoff predictions.

I love the NFL Draft. The possibilities are endless, and every team gets a chance to imagine a brighter future.

But here’s the thing.

Some of those supposed franchise-saving quarterbacks are going to be enormous disappointments.

And that’s what got me thinking about the stock market, particularly initial public offerings, or IPOs.

Because IPO day looks an awful lot like NFL Draft night.

Everybody Loves a First-Round Pick

Think about how much research goes into evaluating a potential NFL quarterback.

Teams have professional scouts, coaches, analytics departments, medical evaluations, college game film, and interviews. They spend millions trying to figure out which players have the best chance of succeeding.

And they still get it wrong. A lot.

A 2025 FOX Sports analysis of first-round quarterbacks found that, of the 61 quarterbacks selected in the first round between 2002 and 2023, 39 were classified as more of a miss than a hit.

That’s nearly 64%.

Now, defining a quarterback as a bust is subjective. Some become respectable starters without turning into franchise cornerstones. Others show enormous promise before injuries change everything.

Remember Robert Griffin III? His rookie season was incredible. He looked like a future superstar, but injuries and other challenges changed the trajectory of his career.

Or consider Anthony Richardson, whose combination of athleticism and potential generated enormous excitement heading into the 2023 draft, but whose professional development has been far more complicated than anyone hoped.

I wouldn’t declare today’s newest draft picks successes or failures yet. Some careers need years to play out.

But there’s an obvious lesson here.

If NFL teams, with all their information and resources, struggle to predict which college quarterbacks will succeed, why should we assume identifying the next great business is easy?

SpaceX, Anthropic, and the NFL Draft of Investing

An IPO is an initial public offering, the process through which a company offers shares to public investors for the first time.

It’s essentially draft day for a newly publicly traded company.

And we’ve had some fascinating examples in 2026.

SpaceX began trading publicly on June 12, one of the year’s most anticipated IPOs. Now investors are looking ahead to a possible November public offering from Anthropic, one of the companies at the center of the artificial intelligence revolution.

The excitement is understandable.

Space exploration and artificial intelligence could transform enormous parts of our economy over the coming decades.

But remember all those NFL scouting reports?

Investors have research analysts, institutional investors, investment banks, financial statements, forecasts, and sophisticated valuation models.

And just like NFL scouts, they’re trying to predict the future.

The challenge isn’t necessarily recognizing that a company is extraordinary.

The challenge is determining how much you should be willing to pay for that potential.

A company can have a terrific business model, revolutionary technology, and decades of growth ahead of it.

But if the stock price already reflects incredibly optimistic expectations, investors may still be disappointed.

In the NFL, the team drafting first overall is usually paying a premium in draft capital for a player everybody already knows is special.

In the stock market, investors sometimes make a similar mistake by assuming that buying into an exciting business automatically means they’re making a good investment.

It doesn’t.

The IPO Statistics Aren’t as Exciting as IPO Day

When an IPO makes headlines, much of the attention centers on the first day’s trading.

Did the stock jump 20%? Did it double? Did investors miss their chance to get in early?

But I’m much more interested in what happens five or ten years later.

Finance professor Jay Ritter at the University of Florida has spent decades studying IPO performance.

His research shows that IPO stocks, particularly companies with relatively little revenue before going public, have historically struggled to match the broader market over longer periods.

In an August 2026 interview published by Charles Schwab, Ritter explained that companies entering the market with less than $100 million in annual sales have, on average, substantially underperformed the broader market over the following three years.

That’s an important distinction.

The company may survive. It may even grow rapidly.

But that doesn’t necessarily mean its stock was a good investment at the price people paid on IPO day.

And comparing IPO success with NFL draft success isn’t quite apples to apples. With a quarterback, we might measure championships, Pro Bowls, or seasons as a starter. With an IPO, we might measure whether the company survived, whether its earnings grew, or whether shareholders actually made money.

Those are very different scorecards.

Which brings me to a personal experience that really drove this home.

My Victor Wembanyama Investing Dilemma

A couple of years ago, when my kids started getting interested in sports trading cards, I thought it might be fun to join them.

And there was one particular card I wanted.

Victor Wembanyama.

Here’s a young basketball player with extraordinary physical gifts, enormous talent, and the potential to become one of the greatest players in NBA history.

As far as basketball prospects go, he seemed about as close to a sure thing as you could find.

So I started looking for a rookie card to buy.

And I quickly discovered I had absolutely no idea what I was doing.

There were dozens of variations. Different card companies, different sets, limited editions, numbered cards, different grades, and prices all over the place.

I thought I was making a simple decision: I believe Wembanyama is going to be a superstar, so I should buy his rookie card.

Instead, I had an entirely different problem.

Which card? And at what price?

Even if I correctly predicted that Wembanyama would have a Hall of Fame career, there was no guarantee that the particular card I purchased would increase in value.

I could be completely right about the player and completely wrong about the investment.

And that’s exactly what can happen when you buy stock in a great company.

Investors sometimes confuse the quality of the business with the attractiveness of the investment.

You can correctly identify a business that will change the world and still lose money if you pay a price that assumes everything will go perfectly.

My Wembanyama dilemma taught me that identifying the winner is only part of the challenge.

Knowing what you’re buying, and what it’s worth, matters just as much.

Do You Really Need to Buy on IPO Day?

Here’s another question.

What if the next truly transformational company goes public next month?

Do you really need to own it on day one?

Think about how many opportunities investors have had over the years to own successful companies long after they went public.

Some businesses continued growing for decades, creating opportunities for investors who weren’t anywhere near the original IPO.

Of course, not every company does that. And plenty of stocks that look exciting at the beginning never fulfill their potential.

But the point is that you don’t necessarily need to buy on the first day to participate in a company’s long-term growth.

Sometimes waiting gives you additional information about the business, its management, its profitability, and how the market values it.

Other times, waiting means watching the stock climb without you.

Nobody gets to know the outcome in advance.

That’s why I like to think about individual investments in the context of an overall portfolio rather than trying to pick the one company that will change everything.

I’ve discussed that concept before in my article on portfolio diversification and the Celtics.

It’s not about avoiding every exciting opportunity. It’s about understanding how much risk you’re taking and what happens if your prediction turns out to be wrong.

You Don’t Have to Draft the Next Tom Brady

Here’s what makes all of this particularly interesting to me.

Tom Brady wasn’t a first-round pick.

He wasn’t even a second-, third-, fourth-, or fifth-round pick.

He went 199th overall, and nobody on draft night was predicting seven Super Bowl championships.

Meanwhile, plenty of quarterbacks taken first overall never came close to achieving that kind of success.

The highest expectations don’t always produce the best outcomes.

The same is true in investing.

I’m certainly not suggesting SpaceX or Anthropic will disappoint investors. Both could have remarkable futures. But none of us knows what those businesses will be worth ten years from now, or what investment returns shareholders will actually earn.

And that’s why I wouldn’t build a family’s retirement plan around correctly predicting the next great IPO.

If you enjoy investing in emerging businesses, there’s nothing inherently wrong with researching those opportunities and allocating a suitable amount of money to them, provided you understand and can afford the risk.

But there’s a big difference between taking a calculated opportunity and needing that opportunity to succeed.

You don’t need to find the next Tom Brady to build a successful financial future.

You need a plan that doesn’t fall apart every time one of your first-round picks turns out to be a bust.

And if the next great company happens to be sitting there in the sixth round?

Well, that’s just a bonus.

This article was inspired by the recent Patriots–Bears game and my daydream about buying stock in Drake Maye four weeks before his recent run. For the lighter side of the story, read my companion article, “If I Could Buy Stock in Drake Maye…”

Scott Nelson | Thrive Wealth Strategies

Securities offered through LPL Financial, Member FINRA / SIPC. Investment Advice offered through Flagship Harbor Advisors, a registered investment advisor. Thrive Wealth Strategies and Flagship Harbor Advisors are separate entities from LPL Financial.

This material is intended for general education, not as a recommendation to buy, sell, or hold any security. All investing involves risk, including loss of principal. Past performance does not guarantee future results.