You may have read that venture capitalists invested nearly a billion dollars into sports technology companies in 2014. This represents a massive paradigm shift in less than a few years, as institutional investors had once shunned the sports sector and are now flocking to it.

Previously, sports-focused entrepreneurs often struggled to raise capital because many investors viewed the sector as niche and had traditionally lost money in the category.

For example, while speaking to an athletics-obsessed audience at the 2014 Sloan Sports Analytics Conference, storied venture capitalist, Bill Gurley, cited data from a large pool of institutional investors, "Over the past 25 years, they've had 40 investments...and they lost 30 cents on the dollar in the industry. The venture industry hasn't been fascinated with the sports business per se."

This was like a telling a room of 4-year olds that Santa Claus doesn't exist.

But billionaire, Michael Rubin, quickly countered Gurley's assertion. Rubin is a part owner of the Philadelphia 76ers and founder of Kynetic, the holding company of Fanatics, Rue La La, and ShopRunner. He said, "In the last 10 years it's changed. You've got very smart people entering the sports business; people are finding scale...if you really look at sports in 2014 versus a decade ago I think the sophistication of some of the entrepreneurs is definitely better."

The flurry of recent investments supports Mr. Rubin's views. TechCrunch recently reported that, "Venture funding for sports tech startups hit an all-time high of $927 million in 2014, growing nearly 30% year over year since 2012. In the first few weeks of April alone, investors committed $151 million in venture funding for sports tech companies"

And it's not just professional investors putting money to work; large companies are also acquiring sports assets. William Morris Endeavor (WME) made headlines in 2013 when it purchased IMG for $2.4 billion and Under Armour recently acquired MyFitnessPal for $475 million.

So while fundraising was often a challenge for entrepreneurs aspiring to create sports companies, that has now changed. The past couple of years in particular have confirmed another venture capitalist's assessment when in 2013, Carmichael Roberts said, "The amount of dollars going into sports versus opportunity is out of whack. Even though you see it increasing (investment), the opportunity way outstrips the amount of capital going that direction."

Investment dollars are catching up.

Even institutional investors are realizing that sports aren't niche. The content that sports companies can produce is polarizing and uncompromisingly powerful. In turn, they are able to command very significant audiences, and those audiences equate to valuable companies.

As Mr. Rubin pointed out, the paradigm shift has been driven by the efforts of smart, sophisticated entrepreneurs capable of bringing these sizable business opportunities to life.