Space Investment

How to Jumpstart a Financing Climate

 Space is the Future

• Industry of the next thousand years

• Unparalleled wealth creation
• Multiple sectors with large opportunities
 Now is the Time

• Low Costs
• Real Estate, Labor, Technology

• Growth Opportunities
• Starting from an Industry Lowpoint

• Strong Financing Climate: Historic

• Long-term Horizons
 Space Investors
• The Wealthy Maverick
• The Passionate Hobbyist
• The Speculator
• The Public Relations Play
• More of the Same: “Mega Angels”
 Space Challenges
• Scorned Media - The Failed Promise
• Visionary Engineers - Disdain for Business
• High Quirk Factor - The Good with the Bad
• False Perceptions - Domain of Government
•I-N-F-I-G-H-T-I-N-G
 Annual Statistics
• $60 Billion USD Invested (50% US)
• 3,000 Companies Funded
• 3,800 VC Firms
• 16,500 Professional Venture Capitalists
investors move into risky industries: $100 BN
impossible without industry infrastructure
 Building
The Space “Industry”
 Define Clear Sectors
TIP 1:
• Space Exploration Space is not
• Defense a tangible
industry.
• Commercial Space TIP 2:
• Science Two
• Space Tourism companies
don’t make a
• Travel sector
 Develop the Sectors
• Vision and Agreed Upon Goals
• Defined Market Opportunities and Models
• Specialized Media and Associations
• Broader Media Awareness
• Investor Outreach and Education
• Success Stories!
 Case Study: Tourism
• Goal: Personal Space Flight
• Model: Sell Tickets
• Specialized: PSF (Media?)
• Awareness: X Prize, Virgin (Recent?)
• Success Stories: Space Adventures
• Investor Outreach: (Today?)
 Funding
Your Company
 Raising $$$ is Hard
(getting to space is harder)

Low High
Management Effort 25% 50%
Time to Close 4 mn’s 12 mn’s
Pitches 10 60
Offers Received 1 5
Equity Dilution 15% 45%
Amount Raised $0.5 MM > $10 MM

• Ownership is an illusion with Preferred Equity

 The Classic Cycle

• Max Out the Credit Cards

• Convertible Debt FF / Angel Round
• Preferred Equity by Venture Capital Firms
• Preferred Equity by Private Equity Firms
• Initial Public Offering
 The Steps
• Fundraising Law Firm - Delaware C Corp
• The “Throw-away Pitch”
• Prepare Your Approach and Materials
• Pitch 30 Funds in Two Weeks
• Receive an Offer - do not accept it
• Close the Deal - have a back-up plan
Good Signs
• Thoughtful Questions
• Market Understanding
• Set Follow-up Items
• “Interesting”
• Meeting Partners
Bad Signs
• No Questions
• Market Size Ignorance
• No Further Steps
• “Maybe” or “but”
• Handled by Associates

• Are they doing competitive research?

• Are they overly concerned about traction?
• Do you sense a run-around?
 Tips from the Inside
• Do not outsource your fundraising
• Lawyers work for the investors
• Do your homework
• There is no “Industry Standard”
• There is no confidentiality
• Understand exit scenarios
• Inform targets of progress