The panel consisted of Stephen Fleming, Esther Dyson, and Joe Pistritto. Each briefly spoke. They feel the industry is maturing, and real investors might be willing to cut a check. Venture Capitalists would want companies to have insurance. Most VC firms are not going to invest in rocket companies.
One of the first questions VCs is what is your exit strategy? They want to make a good investment and get their money back.
Esther wrote for Forbes. Stories about common items were better received. When push your product, find a way to help customers related. Business in space is business first, and then space. Venturers are people who are interested in the business aspects.
Joe talked about various types of VCs. Some will invest for the long term and be comfortable in waiting, others are more cut throat.
Esther said if you are just a rocket science, that is fine, but you need to find a business person to partner. Joe said that CEOs are more likely to get fired.
They started taking questions from the audience:
One person in the audience said that recently more companies are doing self funding.
Joe said it is great if you can self fund. Esther said good investors are very helpful, bad investors are really, really bad.
One person asked what is the most important thing that investors can provide?
Esther said it really varies. Good investors can provide advice, wisdom about business, and how to relate to people outside the space industry. Joe said good investors can provide contacts.
Ken Davidian asked if the end game is always going IPO or being bought out?
Stephen said yes. Venture Capitalists are using other people’s money, so they need to get access to some kind of liquid assets. Joe said VCs are a more expensive way to get money, but that VCs can bring more money.
How pick out Venture Capitalists?
Stephen said it is important to do due diligence. Ask about their successes, and their failures. Most VCs are happy to share information.
When do we go to Venture Capitalists?
Esther said it is good to go before you need the money. In best case you get started about a year before you the money. You will get a much better price if you get several options, and if you can say I don’t need your money. Joe said the more you can show something real, the more likely you’ll be able to get a VC to invest in you. Stephen liked to ask how much of your personal investment is tied up in this business.
Someone mentioned an article published this week
Esther wrote the article. She was trying to do three things. She mentioned Fed Ex because it was a success. She tried to draw analogies between the computer industry and the rocket industry, how internet was started by the government and now is run by private industry.
Do you see small companies being bought up by Lockheed
Esther said “Or Disney.” Joe said that when people are being flown into space every day, then we’ll have reached the every day life. Stephen some times big companies will buy small a company for the products, and some times they’ll buy a small company for the engineering team.
Ken asked about the risk and insurance issue
Stephen said work things out ahead of time with lawyers. Prepare ahead of time for when someone dies, it is important to be sympathetic.
Ken followed up with how does that risk affect VC investing.
Esther thinks about it every day. VCs may even be waiting until after an accident.
Jerry Pournelle made the observation that the most expensive seats at NASCAR are those near where there is danger. We may be able to charge more money.
What do you look for?
Esther wants to see a good team. Stephen wants a good story, something that is easy to communicate and makes sense.
Clark's report
Rand’s report
First: Introduction
Overview: the agenda
Previous: Leik Myrabo on Beamed energy
Next: Rick Tumlinson
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Technorati tags: Space Access Venture Capital Funding
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