Having spent the day at SpaceX, it seems timely that […]

Having spent the day at SpaceX, it seems timely that the 𝑀𝑜𝑛𝑒𝑦 𝑎𝑛𝑑 𝑡ℎ𝑒 𝑀𝑜𝑜𝑛𝑠ℎ𝑜𝑡 podcast just came out: https://www.euromoney.com/podcasts/money-and-the-moonshot

I have comments in Vol 1 at:
4:55 The role of computation, with my Lunar Module AGC at our side
15:22 NASA’s benefit from commercial space

and in Vol 2:
7:09 Business and politics in the new space race
10:37 The influence of private capital
22:50 Moonshot investing
24:44 Humanity’s Greatest Hits

“A new Euromoney podcast series traces the relationship between space and the private sector, from the early Cold War state-funded model of Apollo to one in which venture capital backs the most interesting and visionary ideas.

Bank of America Merrill Lynch head of thematic investing Haim Israel calls the 2020s “the decade of space democratization”, and believes that the space market opportunity, from nanosatellites to space tourism, could reach nearly $1 trillion by 2030.

That opportunity is underpinned not by public markets, but venture capital. Steve Jurvetson, founder of Future Ventures and previously a founder of Draper Fisher Jurvetson, says: “The space industry has largely been one of private investment to date, so most of the exciting companies you can think of are not publicly traded companies, which is an interesting starting point.”

Jurvetson is a board member of SpaceX and the satellite imaging company Planet Labs (as well as Tesla), and works from an office in Los Altos, California, surrounded by a truly stunning collection of Apollo-era memorabilia. “There is no end, it seems, of venture capital firms tripping over themselves to invest in the category: more than 350 of them,” he adds This is a hockey-stick moment: Jurvetson says that in 2018, 114 venture funds made their first space investment, and that 70% of all venture investment in the space industry to date occurred in the three years to December 2019.

“We’re not going to purchase, own and operate the hardware, we’re going to buy the service,” NASA commissioner Jim Bridenstine said. “When we go to the Moon, we want to be one customer of many customers in a robust marketplace between the Earth and the Moon. “And we want multiple providers that are competing on cost and innovation so we at Nasa can do more than we’ve ever been able to do before.”

If we accept, then, that private capital is the most natural fit for space, that raises a host of other questions. Where is liquidity? How do investors get an exit? What sort of timeframe should they have, and is that materially different to other industries?

At Future Ventures, they tell investors they are putting their money into things that “if they succeed they will change the world, but are highly risky and take a long time.” They have a 15-year time horizon. “This is risk capital: the majority of things we invest in fail.” The firm leads with this blunt premise in its pitch deck: they’re investing in crazy things that, by definition, won’t have anything to show for it for years because they’re not liquid and nobody else has realized they’re good stories yet. This is how investors in space companies must think.”
— from https://www.euromoney.com/article/b1m08bbdhjy5gm/money-and-the-moonshot