On his blog a couple of weeks ago, Jeff Haynie wrote:
In the southeast US we need more meaningful dialog about what is happening… Sometimes, it’s hard to find out about who’s doing what.
So — my challenge to the local VC community – which I dearly respect: start blogging.
Here’s my public challenge. I’d like to see the following at least start a blog and post one meaningful article related to venture capital and what they’re interested in:
* Stephen Fleming, Chief Commercialization Officer, GT Venture Labs
* [four other names deleted]
This is not that “meaningful article.” Soon, I hope.
In the meantime… I find myself at the International Space Development Conference in Dallas (ISDC) and I’m fascinated by how much the “new space” industry has changed over the years. I’ve always said that the four most dangerous words in the English language are “It’s different this time”… but, maybe, this time, it’s true!
Here are my slides from the Space Venture Finance Symposium, but they were just a crutch; the real value of the session was Esther Dyson managing a brisk Q&A session with the audience. I’m being struck by parallels and differences between the space angel/VC market and the southeastern angel/VC market.
Both are out of the mainstream for most investors… an unusual market sector for space, an unusual geography for the Southeast. That can make it hard to get a meeting with investors who only want to invest in semiconductor deals, or deals in Silicon Valley.
For those who have found this blog from the Southeast who know nothing about the private space industry… a lot of rocket companies have wandered in the wilderness for decades now, and most have starved and died. The new generation is doing better. (Disclaimer: I’m an investor in several, including XCOR and Constellation Services.) What’s the difference, and what could the Southeast learn from them?
If you factor out the companies backed by billionaires (Virgin Galactic, Blue Origin, etc.), you find the thriving startups have found ways to eat the elephant one bite at a time. Instead of looking for $20 million in venture capital, they’re finding ways to cobble together multiple small sources of cash — SBIR grants, state tax credits, small amounts of angel money, and selling of engineering/consulting services — to keep the doors open and push their technology forward. At least one of these companies has now turned a profit, at least a couple are having acquisition discussions with larger players, and half a dozen look like they’re going to survive and thrive.
I like deals that can demonstrate competence by achieving intermediate milestones. It makes it a lot easier to raise the next round of equity — or maybe even avoid the need for a “next round of equity” altogether.