ROOM
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Astronautics
have some other value added expertise that can be
helpful to the company.
According to the Angel Capital Association, of
the 8.7 US millionaires there are 265,000 active
angel investors, and 15,000 belong to angel groups.
Angel investing can also be potentially lucrative.
Of the successful angel investment exits, the hold
period was 3.4 years, the investors more than
doubled their money with an average multiple of
2.6 and the internal rate of return (a measure of
the investments success indexed for the time it
was invested) was a whopping 27 percent.
While these returns may seem extraordinary,
they presuppose that the investor is picking
winners. In a portfolio of many investments, several
will yield zero given the high risk of early stage
investments going bankrupt. Consequently, angel
investing is a craft which rewards the experienced
and the knowledgeable, and certainly the fortunate.
NewSpace remains capital constrained. That is
to say, the formation and growth of companies
in the NewSpace sector is limited by its ability to
attract new capital sources to the industry. While
this constraint has been relaxed considerably in
the past few years it still remains an important
limiting factor to the industry’s future growth.
as private equity, the ability for a company to
go public with an IPO (Initial Public Offering)
remains nearly impossible.
Think of the life cycle of capital as a giant
flywheel. It must turn in one direction from
one stage to another continuously and without
skipping portions of the wheel - but at each
revolution (e.g. a public company exit) the next
turn of the wheel becomes easier. In short, a single
IPO could generate enough interest in a sector
to flood it with early stage capital, which leads
to more company formations, more later-stage
growth companies and ultimately another two or
three successful IPOs which then attracts more
early stage capital.
Within all these stages, perhaps the most
important is angel capital. Of 75,000 company
investments in the US in 2015, more than 71,000
were funded by angel capital. Perhaps even more
importantly, of the early stage investments,
roughly 32,000 of the 34,000 were funded by
angel investors.
Typical angel investors are high net worth
individuals who have been successful in another
industry and enjoy investing in starts-ups both for
financial gain but also because they believe they
The fourth launch of
Blue Origin’s New
Shepard vehicle before a
successful descent and
landing from a height of
101.0 km on 19 June 2016.
As the
implications
of the ‘mega-
set’ becomes
better
understood,
the amount
of capital
attracted to
the space
sector will
dramatically
increase
Blue Origin
