Angels Invest, Hope to Ascend

Katherine Mangu-Ward | July 2, 2007

Seemingly sane businessmen are investing in commercial spacecraft and seemingly sane business reporters are writing about it.

The deal between Boston Harbor Angels and XCOR Aerospace, believed to be the first investment by a group of angel investors in a commercial launch company, raised hopes that others will follow.

"This industry is going to explode or fizzle," said John Hallal of the Boston group. "If it's successful, people will look back and say, `These Boston Harbor investors are smart guys.' If not, it's not the end of the world."...

Since most space tourism angels are individuals who can only put up so much capital, companies often have to lure more than one to keep their business running. Observers say the XCOR deal is significant because it is backed by an angel network that can pool its capital.

Another group has been founded as well. They call themselves the Space Angels Network. And hey, if the the business opportunities don't pan out, it's a great name for a girl band, so the URL won't go to waste.

Comments

thoreau|7.2.07 @ 12:12PM|#

And hey, if the the business opportunities don't pan out, it's a great name for a girl band, so the URL won't go to waste.

I can just see them auctioning off the assets of the failed business:

"And the rocket fuel is sold for $500,000 to the gentleman from Pyongyang. Now, the next item up for bid is the rights to the domain name 'Space Angels Network.' What I really really want is an opening bid in the 4 figure range. Do I hear $1500?"

db|7.2.07 @ 12:40PM|#

This is nice and all, but was I a little naive to think that the government would let me invest in something like this? Read the criteria set out by SAN (mandated by the SEC):

Membership in Space Angels Network is by invitation only and is limited to investors who qualify as "accredited investors" under Regulation D of the U.S. Securities and Exchange Commission. According to Rule 501(a) the following qualify as "accredited investors":
Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000.
Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.
Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000.
Individuals or organizations who do not otherwise qualify as "accredited investors" may still support our activities as Space Angels Network sponsors. For more information, please contact us at [e-mail].


Well that's nice. I can be a sponsor, but I can't put up my own hard cash and hope for an actual payoff (share in a successful venture)? Simply because I don't make enough money or have a large enough net worth?

Are there organizations through which I can buy shares or get involved with space venture capital without having to be a millionaire first?

D.A. Ridgely|7.2.07 @ 12:43PM|#

Obvious parody lyrics:

Space angel,
Space angel
Will you make dough?
My speculation,
Who the hell can know?
I'm just a fool,
A fool investing in you

I funded you
'Cause I knew
The vision of your potential
I hope and I pray,
That someday,
Ill see some profit from my capital.

ed|7.2.07 @ 12:50PM|#

if the the business opportunities don't pan out, it's a great name for a girl band

No, it really isn't. It never is.

New WorldDan|7.2.07 @ 12:50PM|#

Hey, if you invested in the automobile 100 years ago, odds are, you'd have lost all your money. There were dozens upon dozens of car makers and most of them went bankrupt. It's potentially a new industry here. Most investers will lose money, but a few companies will take off. For every Google, there will be 100 pets.com.

|7.2.07 @ 1:16PM|#

New WorldDan is right. Businesses which transform society aren't always the most profitable. According to Warren Buffett (PDF), the list of American car companies spans 70 pages and 2,000 makes.

And of course, there's this quote of his:

As of 1992, in fact-though the picture would have improved since then-the money that has been made since the dawn of aviation by all of this country's airline companies was zero. Absolutely zero.

Robert|7.2.07 @ 3:09PM|#

Sure, I used to watch Space Angel cartoons on Sandy Becker's show.

|7.2.07 @ 5:23PM|#

Wasn't that like Clutch Cargo?

|7.2.07 @ 6:34PM|#

.. Space Angel cartoons were the highlight on my day in my youth .. one of my daughters even has the name of "Crystal" based upon Space Angel's sidekick ..

.. Hobbit

|7.2.07 @ 6:37PM|#

.. "of my day" .. sheesh ..

.. the Preview button is your friend ..

.. Hobbit

Jonathan Goff|7.2.07 @ 8:36PM|#

One important point to make is that while the total aviation industry hasn't turned a profit, there have been lots of individual firms that have. And investors generally invest in individual firms. While admittedly a lot of the firms go out of business, how many of those are the flakes and utter incompetents, and how many of them are companies with a good team, a good market, good technology? Good due dilligence can make a huge difference in increasing the odds of getting a good ROI for such industries.

Plus, I'm good friends with most of the founders of XCOR (whose shop is about a 5 minute walk from my shop in Mojave), so I have other reasons to be happy for him. Here's to hoping that MSS can eventually follow that lead....

~Jon

Doctor Gulag|7.3.07 @ 3:17AM|#

Crap. I thought the little picture was going to be their logo. I was ready to declare Best. Logo. Ever.