Starbridge Venture Capital invests in visionary companies, providing the resources to open new frontiers and transform existing ones
Intelligent Exposure to the Emerging Space Industry Experienced team. Access to best companies. Strategic portfolio construction. ●
Starbridge boasts a highly qualified, experienced investment team with a deep understanding of how the commercialization of space is changing the world economy.
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Starbridge has unparalleled space industry access and knowledge, providing investors with intelligent exposure to a diverse portfolio of companies with an emphasis on proven terrestrial markets.
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Starbridge constructs its portfolio to reduce risk through sub-sector diversification while creating strategic benefits to support other portfolio companies and the overall growth of the industry.
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Starbridge routinely provides its sector experience to other syndicating funds in order to improve the health of the industry. We sympathise with other funds attempting to pick just one or two space sector investments in order to fulfill a mandate.
STARBRIDGE VENTURE CAPITAL 3
Starbridge Overview Venture Capital for the 21st Century and Beyond
1. Thesis: A Mature Model, Optimized for an Emerging Industry 2. Space: Opportunity for Exceptional Returns 3. Investments: Sector Leading Companies 4. Team: Industry-leading Space and Finance Experts 5. Exit: Overcoming the Liquidity Challenge 6.
Appendices: A Closer Look at the Starbridge Advantage
STARBRIDGE VENTURE CAPITAL 4
Thesis
A Mature Model, Optimized for an Emerging Industry
A Trusted Investment Model Starbridge is committed to transparency, best practices, and reasonable fees Fund Size:
$75 million
Sector:
Dual-use space technologies
Min. Investment:
$500,000
Lifecycle:
10-year lifetime: 4-year investment period and 2-year extension
Fees:
2.5% on committed capital; Net invested capital in year 4; Drops by 0.25%/year starting in year 6
Carry:
20% Fees paid prior to year 7 will be deducted from carry and returned to the Fund as investable capital
STARBRIDGE VENTURE CAPITAL 6
Deal Strategy Starbridge is committed to transparency, best practices, and reasonable fees Initial Investment:
Seed: $100K - $1M Series A: $2M - $4M
Follow-on:
Preserve pro rata through Series D via follow-on, sister funds, and co-investments
Stage Mix:
30 investments: ~80% Series A and beyond; ~20% pre-Series A
Terms:
Board seat, 1x participating preferred, full ratchet anti-dilution
STARBRIDGE VENTURE CAPITAL 7
A Grounded Approach to Space Investing Broaden your portfolio: include the most dynamic emerging industry
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Space technologies are sold into a wide variety of developed markets. Starbridge will investigate deals across all verticals, building a diverse, but interconnected, portfolio.
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Starbridge investments are contingent on proven product/market fit in multiple markets.
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The portfolio will be constructed to help move the industry forward, stabilize supply chains for this and future portfolios, and mitigate concentrated sub-sector risk.
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All investments will have a viable strategy for liquidity within the Fund’s lifetime and Starbridge will work with the companies closely to ensure that liquidity happens.
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We will not invest in companies that are dependent on speculative space infrastructure, unproven markets, or Government agencies as the sole customer. STARBRIDGE VENTURE CAPITAL 8
Building the Right Portfolio The space industry provides investors access to multiple market verticals
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Building the Right Value Network Starbridge constructs portfolios to enhance relationships between businesses
1
Finding the Best Deals Exclusive space industry access provides unparalleled deal flow
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Starbridge includes former founders, CEOs, and executives of space and finance companies, which provides access to an unparalleled network of industry connections and high deal flow visibility across the world.
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The team’s uniquely deep understanding of the industry will allow Starbridge to identify, grow, and mature the companies with the highest capital appreciation potential.
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Starbridge partners with universities, accelerators, competitions, nonprofits, and industry associations, providing a continuous pipeline of potential deals.
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The team’s reputation within the industry puts Starbridge on a short and exclusive list of the most sought after investors.
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Investing at the Right Time Space industry expertise drives an optimized investment thesis
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We invest primarily in Series A rounds, and focus on companies that are approaching ‘the knee of the curve.’
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We know this market, and we know when to invest to maximize results, both for our portfolio companies and our LPs.
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In collaboration with our partners, we create unique tools that indicate when a new market opportunity is ready for growth. Asteroid mining may become a viable investment choice one day. The key is knowing when.
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Our experience with public markets and IPOs helps us understand when the right time is for an exit. Exits are nice but the key is knowing when.
STARBRIDGE VENTURE CAPITAL 12
Space
Opportunity for Exceptional Returns
A Growing Industry Today’s space infrastructure is a platform for tomorrow’s terrestrial market disruption ●
Space is a $344 billion established growth industry.
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The industry is enabled by a $5.4 billion launch services industry that is dominated by communication satellites and infrastructure.
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Sub sectors such as remote sensing, broadband, and IoT applications are experiencing significant growth.
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254 smallsats were launched between January and June of 2017, far surpassing the predicted 180.
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2,600 projected smallsat launches in the next five years
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SpaceX and India have reduced launch costs by 65% since 2012.
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SpaceX is one of the most valuable privately held tech companies ($21 billion). STARBRIDGE VENTURE CAPITAL 14
2016 Global Space Economy
“Engine for Growth: Analysis and Recommendations for U.S. Space Industry Competitiveness.” Bryce Space & Technology. September 2017. This chart is based on historical data and is intended for illustrative purposes only. It is not intended to be representative of future performance of the Fund or any particular investment. Additionally, this chart illustrates general market activity, industry or sector trends, or other broad-based economic, market or political conditions, and should not be construed as research or investment advice.
Unique Properties and Resources The resources of space continue to create disruptive products for terrestrial markets ●
The space environment has unique properties such as: microgravity, vacuum, near sterile environment, temperature near absolute zero, uninterrupted sunlight, limitless raw materials (water, metals, etc.), complete view of Earth’s surface and atmosphere, environment devoid of perturbing effects (wind, vibration, etc.).
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Working within the space environment generates technologies that create significant value here on Earth: ○ Health: infrared ear thermometers ○
Industrial Safety: fire resistant coatings
○
Technology: parallel computing, fiber optics
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Green Energy: advanced solar cells
○
Logistics: global ship traffic management
STARBRIDGE VENTURE CAPITAL 15
Reduced Barriers to Entry: Launch Reliable and affordable access means decreased risks and increased cadence
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Launch is a significant cost and risk component of any space application.
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Industry developments over the last decade have seen a rapid reduction in cost and risk, and an increase in cadence of launches.
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Declining launch costs are leading to increased demand, which in turn is leading to economies of scale, further lowering launch costs. Launch Cost: $ per Kg
$ 20,000
15,000
10,000
5,000
Shuttle
Ariane 5
Soyuz-FG
H - IIB
Long March 3B
STARBRIDGE VENTURE CAPITAL 16
PSLV
Falcon 9
Falcon Heavy
Reduced Barriers to Entry: Economies of Scale Cost reductions are enabling new business models
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While launch providers are significant enablers, the overwhelming majority of the value in the sector belongs to the applications that use them. Spacecraft build costs are dropping due to economies of scale, Moore’s law, mass production, standardization, and new manufacturing techniques.
Global Satellite Industry Revenue (2040) Other $109B, 10% Consumer Broadband $85B, 8%
Consumer TV $103B, 9%
“The demand for data is growing at an exponential rate, while the cost of access to space is falling by orders of magnitude.” – Morgan Stanley Research*
STARBRIDGE VENTURE CAPITAL 17
Internet $412B, 37%
Government $181B, 17% Ground Equipment $214B, 19%
Investments
Companies, Teams, and Markets
AirMap connects airspace authorities with the drone ecosystem to unlock safe, efficient, and scalable drone operations.
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Airmap is a leading provider of Unmanned Aircraft System Traffic Management (UTM) solutions. UTM is a general concept for allowing drones and other atypical vehicles to safely operate in and through the same airspace as general and commercial aircraft.
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Many of the same rules, technologies, and services needed for air traffic management apply to space traffic management, especially sharing of situational awareness information and avoidance of “non-cooperative” elements, e.g. space debris.
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Airmap has won several awards for airspace management contracts both in the US around the world.
STARBRIDGE VENTURE CAPITAL 19
BridgeSat is building a high throughput space-to-space and space-to-ground laser communications network.
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BridgeSat’s laser communications satellite hardware and ground station network can provide both inter-satellite data transfer and downlink capabilities that are inherently more secure and faster than existing RF-based systems.
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Due to the extremely tight beam and lack of beam divergence, laser communications are extremely secure since interception requires direct line of sight interference between senders.
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Laser communications also allow much higher data throughput at far lower energy costs. This is why several new high data throughput earth observations companies such as ICEYE plan on using the BridgeSat network.
STARBRIDGE VENTURE CAPITAL 20
Planet has built the largest fleet of Earth-imaging satellites resulting in a 7+ petabyte imagery archive being used by analytics firms across the globe.
â—?
Planet is the leader in optical earth imaging and data analytics capabilities. It not only operates three separate satellite constellations through its in house developed Dove network and its acquisition of Terra Bella from Google, it also provides a data archiving and analytics platform for independent analytics companies to quickly and easily build new solutions.
â—?
The company has been using recent capital raises to acquire various data analytics companies in a general industry rollup strategy that Starbridge expects others to duplicate. There is some suggestion that Planet may be considering an IPO.
STARBRIDGE VENTURE CAPITAL 21
Ubiquitilink is building a world-wide, last-mile connectivity solution for narrowband communications using nanosatellites in an innovative way.
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UbiquitiLink’s smallsat constellation will provide affordable last-mile communications directly to existing phones (and off-the-shelf IoT devices) for 99% of Earth’s population by building a continuous cellular BTS mesh network in the sky that closes a link directly to the phone or cellular IoT device on the ground.
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Trial agreements in place with carriers representing over 750 million subscribers. An agreement with Facebook to test in 2018 (2B subscribers). Independently lab tested by Orange.
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Positioned as a shared roaming provider. Sold through exiting cellular MNOs as either pay per use or subscription feature
STARBRIDGE VENTURE CAPITAL 22
Umbra Lab is developing synthetic aperture radar (SAR) microsatellites to deliver sub-meter imagery as a service.
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Umbra Lab’s synthetic aperture radar technology is not only able to fit within a microsatellite platform but is capable of 25cm x 25cm resolution. That additional resolution increases object recognition rates from 45% to over 95% which is fundamental to many earth observation business models.
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Umbra’s SAR capabilities extend to their ability to easily Modify the spacecraft to take advantage of different parts of the radio spectrum.
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The company is intentionally not developing data analytics applications but is positioning itself to be rolled up into a larger platform. By not building its own analytics capability it is positioned to attractive to any buyer.
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Axiom’s commercial space station will provide additional and expanded services at ISS and allowing a seamless transition to the Axiom station when ISS is retired.
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Axiom Space is made up of engineers and staff who have been responsible for the operations of the International Space Station (ISS) or the past ten years. They are using that experience to build and operate a commercial alternative that can one day replace the ISS.
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The new facility will make its services available to any nation or company able to pay. Current access to the ISS is limited to ‘partners’ who were involved in its assembly and even then slots are limited and may never be available. The company is already receiving revenue from nations looking to train their own astronauts for future missions.
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With commercial manufacturing, research, and tourism as Planned revenue streams, Axiom is an example of a good investment that lowers costs and enables capabilities for other Starbridge’s other portfolio companies
STARBRIDGE VENTURE CAPITAL 24
Made In Space is a space-based manufacturing company developing in-space 3d printing solutions and extremely high performance optical fibers.
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Established in 2010, Made In Space generates revenue through public and private technology development contracts that result in a large portfolio of advanced manufacturing IP. This round is the company’s first outside investment and is being used as the seed investment to begin bringing products to market from its technology portfolio.
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One such product is Made In Space’s space-made optical fiber, which is currently being developed on the International Space Station (ISS). Traction with customers such as Corning and Thorlabs. Projected $100M/quarter revenue by mid 2020s as fiber product augments transoceanic cables.
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Other lines of business include in-vacuum additive manufacturing, in-space spacecraft assembly/servicing, and printing and assembly of extremely large structures. STARBRIDGE VENTURE CAPITAL 25
Team
Industry Leading Space and Finance Experts
The Right Team for Space Investing Starbridge is an industry-leading team of space and finance experts
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Diverse. The Starbridge team includes a diversity of science, technology, and finance professionals which helps prevent blind spots and increases understanding of global market conditions.
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Responsible. Team members are seasoned professionals with a long history of commitment to servicing clients. Starbridge prioritizes responsibility to its LPs and fiduciary duty to their interests.
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Reliable. The development of space is an exciting dream, and making that dream into a reality requires people who are measured, reliable, and consistent. Starbridge is that team.
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Practical. The team has deep in-house expertise in the financing, management, and technical aspects of space technology. We also have ready access to international networks of specialists from NASA, universities, and commercial markets to fill any knowledge gaps.
STARBRIDGE VENTURE CAPITAL 27
Steven Jorgenson, General Partner Seasoned finance professional with a decade of space investing experience, as well as proven returns in several traditional funds. Steven is an experienced investor in emerging space technology companies including Planet Labs, Airmap, Bridgesat, Planetary Resources, Ubiquitilink, and more. He navigated through hundreds of potential investments identifying the best opportunities through robust diligence and informed insight into management and industry trends. Throughout his involvement with the NewSpace industry over the last decade, Steven has worked to build a solid business and financial foundation through consulting, fundraising, direct engagement, and development of information and analysis tools for charting trends and timelines in this emerging growth sector. Previously, Steven was a portfolio manager at Woodridge Capital LP, Viridian Fund LP, and Ronin Capital, where he delivered consistent market-beating returns across a variety of funds and market strategies including fixed income, equity, and derivatives portfolios. Steven has worked on the Chicago Board of Trade (CBOT), the Chicago Board Options Exchange (CBOE), and was the founder of Fifth Point Advisors LLC, a Registered Investment Advisor company, where he built trusted, long-term, profitable relationships with clients through actively managed accounts. Steven has degrees in Bacteriology, Biology, and Business from UW-Madison where he achieved a solid foundational education in hard science and critical thinking skills, which he now applies to the challenges of space technology investing.
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Scott Livingston, General Partner Registered broker with experience in both public and alternative markets, and a successful track record of generating returns from emerging sectors. As CEO of Livingston Securities, Scott has completed over 150 public market transactions since 2011, and financed innovation across multiple emerging industries such as stem cells, longevity, regenerative medicine, genomics, nanotechnology, and aerospace. Scott specialized in helping small companies that are using nanotechnology to create new products gain access to capital, and helping larger companies understand how advances in nanotechnology will change their markets and how to benefit or avoid risk from these new technologies. Helped institutional and individual investors identify investment opportunities from advances in scientific discovery at the nanoscale. Previously, at Lehman Brothers, Scott covered nanotechnology for institutional and individual investors in the Private Investment Management Division at Lehman Brothers. Before that, at SG Cowen Securities, he served as a Director in the Private Client Group where he was a member of the Chairman's Club from 1998 to 2000 (the firm's highest honor for private client management). At SG Cowen, Scott analyzed and managed investments in emerging technology trends, including genomics, Y2K preparedness and defense technologies.
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Michael Mealling, Chief Operating Officer Veteran business and engineering futurist, with a decade of experience in both space and finance. As the Chief Technology Officer of Seraph Group, Michael completely rebuilt the management company back office which included evaluating and verifying transactions for 306 LPs, $46m AUM, 8 funds, and 78 deals going back to 2003. Additionally, Michael analyzed technology investment deals in companies such as Kairos, Planetary Resources, Catavolt (exited), and Boom Supersonic. Previously, Michael was Chief Financial Officer at Masten Space Systems, a rocket company that he co-founded in 2005. Michael managed all non-engineering tasks for the company (sales, marketing, finance, etc.), including raising $1M in seed financing. During his tenure at Masten, the company won the NASA Lunar Lander Challenge in 2009, and won and administered a DARPA SBIR award in 2008. Michael is also President of the Waypaver Foundation and CEO of the Moon Society, where he is rebooting both organizations. He increased membership by 20% within two months, developed partnerships with US and European Governments, and is using those partnerships to create industry tools for space sector supply chain analysis. In 2011 Michael graduated from Georgia Tech with an MBA. During his undergraduate degree at the same university, he built the campus web infrastructure in 1994 and one of the first dozen websites in the world outside of CERN in 1992.
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Advisors Jeff Hoffman Astronaut & MIT Professor Five Space Shuttle flights. 1000 hours of Shuttle flight time. Initial Hubble repair mission. Research includes spacesuit design and human/robotic systems design. Ph.D Astrophysics, Harvard
Cheryl Nickerson The Biodesign Institute, ASU Co-Director, Center for Infectious Diseases and Vaccinology. Research flown on Shuttle, ISS and SpaceX. NASA’s Exceptional Scientific Achievement Medal. Ph.D, Louisiana State University
Harry Partridge NASA Ames Chief Technologist 190 papers on computational chemistry. NASA Senior Technology Officer & Game Changing Technology Director. Ph.D, Indiana University.
Neal Pellis USRA Director of Life Sciences Senior Scientist - Space Life Science Directorate, Johnson Space Center. Director, Surgical Immunology Lab at M.D. Anderson Cancer Center. Ph.D, Miami University
William Thornton Brigadier General, USAF (Ret.) Director of Air, Space and Information Operations Materiel Command. 412 Test Wing Commander - Edwards. Rand Adjunct & White House Fellow. VP of Cybersecurity for E*Trade. MS, National Defense University
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Management Team
Lindsey Yee – Senior Associate Space business and technology expert with deep international networks and access to diverse startups.
Howard Kuo – Principal, Starbridge Asia Experienced energy storage and semiconductor manufacturing executive in the US, Taiwan, and China.
Gary Bickford – Venture Partner Inventor, engineer, entrepreneur. Expertise in analyzing the technical, economic, and business viability of potential investments.
Rich Godwin – Venture Partner Economist and serial international entrepreneur with several decades of experience building space companies and multiple successful exits.
STARBRIDGE VENTURE CAPITAL 32
Exit on Time
Overcoming the Liquidity Challenge
Overcoming the Liquidity Challenge Don’t let the old VC model tie up your funds for years longer than expected
M&A vs IPO, 1992 - 2009 M&A
●
Typical 10-year VC funds suffer from a lack of liquidity due to the efficiency of private equity and the regulatory overhead of public markets.
●
This problem is acute in emerging sectors that lack a mature M&A path.
●
IPO
92
This issue can tie up investor’s capital in funds that last a decade beyond the intended lifetime. Starbridge can address this problem with a multipart liquidity strategy.
94
96
98
00 02
04
06
08
Fund Age in Years
“I have funds that are old enough to drive!” – Top Tier Capital* * http://blog.ttcp.com/fund-old-enough-drive/
STARBRIDGE VENTURE CAPITAL 34
≤ 10
11-12 13-14 15-16 17-18
≥19
Portfolio Company Liquidity Regulation A+ (mini IPO) or Business Development Company (BDC)
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Reg A+ offerings allow early stage companies access public equity markets with significantly reduced reporting and regulatory burden than a traditional IPO. ○ Reg A+ has easier “test the waters” provisions. ○ Reg A+ includes state Blue Sky pre-emption. ○ Reg A+ has the same 10-Q, 10-K, and annual audit requirements as a typical IPO.
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Starbridge has actively explored the option to convert this Fund and/or subsequent funds into a publicly traded Business Development Company (BDC). Conversion to a BDC would represent a liquidity event for the Fund in its entirety rather than waiting for individual exits of portfolio companies.
●
Our partnership with Livingston Securities gives our portfolio companies up-to-date market intelligence on when and how to best use these liquidity tools, in addition to traditional exits. STARBRIDGE VENTURE CAPITAL 35
Starbridge Overview Invest in the 21st Century and beyond. 1.
Thesis: A Mature Model, Optimized for an Emerging Industry
2.
Space: Opportunity for Exceptional Returns
3.
Team: Industry-leading Space and Finance Experts
4.
Exit: Overcoming the Liquidity Challenge
5.
Appendices: A Closer Look at the Starbridge Advantage
STARBRIDGE VENTURE CAPITAL 36
Appendix
A Closer Look
Appendices: More Details for Inquiring Minds Appendix 1: Portfolio Appendix 2: Recent Industry Deals Appendix 3: Recent Industry Exits Appendix 4: Partnerships Appendix 5: Detailed content
39 39
Appendix 2: Recent Industry Deals
Recent Industry Deals Rocket Lab
xometry
Neurala
Carbice
Smallsat launch $75m Series D March, 2017 (~$1 billion valuation) Bessemer, Data Collective, K1W1, Khosla, Promus Ventures
Custom manufacturing automation $15m Series B Highland, BMW i Ventures, GE
Generic AI for autonomous systems $14m Series A January, 2017 360 Capital, BYU Cougar, Draper Associates, Idinvest, Motorola, Pelion, Techstars
Heat transfer/management $1.5m Seed July, 2017 GRA Venture Fund
Electric turbopump driven launch vehicle for smallsats
3D printing and automation technology with NASA
Developed autonomous navigation for planetary rovers
Carbon nanotube heat transfer material. DARPA SBIR for satellite heat management. Used in wifi components of set top boxes
Orbital Insight
Fleet
telluslabs
Kymeta
$50m Series C May, 2017 Envision Ventures, Balyasny, Geodesic Capital, ITOCHU, Intellectus, Sequoia
$5m Series A April, 2017 Blackbird, Earth Space Robotics, Horizon Partners
$75m Series D March, 2017 Bessemer, Data Collective, Endzella Eny, K1W1, Khosla, Promus Ventures
$73m Venture Round, March, 2017 Bill Gates, Intelsat, Kresge Foundation, Liberty Global, Lux Capital, Osage University Partners, SPARX Group
Combines satellite imagery, third party data, and machine learning
Internet of Things sensor backhaul network
Earth observation based predictive analytics for agriculture and industrial monitoring
$217m raised total. Phased array beam steering satellite antennas.
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Appendix 3: Recent Exits
Recent Industry Exits
Data analysis to help farmers determine yield-limiting factors in their fields
GIS and mapping services
$4.3M of seed investment
Acquired by Uber in 2015 for an undisclosed amount
5 satellite medium resolution earth observation platform
Earth observation platform founded in 1992
$22M in venture financing
IPO in 2009 for $279M
Acquired by Planet Labs in 2015 for an undisclosed amount
Acquired by MDA in 2017 for $2.4B
Satellite broadband
Inflatable Satellite Antennas
$206m in venture financing
One undisclosed seed round from In-Q-Tel
$52.2M in venture financing
Acquired by Monsanto for $930M in 2013
Satellite and satellite-cellular terminals,
Satellite Internet backbone services
$12.3M in venture financing in 2002
$13.1M in venture plus $1B in private equity financing
Acquired by Orbcomm in 2014 for $130M
Acquired by SES for $730M
Acquired by Viasat for $568M Acquired by Cubic for $232.5M
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Appendix 5: Partners
Partners Starbridge is partnering with incubators, public technology transfer programs, and other investment groups to source/syndicate deals and provide support for portfolio companies
gener8tor
This list does not include confidential partners or partnerships in active negotiations.
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Appendix 5: Detailed Content
2016 Space Economy At A Glance