Space Angels CEO Chad Anderson said said space provides “the greatest opportunity for impact” because of both the critical technology that comes through space, like communications networks, | Courtesy of Space Angels POLITICO SPACE Let's make a deal: The space race hits warp speed among investors The firm Space Angels had four investors in 2007; now it has 250 and growing.

NEW YORK -- Establishing a set of players in the Pentagon focused solely on buying space assets could help the Defense Department tap into some of the smaller, innovative and oftentimes cheaper space startups, one space investor says.

“Having a dedicated group of people who look at this sector all the time who are aware of the new companies and capabilities...they can say, 'Hey, instead of just going to one of the big incumbents, we should cut in some of these new guys,'” said Chad Anderson, the CEO and founder of Space Angels , an angel investment firm based in New York that gives its members information to help them invest in space companies.


Anderson, who previously managed a $50 billion real estate portfolio for JP Morgan, founded Space Angels in 2007 for both practical and aspirational reasons. He saw SpaceX tear down the barriers to entry in a lucrative field and knew there would soon be opportunities for more entrepreneurial space companies to grow.

He also said space provides “the greatest opportunity for impact” because of both the critical technology that comes through space, like communications networks, and the so-called “ overview effect ,” in which people who visit space are often more determined when they return to Earth to solve conflicts.

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Space Angels, which has provided funding for rapid launch company Vector and lunar robotics company Astrobotic , now includes 250 members and has a long waiting list. While some are wealthy space enthusiasts who have wanted to be part of the space industry since watching the Apollo missions other as children, others are investors who just see a smart business opportunity.

Anderson also talked about how the government is driving private sector growth and why more people are wanting to invest in space during a recent interview in New York.

Transcript has been edited for length and clarity.

Why did you found Space Angels?

This was a matter of reading the tea leaves and seeing the different pieces come together... 2012 was the first year that SpaceX berthed with the space station...This was a really pivotal moment...and it was really about recognizing the barrier to entry coming down in this storied industry...It was this really off limits market, but very big and lucrative, sort of old fashioned, stuffy. We were just witnessing the barriers to entry come crashing down. You saw this wave of innovation and entrepreneurship come flowing in. That’s really why I got involved and why I dedicated my career to this.

The way Space Angels operates is we have an investment platform that we developed ourselves. Accredited investors can apply to be members. They go in front of a membership committee and they’re approved. When they're approved, they come onto the platform and have access to a wealth of information about investment opportunities. Space Angels goes out and does the leg work, going to conferences and events to establish relationships with all these incubators and universities. We source all of the deals, we screen all of the deals, we do all the diligence on the deals, then we make that available to our members.

Our members come on the platform knowing that if a deal makes it onto the platform, it’s been thoroughly vetted. We also put all of the information at their fingertips. It’s sort of like if you were the investment committee making decisions for a venture capital fund, this is the type of information you would be given. [It includes] everything you want to know about the team, the market, the competition, their business model.

Who are your investors?

All kinds of people...A lot of it is older individuals who have been successful in some other industry. They grew up watching Apollo and have been fascinated by space their whole life and now they want to find a way to get involved...That’s what I would call space enthusiasts. But there’s also people who are just noticing what’s happening...It’s exciting. There’s a ton of growth and a ton of opportunity.

With this increased access to space comes all these new markets as well...What are the opportunities if you land on Mars and you become the transportation, railroad, utilities, communications? What does that look like?

These are really, really, really large opportunities and I think people are starting to see the opportunity as well. You’re getting a lot of people that...don’t necessarily have any affinity towards space, but see the opportunity. That’s been the big change over the last three to five years.

Are you seeing more people wanting to invest in space?

Yes. When we started this thing, there were four investors, [and they were] all space enthusiasts. It took a long time to grow that to 20, [who were] again, all space enthusiasts. Then things really started to tick up in 2015, 2016, 2017 and now 2018. The last four years, we’ve seen growth.

In Space Angels, we have 250 members. We cap it at 250, and we have a long wait list. We have new applications coming in all the time. We’ve done 10 to 12 deals per year over the last four years and invested $15 million or so through our angel fund...The interest in this is growing like mad. And it’s all happening so fast. Five years ago, no finance people really saw any opportunity in space and now everyone wants to start a space fund...The opportunity today is different than it was a year ago, even six months ago.

Is that growth driven primarily by the private sector or the government’s focus on space?

Both. A wise person once said to do business in space means to do business with the government...We’re in this place where space is transitioning to private [industry]...but there will always be a government role to play, whether it’s on the defense side or whether it’s on critical infrastructure like communications...There’s a big national interest in space, so the government will always be a key player.

What does the Space Force mean for investors?

A lot of this conversation around Space Force is not for me to comment on...but as investors, what’s important to us is there is...that space is only 10 percent of the Air Force budget...so are they giving space the attention it deserves?

There’s a lot of new capabilities. There’s 375 privately funded space companies out there. What new capabilities exist? Having a dedicated group of people who look at this sector all the time who are aware of the new companies and capabilities...they can say, hey instead of just going to one of the big incumbents, we should cut in some of these new guys...Having that expertise and context in house wherever it might be and helping to evolve the acquisition strategy would be really beneficial.

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