The fund focuses on the collision of healthcare and technologyRead more...
Space Angels Network has invested in companies like Planet Labs, Planetary Resources and NanoRacks
There has been a big debate over the last few years over whether the Series A crunch is real or not.
What everyone can agree on, though, is that there are definitely more seed and early stage funds now than ever before, and more people willing to give money to young companies looking to make it big.
But just who are these funds and venture capitalists that run them? What kinds of investments do they like making, and how do they see themselves in the VC landscape?
We're highlighting key members of the community to find out.
Previously, Landon led Spaceflight Program Development at Space Adventures and he worked as an engineer and project manager for Boeing Satellite Systems where he led the design, manufacturing and testing of commercial communication satellites.
Landon holds a bachelor’s degree in Engineering-Physics from Embry-Riddle Aeronautical University. In 2013, Embry-Riddle appointed him to the University’s Industry Advisory Council to advise the school’s Commercial Space Operations degree program.
He holds a master’s degree in Aerospace Engineering from the University of Southern California where he serves on the Department of Astronautical Engineering Advisory Board. He also holds an MBA from Harvard Business School and was an Arthur Rock Entrepreneurial Fellow.
VatorNews: What is your investment philosophy or methodology?
Joe Landon: We are the world’s first truly global, virtual angel network focused on a specific industry. We identify promising companies, perform extensive due diligence, negotiate terms, and invest through a single company fund. That way we leverage the strength of our network, while not crowding a company's cap table. You can think of us as a fund that brings deals to our LPs and they decide whether or not they want to invest. Because of that focus, we are able to identify the best deals and leverage our network to bring real value to entrepreneurs and help them realize their vision most efficiently.
We are Seed and Series A focused, so the right team is critical. People still generally assume that space is hugely capital intensive, with long technology lead times. But it really depends on the type of company. What we're looking for is similar to what most early-stage investors look for, a near term path to profitability and line of sight to an exit in 5-7 years. Space companies are big on vision, but we're looking for the companies who's big bold vision is their guide star, but who have figured out a way to make money in the near term.
VN: What do you like to invest in? What are your categories of interest?
JL: We are specifically focused on the commercial space industry. This includes large existing markets that are being disrupted like satellites and launchers, as well as entirely new markets like human spaceflight, microgravity research, space habitats, space resources, and space energy. There are a number of VCs who have started to show interest in satellites and launchers, but the truly market creating ventures are still the realm of angels.
VN: What would you say are the top investments you have been a part of? What stood out about those investments in particular?
JL: XCOR Aerospace is developing suborbital, and eventually orbital, spaceplanes. This is a bootstrapped startup that is competing with Virgin Galactic. They are making a lot of progress and expect to be flying soon. We were in on that deal from the very beginning.
Planetary Resources has a bold vision to mine asteroids, but also has a very practical plan to address existing markets and fund their technology development with revenue. We were also a very early investor in Planetary Resources.
NanoRacks is another fantastic company, which facilitates experiments on-board the International Space Station and will also launch your nanosats.
And Planet Labs is a fantastic company. Literally a San Francisco garage startup a few years ago, they now build and operate the largest constellation of satellites in the world and are providing an unprecedented amount of information about our planet.
VN: What do you look for in companies that you put money in? What are the most important qualities?
JL: We are Seed and Series A focused, so the right team is critical. People still generally assume that space is hugely capital intensive, with long technology lead times. But it really depends on the type of company. What we're looking for is similar to what most early-stage investors look for, a near term path to profitability and line of sight to an exit in 5-7 years. Space companies are big on vision, but we're looking for the companies who's big bold vision is their guide star, but who have figured out a way to make money in the near term.
VN: What kind of traction do you look for in your startups? And can you be specific? Are you looking for a number of customers or order volume?
JL: Nothing beats customer traction. If people are willing to pay for your product, there are lots of ways to get your tech developed and tested in space through our network of partners.
VN: Given that these days a Seed round is yesterday's Series A, meaning today a company raises a $3M Seed and no one blinks. But 10 years ago, $3M was a Series A. So what are the attributes to get that Seed round? Since it's a "Seed" does it imply that a company doesn't have to be that far along?
JL: One of the things, since we are so focused on this industry vertical, is that we have to be flexible with companies. We are member driven, and some are looking for earlier stage than others. Some want to invest very early on, some want to do later stage deals. We will go beyond Series A, in a one-off exception, if it's a good company doing a later stage round.
VN: What are the attributes of a company getting a Series A?
JL: Typically a space company raising a Series A will have a prototype and significant customer traction. This might sound difficult when you’re a space company, but there are an incredible amount of resources available to help you develop your technology and make connections to customers. As an industry-focused investor, we pride ourselves on our track record of doing just that for promising entrepreneurs.
VN: Given all the money moving into the private sector, I believe there's more money going into late-stage deals in 2015 than there was during the heyday, back in 2000, do you think we're in a bubble?
JL: If a bubble is defined as valuations being too high because of putting money into things, then I don’t think so. What we're seeing is companies becoming very successful and valuable, but then remaining private.
It's really interesting that we have dozens of billion dollar private companies, with no reason or motivation to go public. It’s not because of a bubble, but rather because they can continue to raise money privately as they grow into mature businesses.
VN: How does that affect your investing?
JL: It really doesn't impact us at the seed stage. There is a question about liquidity. We do think about that, because we do want to be able to take profits if a company is really successful. We are still going to invest in great companies when we see them, and it’s impossible to predict if it's going to be a $10 billion company that will remain private.
One of the great things about a network like ours is that we can make a market amongst ourselves. With 100 members, and growing every day, there is always someone who is willing to provide liquidity if it’s a good deal.
VN: Tell me a bit about your background. Where did you go to school? What led you to the venture capital world?
JL: I started my career as an aerospace engineer. I studied engineering at Embry-Riddle Aeronautical University, which is an aerospace focused school, and then I worked for Boeing in Los Angeles. I worked on big, hundred million dollar commercial satellites. I then went to USC for my Masters in Aerospace Engineering.
I left Boeing to attend Harvard Business School and got my MBA, which I used as a catalyst to switch from engineering to the business and finance side of the space industry. I also found it more interesting to be involved with entrepreneurial companies. I also saw a big opportunity. At the time, the commercial space industry was populated almost exclusively with technical people, so I saw an opening for someone with business training to be a leader in the industry.
VN: What do you like best about being a VC? What makes you excited?
JL: For me I get to geek out at working with cool space companies all the time. I get to meet very talented and ambitious entrepreneurs and to help them. I’m very passionate about helping the space industry succeed because I feel that it is so important to the world to expand economic activity into space and to take advantage of the resources in space.
VN: What is the size of your current fund?
JL: We are not a typical VC fund, nor a traditional angel network. We discover, evaluate, and negotiate the deal, then bring that deal to our members for investment. We have over 100 accredited member across the world and have invested in 29 companies to date.
VN: What is the investment range? How much do you put into each startup?
JL: Our average investment is between $250-500k. Sometimes that’s the entire seed round and sometimes co-investing as part of a larger round.
VN: Is there a typical percent that you want of a round? For instance, do you need to get 20% or 30% of a round?
JL: That is entirely dependent on the particulars of the deal.
VN: What series do you typically invest in? Are they typically Seed or Post Seed or Series A?
JL: We are truly Seed/Series A focused. We have invested in later rounds, but that is not typical.
VN: In a typical year how many startups do you invest in?
JL: We receive hundreds of applications for funding each year. Of these we only invest in a small fraction. We have invested in seven startups so far this year, and are currently fundraising for three more. With the increase in quality deals we’re seeing, we plan to close one deal per month in 2016.
VN: Is there anything else you think I should know about you or the firm?
JL: As the most established investor in the sector, we see the best deal flow, hands down. We are a compass for investors looking to understand the industry and make it easy to discover, select, and invest in the best space startups.
Support VatorNews by Donating
Read more from our "Meet the VC" series
MarketX recently launched Radiate Ventures to invest in fintech, deep tech, and vertical SaaSRead more...
Overwater Ventures recently announced it's $20M debut fund to invest in human and planet healthRead more...
Related Companies, Investors, and Entrepreneurs
Joined Vator on
Space Angels Network is a global network for angel investors, offering insider access to the emerging private space industry and sophisticated investment opportunities across diverse market segments, with the expertise and network connections to cultivate stellar returns on investment. We are the largest community of space investors and entrepreneurs in the world.
Space Angels Network utilizes a novel online investment platform that allows accredited investors to invest in private aerospace companies through Space Angels Network managed funds. Our platform combines industry-standard venture funds, with an easy-to-use web-platform that allows members to browse and evaluate fund investment opportunities, view investment profiles and sign legal documents. Our investors have insider access to investment opportunities, valuable intelligence providing context and understanding, and the ability to build a diversified portfolio.
We offer a new model of early-stage investing, which brings an unprecedented level of sophistication to angel investing, and unparalleled choice and alignment with our fund investors. We are focused on investment outcomes and cultivating the greatest return on investment, just like our investor members.
Joined Vator onJoe Landon is Chairman of the Board of Space Angels Network, a global angel investor group focused on financing early-stage aerospace companies. Aerospace engineer and Harvard MBA.