Spaced Ventures founders Aaron Burnett and J Brant Arseneault have a dream: to help bring humans to space. And they’re doing it in five and ten dollar increments.
Following on our earlier coverage of the Seraphim Space Investment Trust, there’s been more news on efforts to help retail investors get involved with space. One of the most interesting moves in this direction is being made by the recently-launched Spaced Ventures. Their goal is to bring equity investing to space, which could allow for small investors to make safe and limited investments in bringing space startups to life.
Crowdfunding, but no equity
Traditional crowdfunding on sites like Kickstarter promises goods and services to backers when the project is complete, but specifically doesn’t promise equity. Until recently, none of these platforms have been allowed to offer equity, due to the high default rate of early-stage companies and regulatory policies requiring that only “accredited” investors (those with sufficient wealth and income) should be investing in private firms.
Since very few space companies have gone public, that’s a big problem for people aiming to get into space-focused investment. Seraphim CEO Mark Boggett said that the current space rush is only one of multiple trillion-dollar opportunities in space business development. Limiting those opportunities to the wealthiest people would be, as Arseneault said to SpaceQ, “yet another way that the rich get richer and the poor get poorer.” Traditional crowdfunding also doesn’t really work for capital-hungry space startups with long time horizons.
But, now, things are changing. Carefully regulated and restricted opportunities for equity-granting crowdfunding campaigns have been appearing over the last five years. In the United States and some other countries, retail investors are being allowed to provide a small amount of support to startups, and to receive a small amount of equity in turn.
Dreaming of space
Enter Arseneault, Burnett and the team at Spaced Ventures.
Arseneault heads up a variety of companies related to space investment, running the gamut from an upcoming business hatchery named 10mK (10 million Kelvin) to a space-focused fund named Gravity Management. He’s got Wall Street experience, but had spent his youth dreaming of space, leading to his education as an engineer and his application to be an astronaut for the Canadian Space Agency (CSA).
He didn’t get in, but the dream remained. When he decided to pivot back to space, he expected to put his engineering skill to work, but his conversations with space-sector experts (like former CSA astronaut Col. Chris Hadfield) convinced him that he could leverage his financial acumen to help space-focused companies grow.
Burnett, meanwhile, had a familiar “bolt from the blue” moment. He’d also built up a career in business and marketing, helping to build up startups and at least one Fortune 500 company, and had his interest in space catalyzed by the dramatic landing of the Falcon Heavy boosters in 2018. After he saw those boosters land themselves, he knew that he had to get involved, and shared Arseneau’s interest in fintech enterprises.
Spaced Ventures was a natural fit, and as Arseneault said in a conversation with SpaceQ, the goal is to “democratize” space investment by finding ways to allow regular people to invest money in space companies.
Spaced Ventures’ startup marketplace
Spaced Ventures accomplishes that by providing a marketplace for retail investors to back space companies in the startup phase. Retail investors provide seed funding, just like an angel investor would, and the company provides equity to the retail investor that is tracked and managed by Spaced Ventures.
The amount that any individual can invest is limited to what they can provably afford, and companies can only raise $5M USD a year. (Spaced Ventures itself has already raised $1.4M in seed funding.)
In the event that the company grows large enough to either get bought out or to go public, Spaced Ventures will either provide cash (in the case of some acquisitions) or stock (in the case of a Public Offering and some other acquisitions) to the space company’s backer. Arseneault said that making sure that process works is a key priority.
SV’s track record and future
Currently, Spaced Ventures has three different companies available for backing: a gas storage company named Infinite Composites; a materials creator called Cosmic Shielding Corporation that promises to “offer a comprehensive solution to the threats posed by space weather;” and Exo-Space, which creates hardware that “connects to imaging satellites and runs the raw image data through machine vision algorithms.”
All of these companies have not only been successfully funded, but have received between 175% and 550% of their initial goal, with hundreds of investors between them. While those are small numbers compared to Kickstarter, it does suggest that Arseneau and Burnett are tapping into a big market. Hundreds of startups are already going through screening by Spaced Ventures’ Investment Advisory Committee to ensure they’re ready for listing.
Right now, only American companies can be listed for regulatory reasons. Interestingly enough, however, Arseneault said that non-American investors will be able to join and invest very soon, after going through the same background check as Americans. He also said that they’re looking to bring Spaced Ventures to Europe and Canada, once regulatory issues are sorted out, so that Canadian firms don’t need to move to the U.S. to crowdfund on the platform.
And as for Arseneault’s dream of going into space? It hasn’t gone anywhere. He’s eagerly looking forward to the day when he can “visit a space station for a few months, then go to a Moon base for a few months.” A lot of other people feel the same way, and the opportunity is opening up for them to make a slight investment in making that happen.