John Corcoran 11:51
right now, that’s been a big part of SpaceX is mission, they want to reduce that cost, which is why they’ve worked really hard to make reusable space vehicles and rockets that can be reused because it dries down the cost. Are there other companies that are that you can attribute that to as well? Well,
Aaron Burnett 12:11
there’s competition, it’s that’s that’s, that’s helping that you have Rocket Lab, you know, they just recently went public via SPAC merger and the reverse merger, I guess, technically. And they, they are, you know, doing some great things. Now, their cost is a little bit higher, but they’re dedicated. So you can get a little bit. When you have something that’s dedicated, more timely, you pay a little bit more for it, right, just like anything, SpaceX is more like jump on the train, it leaves at this time, good luck. get you close to where you need to be mainly to get yourself the remainder of the way, you know, that kind of stuff. So that’s kind of the way that works. Yes, you need to dry they were the first to publish launch prices, you know, publicly, you know, really starts to make people it makes it easier for people to plan it. But they’re, you know, they started crazy things like one of the people that we’re big fans of is Orbit Fab, they’re a gas station in space. So they there’s actually a literal gas station in space right now. Little One is mainly a test thing that they’re launching more and more, but they recently published the the price of what their fuel in space is going to cost. So that that’s, you know, it’s a it’s a very expensive account a gas, if you will, but it’s a you know, it’s actually there. Now it’s there and publicly available. And they did like what SpaceX Did you know, more than a decade ago? Yeah, hey, this is what it’s going to cost you and then it just really starts to accelerate more. So yeah, so there’s a lot of cool stuff that’s going on there.
John Corcoran 13:48
And how so you’ll you you’re doing all this work in 2019 2020. And you mentioned that one of the challenges for the space companies is there wasn’t early money to get these companies off the ground? Yeah, what that says to me is that it must have been hard for you to get this idea off the ground. Was it a struggle, especially, you know, you hadn’t come from working years in aerospace? So you have to convince them that Oh, no, I’m committed to this. I am knowledgeable. What was it like for you? What did you just take down family and friends? Where did you get? Initially?
Aaron Burnett 14:21
Yeah, and you know, I don’t come from like a crazy, you know, easily, you know, fundable family and friends kind of round you know, I’m not I don’t come from the, you know, the poorest family and friends either, but, you know, they weren’t going to be able to fund it all off the bat. One of the things that we that, you know, that you see is that SpaceX started a lot of people trying to get into the industry. So I was, I think quite lucky in the sense that there’s I wasn’t the only one trying to break into the space industry with a less traditional space background. It’s I brought in my co founder, Brandt Arsenault, who comes out of Wall Street 30 years On Wall Street. So he’s raised money for FinTech companies and all sorts of stuff in his background and how did you guys connect? So we connected over LinkedIn initially this is this was prior to me starting that we you know, I didn’t start the company bring him in. We started the company together. So I had this concept bubbling around for a while. But we met on LinkedIn it several months, maybe like six to nine months before COVID had. And so then when COVID hit the COVID, like closed lockdowns all happened like a week, after the new rules for CF came out as being proposed, and it read that really changed this, Hey, now’s the time, the rules are here that make it much more viable for space companies, including that they can now raise up to 5 million versus just a million prior. So now space companies need 5 million in many cases, right? Yeah. So that happens a say, hey, now’s the time. I think you and I are the right people do this, I’ll bring the marketing chops. And that good, you know, that kind of stuff. You bring the finance and fintech building and that kind of stuff. And we’ll go tell the story. And, you know, between the two of us, we figured we can make it happen. So that was
John Corcoran 16:13
it, your strengths bounce out each other. But the, this must have been a moment in time where you’re like, Woohoo, the rules change, this is gonna help us so dramatically. Boom, COVID hits, what was that like for you? Was it just like, high of high low of low? Or did you figure? Well, you know, a lot of the space companies are going to be exempt from these rules with the pandemic. What was your mindset, like at that time?
Aaron Burnett 16:38
Honestly, my mindset was when COVID hit was originally actually was a slight pivot. I had always thought the equity was where I wanted to land. But we were I was originally thinking I might try more of the traditional project based crowdfunding like Kickstarter, Indiegogo style, right? Okay. But maybe it’s a little easier said, because I don’t need the regulatory side. So COVID Hit made me say confront the fact that people giving money for something that doesn’t give them value is going to be difficult. So we and the new rules change. So those two things happening right at the same time, that month of April, was a crazy month, it’s like, okay, kind of, alright, let’s drop the old concept. I’ve been talking with my co founder for months and months at this time. And then we said, okay, all of this can combine, we think this makes sense. This will take some time to set up by that time, we’ll we’ll have COVID. Easily. Neither of us predicted how long it would take. But we also will, we didn’t predict was that everyone was going to be getting a little bit of a stimulus check. And instead of just I don’t know, paying for rent, they downloaded a Robin Hood app and started trading like crazy, because that’s what happened. Like, in June of 2020, people were just trading all of a sudden, yeah. And so that obviously was a nice tailwind for us. Because, you know, obviously, there’s there’s some overlap to people now becoming active traders, to people looking for active alternative investment opportunities. And who doesn’t love space? So those are two things that a little bit of serendipity a little bit of, you know, good timing, a little bit of maybe we knew what we are doing? Well, maybe we just haven’t been the right place the right time.
John Corcoran 18:21
And this is a bit of a side question. But I interviewed Howard Marks the founder of StartEngine. And in many ways, you’re similar to what they’re doing StartEngine is an equity crowdfunding platform. Do you see it as probably over the next five to 10 years, there’s going to be a ton of different spin offs that that become the StartEngine for space, the StartEngine for you name it?
Aaron Burnett 18:44
Yeah. You know, I’m biased, right? So yes, Howard, he bring them on again, or whatever, he probably won’t think that that matters. A lot of the quote unquote, incumbents, the industry is like, only seven years old. And in securities, that’s not a very long time. But it, you know, a lot of the incumbents will say, hey, it’s just about financial technology, you just have a good scale and a good community, that’s all you need. You know, my argument would be that investors on the investor side, they need focus, and they need to be able to trust it. It’s very hard for any investor to go actively search through hundreds of potential deals, one being, you know, a new kind of soda, another being a new kind of consumer app, and another being a space company, right? Those are all very, very different. And having all those people in at the same time, it’s kind of hard to really get any kind of focus. And so I think, in our society, focus and noise reduction is incredibly important. And so that’s I think, helps the investor side and I’m the founder side, I get to do stuff that no, no industry agnostic platform can do. I am going to, you know, the International Aerospace Convention, right. Because that’s all I do. That’s all it was talk to space companies all day. Bob, and space investors, right? Two things I, it just helps me to do that. And then to the point where now we’re we’re so focused. We have Northrop Grumman and all the all the big companies, the big aerospace primes, calling us to say, Hey, I’d love to look at, you know, what you guys are doing or whatever, you know, it’s all official, no one’s gonna put their logo on the site, but no one’s gonna say no to deal flow, right? So we get a lot of those in primes and all that other stuff, say, hey, we’d love to plug in with you guys. And in addition to founders coming on our site now, you know, they launched in that day, I just had another founder text me for another founder that lost him, I say, Hey, can give me connected to that group? Because I want to partner with them. Yeah, that’s pretty cool. I love it. Right? These are network effects that yeah, when there’s too much noise, it gets drowned out. And so you know, could always happen anywhere. Anything that’s public could happen anyway. But, you know, we have a society where there’s so much noise, we need some, we need some noise filtering to happen for us a little bit. So those network effects are really cool. And they really only happen when you can focus. And so I do think it’ll happen. Yeah, yeah, of course, super niche, or is it gonna be a little broader?
John Corcoran 21:12
So I live in the San Francisco Bay Area, Silicon Valley’s not too far away. Elizabeth Holmes, you know, Theranos, that was big news. Last couple years ago, as a platform, how do you decide what your responsibility is to make sure that a fair knows type of company doesn’t appear on your on your platform? Or do you say, like, Look, guys, we can’t be the arbiter. And so we have to be completely neutral.
Aaron Burnett 21:39
So you know, we look for things like fraud, but like things can you can people can dump, really smart people can dump lots of money into companies and still be wrong, right? You know, we work used to be a great example. Now, it’s like, Well, is it a good example. Now, he just gotta find it again. And, you know, it’s not necessarily like, again, it can, you can have certain people that are straight up fraudsters. And you can have certain people that aren’t now, one of the extra slight extra, I would say very slight extra layers of protection that the SEC requires for anyone doing the CF is you have to go through security checks, background checks, and all this other stuff that you won’t, don’t have to go through traditional VC at early stages, some of those VCs, once they get to really big numbers will start to force those things. But it’s not required for you know, that kind of thing early on, you can just go to anyone I’ve done it right, no one was doing a background check on me, other than maybe they were Googling, Googling, they were forcing me to give their social security number, put it against and, you know, a securities list or something. So we have to do that with all of our issuers. That’s just everyone every platform has to do. That’s a rule regulation requirement. You know, we also given the fact that all we do is space, we have, you know, the guy who built Starlink, version one for the first 1000 starlings, you know, his he and his team, a guy ran that he’s on our advisory committee, right, he goes and looks at deals, they, again, we can’t promise, there’s still a very good chance that one out of 10, or sorry, nine out of 10, or 19, out of 20 of these companies are just gonna outright fail, much less, you know, be some kind of crazy unicorn winner, but they help us because they’re smarter than us, these guys, help us look at this stuff and say, Hey, this is smells like snake oil or whatever, you should probably stay away. So we try and do several layers of that. And we can do that. Because of our focus, we can get much smarter people in this industry that have built real things that are flying in space, you know, to help us with that.
John Corcoran 23:42
And what’s the business model for you? Do you take equity? Do you take a fee? There’s a fee. I imagine a portion of the fee comes from the successful funding. Yeah, so
Aaron Burnett 23:53
we do 100% success fees. When you’re doing this SEC stuff when they’re, you know, sec FINRA regulated. You have to you have to do everything, you have to get it approved. Right. So we took that business model, so we take 8% Cash, 2% equity, so that’s a success fee, right? And the industry think we funders like seven and a half. And I’ll just make this all may be out of date. By the time people are listening to this. I don’t know people change some stuff. But you do have to, it’s like one fee. It’s posted publicly. FINRA looks at it, you know, that kind of stuff. So we take a cash fee and a 2% equity fee. So if they, you know, raise 100,000 You know, we get $8,000 cash, and of that 100 So the company gets 92, we get eight, and then 2% of the equity, so they would give us 2000 In that same equity that the investors get, so they really gave out $102,000 worth of equity. That’s the way that that’s a good example, the way that works. It’s all success fee based and we put a lot of effort into companies before they go live
John Corcoran 24:59
as well. Yeah. And then you have, you know, invested interest and then being successful after the fact after they’ve gone live on the on the platform. What is your pitch to the companies? When you I’m sure there, you sounds like you’ve gotten traction. I’m sure there still are other companies that you hear about through the grapevine that you’re excited about that you want to be on your platform, but they’re not. If you’re meeting with a founder, what do you say to them?
Aaron Burnett 25:23
You know, really, what we end up saying is just, we just talked about the numbers, because we can kind of see people from, you know, our list of users that are coming in that are from the aerospace industry or not. And you could say, hey, then we have hundreds of people, we can go and look at them, or talk to them. If you’d really like, hundreds of people from aerospace industry, it creates all these cool potential Trojan horses, for customers, vendors, suppliers, big primes, all that kind of stuff. That can help you in a variety of ways, in addition to just being fans of what you’re doing, right. Also, you know, space founders space, if you’re invested here in the industry, you have very, very rarely do you find people that are interested or working and put their years of their lives in this industry that don’t want to make space for everyone. It’s kind of the default function, right? Like, we’re trying to put humans in space, we should take everyone as much as we can there. So inherently, providing access to space and providing democratizing space is almost in spaces DNA, right? I mean, yeah, again, right? It’s billionaires going to space to kind of get a bad rap. But yeah, they’re not doing it. Like to try and keep other people out. Yeah, right. Yeah, they just happen to be the ones that can afford the checks for the cost right now. And so really, everyone likes the idea of bringing more people and giving more people access to space is a little bit of an altruism factor. In founders like that, they’d like looking, you know, and helping provide access to folks. So that’s not necessarily a hard sell at all. And you know, if we can help bring them money, and bring give access to people that care about the industry, it’s kind of a win win.
John Corcoran 27:09
It’s interesting to the the arguments beyond just getting people up into space, or going to the moon or something like that. There’s some arguments for ways in which this space exploration are helping us here at home, like SpaceX came out recently, with an announcement in partnership with T Mobile, where they’re Starlink is going to be giving people access to, you know, cell service in remote places, and they put out a video on it, it was entirely about like, you know, families where a family member is out in the middle of nowhere. And what if there’s a crisis or an emergency or something like that, this is the way that they’ll be able to communicate, because as it is right now, you can very well be outside of the cell service, you can be five minutes from your house and be outside of cell service. So it’s, those are interesting arguments as well.
Aaron Burnett 27:57
Yeah. And Apple just announced that they’re doing that now to standard and iPhone, I think starting iPhone 14, that emergency calls are supported by satellite, I forget who the satellite provider is, but not not not Starling necessarily, but there’ll be covered, right. So huge portions of the population, we here’s the thing, we kind of get bored of old news. But GPS has been totally changed our lives, absolutely aways who are and all those, I mean, they 100% rely on GPS, and other things. And so they kind of think of as internet stuff, but it all relies on that connectivity. Also, climate change is going to be heavily reliant because we like to act like ESG, and all this stuff, tracking all of the, you know, all of the ways our climate is changing is so easy to track, it’s already there. Well, we’ll just stick our finger in the sky, we know the temperature or something. The reality is it relies on a lot of these data, collecting remote sensing tools. And there’s there’s people in, you know, I forget and Arctic or the Arctic Circle, like they’re like launching balloons up into the sky. Today, they did it once. And they like get wind data. And there’s companies that were helping fundraise that are being able to look from from, you know, orbit and look and map wind three dimensionally just by looking at clouds, right. That’s an example of being able to track climate change and things like that. And there’s another company that just launched doing like buoys that work with satellite networks to get an understand all of the weather changes and things like having in the water, and all of the most of the oceans aren’t really mapped right now. Or we don’t really know what’s going on there. We kind of hope we do. So, you know, that kind of stuff, right? These are things that impact our daily lives impact our near term and immediate and longer term future in addition to Yeah, when we go to the moon, when we go to Mars, we’re doing all sorts of crazy cool stuff that impacts life on earth. All right, we have a fusion company on our site that is building Fusion Drive, right? That’s for going to Mars really. But, you know, more fusion that needs helium three is going to require more helium three exploration, more helium three, being transported back to Earth potentially right creates opportunities for more fusion opportunities and all this other cool stuff. So
John Corcoran 30:17
might have, you might have just answered this question, but I’m gonna ask it anyways, are there any other success stories from your platform so far that you know that you’re just excited about that you were able to be a part of?
Aaron Burnett 30:30
Yeah, I mean, you know, gotta remember which ones are publicly public knowledge and which ones are. But the so we have we’ve successfully funded closed and funded for companies on the platform. The one I like that one is just near and dear to my heart is the first one, they took a big risk with us. And they’re just doing some really cool things. They’ve got some substantially big contracts coming in, that aren’t, you know, all publicly disclosable. But big names of companies that you would have heard that they’re working with, especially in the aerospace industry, but they are, you know, it’s company called Exo-Space, no one was really giving them a chance. But Jeremy, the founder of Exo-Space, he says this, essentially any chance he gets he said before they went to the platform, we were making all the cold dials out. After we went to the platform, now the industry is calling us, right. So we love that. And it makes me feel so good. Knowing that we gave him some money. I think they raised 200,000 or so it’s publicly available data on this on the site. But you know, so we made some money off that too. Very, right. Not as much as you know, we need to survive, I want to raise every company $5 million, right? That would make him make me happy and everyone happy. But yeah, but it’s really cool to see these intangible external things that no one’s really planning on. But it’s becoming kind of a normal occurrence where big space companies are coming in and talking to these companies, because now they’re public. And they’re their stories being told in a way that makes sense. And it’s hard to understand pitch deck, it’s well articulated, and looks good, too. And so we we take a lot of pride in helping companies get
John Corcoran 32:12
to the Yeah, so I can see how it could give them more credibility going forward. These companies when they’re when they’re on the platform, I asked you a moment ago about what’s your pitch to the companies, for them to come on the platform. And I want to ask about the other side of that. What’s your pitch to investors? What types of what do you say to investors? And what are the right types of investors that you’re trying to attract to the platform?
Aaron Burnett 32:33
Yeah, so you know, long term, I’m trying to build a million plus person, community space investors, because ultimately, the way I figure it is that if I want to go to Mars, I’m more like a glamper, not a camper, right? So like, if I’m going to Mars, there needs to be a hotel and a brewery or something there, enjoy having to come back. I’m not, I’m not the first 100 people, or even the first, probably even the first 100,000 People like I’m like maybe the millionth customer or something, right. So that means we need a lot of innovation, if this is all going to happen in my lifetime. I’m an optimist. But I also realized that if we wait on NASA and SpaceX and a few other billionaires to figure this out, it’ll probably take longer than if we have 1000, SpaceX is out. So that’s really the math here, the simple math, I’m doing more, I need like, you know, 10x, or 100x 1,000x number of SpaceX is to get us to a point where we’re really moving quickly. So with that in mind, right, my pitch to, you know, the investor that’s out there is it’s really not that difficult. If you like space, and you invest, this is a no is a no brainer. We get people from Wall Street, right that their day job is, you know, hedge fund analytics. And they’re like, Oh, I saw this, oh, this is right up my alley, because I spend all my time on nights and weekends watching the expanse or whatever. But I can invest in real companies. And I’m an investor already, that tends to be the easiest sale because they already get investing. The harder sale is people that are just traditional, normal kind of space nuts and aren’t necessarily an investor, because they kind of have to selling investing the slower part or more boring sale than selling space. Right? So for us, that’s really the kind of the sales pitch is pay for any investing to invest in space. Yeah, why not? It’s a fun thing to talk about with your friends at the bar or whatever. If you’re not investing, think about the future space, you want to see and give them a shot. And here’s all the risks associated with investing. Here’s how that works. Here’s what it takes. You know, here’s some educational materials, that kind of stuff.
John Corcoran 34:41
Yeah, yeah. But we’re almost out of time, but I know that you mentioned that. By the time this goes live. You will have already announced a initiative that you are coming out with you’re petitioning SpaceX for a public allocation of stock Coming to them basically saying we’ve got lots of people on our platform that would like to have a public allocation. I love SpaceX. I am a big fan of Elon Musk and his companies I bought shares of Tesla and 19 bucks a share on on its IPO day. It’s done. Okay. Why? Why would SpaceX though, take you up on that offer, though, and they’ve had lots of money coming at them?
Aaron Burnett 35:21
Yeah, that’s great. They don’t need the money, right? That’s the thing. You know, normally space company, we’re going to say, hey, you need the money. It’s a no brainer, right? This would this would really be because Elon, or whoever the decision makers are making this decision is they want to truly include as many people as they can, and this and he’s, you know, this isn’t like a new thing. It said that Elon said that the past they want many people involved as possible. But SpaceX is a is a long term vision. It’s not really a public IPO type of company.
John Corcoran 35:55
I believe he said that he wouldn’t he doesn’t want to take a public. Yeah, exactly. Right. So
Aaron Burnett 35:59
how do we convince him to say, Hey, bring on your supporters who believe in your 1030 year vision, and aren’t worried about making a quick buck, they just want to be a part of this. But once they are a part of this and invested in this, they can all share in that success, right? Because there will be an ultimately long term success of some kind, right? So yeah, that’s really that part, right? And say, hey, we have 1000s of people that are interested in this, that have raised their hand that have said, I would put some money in let’s make that happened for those folks and, you know, make a stand and essentially showcase that space is for everyone. And the most exciting and the most interested private company, much less space company. I think, certainly every private investor would like likes a Pete would want a piece of SpaceX. So the most exciting opportunity, you know, giving a piece of that to the public in a way that’s accessible to anyone that’s, you know, even non millionaires, or non accredited investors.
John Corcoran 36:58
Right? Yeah, that’d be very cool. Well, I hope it’s successful. Aaron, I hope the whole whole company is successful. i It’s really exciting to me. Love hearing about your journey. Where can people go to learn more about what you guys do?
Aaron Burnett 37:11
Yeah. So check out our site, it’s spacedventures.com this space of the D. You won’t remember it right off the bat. But eventually it’ll stick in your head because we’re the only one with the space with the D spacedventures.com. If education materials, did actual deals out there, you can go check out all companies, all sorts of cool stuff. Very cool.
John Corcoran 37:31
Aaron. Thanks so much.
Outro 37:32
Thank you for listening to the Smart Business Revolution Podcast with John Corcoran. Find out more at smartbusinessrevolution.com. And while you’re there, sign up for our email list and join the revolution. And be listening for the next episode of the Smart Business Revolution Podcast.