{"id":67540,"date":"2017-08-09T22:34:34","date_gmt":"2017-08-09T14:34:34","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/smallsat-experts-share-tips-on-managing-startup-finances\/"},"modified":"2017-08-09T22:34:34","modified_gmt":"2017-08-09T14:34:34","slug":"smallsat-experts-share-tips-on-managing-startup-finances","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/smallsat-experts-share-tips-on-managing-startup-finances\/","title":{"rendered":"Smallsat Experts Share Tips on Managing Startup Finances"},"content":{"rendered":"

Young smallsat companies seeking to build a successful business must be wary of the implications that come along with their investors\u2019 capital, warned a panel of experts at the SmallSat 2017 Conference. During an Aug. 8 discussion on the finance surrounding the small satellite market, Tyvak Nanosatellite Systems<\/strong> President and Chief Operating Officer (COO) Marco Villa cautioned young entrepreneurs to \u201cnot get money for the sake of just getting money,\u201d as investors are often pursuing their own agendas.<\/p>\n

Businesses that are beholden to the whims of their investors can crash and burn, Villa said, because one can become more concerned with making a quick return than developing a lasting business strategy.<\/p>\n

When a company is hard-pressed from the get-go to respond to an external entity about how it spends those funds, \u201cit doesn\u2019t give you a breathing room to make mistakes,\u201d he said. \u201c[Making mistakes], I believe, is a fundamental way to stay in business for a long time.\u201d<\/p>\n

Rather than accept a large sum of cash to rush a product to market, Villa recommended young companies take a more patient approach and spend time figuring out exactly the kind of business they want to be. This was Tyvak\u2019s approach to entering the smallsat market, he said. \u201cWe were not going to be defined by who was giving us the money,\u201d he said.<\/p>\n

Still, that\u2019s not to say a young company shouldn\u2019t be concerned about revenue. Stig-Are Thrana, head of Kongsberg Satellite Services\u2019<\/strong> Silicon Valley Office, emphasized keeping the value proposition in mind at all times and finding other ways to produce income as the company finds its footing. He drew an analogy to whisky producers which, as they wait for their whisky to age, can sell gin to stay afloat. \u201cMake sure the cash flow is there,\u201d he said.<\/p>\n

Tyvak adopted a similar strategy as the management team honed in on the best way to position the company in the market. \u201cWe started exploring everything,\u201d Villa said. \u201cWe started selling smallsats and components \u2026 knowing very well that was not our business.\u201d<\/p>\n

Ultimately, Tyvak settled on a model that centers around enabling their customers\u2019 own businesses, and specializes in creating custom satellite buses with unique capabilities based on the specific mission. But it took a couple of years for the company to reach that point, Villa said.<\/p>\n

Randy Segal, a senior partner at multinational law firm Hogan and Lovells<\/strong>, echoed Villa\u2019s sentiments, noting that all of the venture capital and private equity folks have a \u201ccertain Modus Operandi (MO)\u201d that guides their investments. \u201cSome want to invest where there is a government angle versus a commercial angle,\u201d she said. \u201cSome have a three-year horizon, whether it\u2019s the sale of the company, a merger or an Initial Public Offering (IPO).\u201d<\/p>\n

All of these different factors carry implications for the businesses they invest in, which can be either a blessing or a curse depending on how closely their priorities align with the companies\u2019 own goals, she said.<\/p>\n

However, Segal also pointed out that the relatively low capital required to enter the small satellite market has opened the door to alternative investment opportunities. One example is \u201cstrategic investors,\u201d which are generally larger companies in the food chain that invest in their smaller peers to get a toehold on the solutions they develop. \u201c[Strategic investors] can be a huge step up because they have all the infrastructure, the knowledge, and the know-how,\u201d she said.<\/p>\n

Lockheed Martin<\/strong>, for one, has already pursued such a strategy since 2007 with its Lockheed Martin Ventures division, which seeks to invest in early-stage companies developing technology complementary to its own. Lockheed Martin recently invested in Terran Orbital<\/strong>, Tyvak\u2019s parent company, as part of its effort to capitalize on more opportunities in the government vertical.<\/p>\n

Segal said she has also observed more \u201ccreative teaming and joint venture arrangements\u201d in the smallsat market, as companies with complementary products leverage each other\u2019s strengths. She highlighted Alphabet\u2019s<\/strong> sale of Terra Bella <\/strong>to Planet<\/strong> as one salient example, adding that \u201cyou can bet\u201d there\u2019s an agreement between Alphabet and Planet for access to the capacity.<\/p>\n

Given the massive influx of smallsat startups, the panelists noted there will likely be much consolidation, while some businesses will ultimately fall short. But they all agreed that describing the small satellite market as being in a bubble is inaccurate. \u201cChange is too quick to have 15-year satellites anymore,\u201d Segal said. \u201cI think smallsats are here to stay.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Young smallsat companies seeking to build a successful business must be wary of the implications that come along with their investors\u2019 capital, warned a panel of experts at the SmallSat 2017 Conference. During an Aug. 8 discussion on the finance surrounding the small satellite market, Tyvak Nanosatellite Systems President and Chief Operating Officer (COO) Marco […]<\/p>\n","protected":false},"author":1,"featured_media":67541,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-67540","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/67540"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=67540"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/67540\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/67541"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=67540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=67540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=67540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}