Conflicting perspectives in a world of space VC newcomer

Filip Kocian
6 min readOct 9, 2022

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A random picture of a rocket for a preview

I’m a venture capitalist de facto since early June, technically since September. I spent previous years analysing the market and transactions, so I haven’t started on the ground zero — but in my new role, I spend a lot of my effort on navigating and making sense of the contrasting views on how to do the VC business. Today, I want to show how views can differ on five distinct topics.

In my work, I’m writing long, argumentative and heavily-sources reports/memos. In contrast, this writing series is a part of my effort to write more relaxed, opinionated texts — more prompts for discussion than definitive arguments.

As a prompt, I would like to show a slide Novica Mrdovic-Vianello presented at a session during European Space Week. To be absolutely correct — I agree with a majority of points on the slide and Novica has helped me every time I asked for it. Tho, I think, it shows how even the foundational points for one can differ from the thought leadership of other VCs.

To note, this article is written on a basis of hundreds of conversations — should you think it is about you, it probably isn’t.

A photo of a public slide; author: Novica Mrdovic-Vianello; presented during EUSW, 5th OCT, “Cassini Overview”

Startup Valuation

It is actually the first point on the slide extended — yes, startups definitely should have a clue of its value, but taking it further, should they suggest a valuation to investors?

Basically, I know startups offering a valuation — and I know VCs finding it insulting. That's for the two sides of the battle — and the middle ground? This topic is perhaps the least controversial — in reality, startups may not suggest a valuation, but knowing the money to raise and expecting a percentage to give out, it evens out. Plus, except if you are Adam Neumann, valuations at least at the early stages don’t differ that much — so either way you end up in a somewhat expectable range.

Exit Path

As I spent way too much time on Twitter — mocking founders aware of the exit options is an especially popular genre of the VC subtwitter. In summary, some suggest that if you are aware/considering exit options as a founder, you are not fully into building a publicly traded unicorn business — which is the only ultimate VC game. This btw relates to the third point from the bottom of the slide. Contrarily, this slide shows the said importance of being aware of the exit option.

I believe, again, there is a pragmatic dimension to this argument. There are many reasons for larger companies to acquire (which is supported both in theory by maximizing ROIC and in practice by the investment appetite currently on the market). Given the resource-heavy space industry, having a chance to deliver on a vision under the roof of a larger and well-resourced company should be a considered option. Thirdly, the CEO indeed has a fiduciary responsibility and as such, the option to be acquired should be legitimately considered along these lines.

As a side note, there are stock exchanges allowing entries at much lower valuations than we would see in the US — examples could be Australia or some markets in Europe — which opens yet another exit option, to be discussed sometime in the future.

NDAs

I will go over this briefly, but you surely can expect varying opinions from VCs on signing NDAs. As a friendly advice, if you are desperately looking for cheap engagement on Linkedin or Twitter, bringing up the issue of NDA can quite surely deliver it.

VC Team structure

The issue — I know (many different) VCs being criticised by (many other) GPs/LPs for a lack of technical expertise in-house — citing arguments of opportunism and lack of understanding of the market. From the other side, the reasoning is that holding too much technical expertise is unnecessary and expensive — and can be replaced by the well-occupied board and on-call contractors.

I think the point is important to raise for founders to know what topics VCs think about and perhaps to smooth off the edges — in a sense topics may not be as radical as they seem.

Follow-ups

The issue is whether a VC fund should invest in multiple rounds of a company.

Person A could most likely ask, why to take money from a fund which cannot follow-up

Person B would most likely say, that they do only deals in a [stage], because not doing so results in signalling problems (if the VC from the previous round does not want to invest, who then does).

Person A may counter, suggesting that why not increase your ownership if the company is good

Person B could then borrow some arguments from here and play the discussion to the out.

Reasons

I have no ambition to take the dilemmas of experienced VCs and suggest I know the solution, although usually, I have a preference. Instead, I want to bring up several reasons behind this dynamic

Ultimately, there is not a single receipt on how businesses should be built. Assuming the VCs have previous entrepreneurial experience, they have seen different ways for startups to succeed (and fail); different investment dynamic scenarios; which will influence the perception of all the previously raised points.

Surely, I see the cultural differences between Europe and the US in the VC markets (I sadly have very limited exposure to APAC markets) — emerging on the foundation you would expect — fund sizes, market maturity and united legislation.

Lastly — I used to understand VCs as a very homogenous mass. Having more frequent discussions with VCs currently fundraising, LPs do indeed have a say in the investment decision and strategy. That is also the case for my Golem Ventures Space — our strategy is best-suited to our LP expectations — but for a majority of VCs around, it wouldn’t work.

Too often, founders can receive nasty reactions from VCs, for doing this or those “obvious mistakes” when in reality it is a debated topic more than anything else. VCs do their signalling, marketing, and some of them (not my personal experience tho), are incredible hypocrites. So, the conclusion — you are not (most likely) an idiot.

The way out

Being a VC is a full-time job. Following VCs — trends, valuation shift, GP movement, who is currently writing checks is equally a full-time job. It is in the CEO’s competence — although some work in perfect tandemnś with their COO/CFOs. That said, for smaller startups, I think there is no shame to take onboard a contractor consultant, who follows the trends, does an audit before going out asking for money and helps with the process, intros and closing.

So, two conclusions I want to raise

  • What may be presented as obvious can actually turn out a long-debated topic. “Everybody does it this way” is not an argument.
  • For smaller startups, there is no issue in bringing outside help to consult the fundraising process.

Amendment

There are a few more topics which I won’t develop upon, but surely would get you raised eyebrows from some VCs and a welcome smile from other ones.

  • Team structure — how many team members should you have at different stages? When is the time to hire a CFO? Is it okay to have a non-technical founder?
  • In the early stages, should the team have a regular job alongside the development? Across the board? When is the time to go full-time?
  • Should you actually take the VC money? (Here the answer should be overwhelming yes, the discussion is obviously much more complicated).
  • Is it okay to have a founder-couple? I must confess I’m sometimes rather sceptical, but Peter Platzer convinced me the other way around.

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Filip Kocian
Filip Kocian

Written by Filip Kocian

Partner at Golem Ventures Space, Prague-based pre-seed VC; analyst and consultant in the commercial space industry.