The Narrative.

2015 was a breakhrough year for the space industry. A decade later, we see effects across company, investor and founder lifecycles. Those then manifest across C-level replacements and Second Acts.

A rare moment of clarity struck me earlier this year when I realised that there is a coherent model to explain what we see daily in the industry - in news, company announcements and board rooms.

So I’d like to give you an explainer - this is where we are with space companies in July 2025. This is a way how to think about your companies, investments, portfolios; your boards, investors and competitors.

2015 as a transforming year

I always think about 2015 as the year when newspace really took off. Two important things happened that year - in late 2014, Google bought Skybox Imaging for ~500M USD, marking the first exit of the new space era with meaningful cashout and a credible buyer and just a few months after that, in February 2015, Google and Fidelity invested 1B USD into SpaceX at 11B valuation marking the newspace race as officially started.

I’m not saying those were the necessary causes, but both events certainly acted as powerful catalysts to what was to happen afterwards. There were two apparent implications:

1. Company creation - using data from ASD-Eurospace (looking at Upstream and midstream only), in the few years post 2015, there is a spike of ~70 net new companies started in addition to the usual company creation rate. The result is that if you take a random stock of your favourite space companies, the chances are that a disproportionate number of them have been founded just after 2015.

2. Investments - from virtually zero before 2014 (the 2015 figure almost exclusively consists of the SpaceX Series G), the volume of global space investments are now largely settled around the 9B USD mark. So when we speak about venture capital in the space industry, it really started as a systematic effort after 2015.

Bryce Tech Startup Space 2023 Report, page 4, emphasis mine

Welcome to the consequences era

Every action taken comes with a reaction and today we are very much in the era of consequences. The transformative year of 2015 now displays across three lifecycles - the founder lifecycle, investor lifecycle and company lifecycle. Let’s try to break them down.

Investor lifecycle

The investor lifecycle is by far the most straightforward one. Complications aside, venture funds have typically 10-year horizons. Most space companies are venture-funded. Which means that 10 years after an investment, your investors will want their money back - which means that around year 8, they will (or should) be politely knocking on your doors asking, “Could I have my money back, please?”

So if there was a wave of new companies post-2015, there should be a liquidity wave coming our way - and if it's not, then a trouble wave will follow.

Through continuation vehicles, extensions and secondaries, some companies have a bit of a breathing room to sort out the liquidity issue - but some do not. Plus keep in mind that ~10 years ago the early dilutions were much more draconic. There is a European company with no obvious exit event on the horizon, with two early investors with solid ownership stakes coming to a hard stop with their funds looking for liquidity… fun stuff.

Company lifecycle

If you imagine the space startups founded in 2016 as a graduating class, the alumni reunion would give out a weird vibe with four relatively distinct archetype personalities. Some folks are incredibly successful from the start, a few losers on the wrong track from the get-go, a few late bloomers finally standing up on their feet and a few big shots trying to salvage the vague notion of past success but quite clearly on a downward trajectory.

When I speak to companies that have been around for a while, I try to ask two questions - “how is it going/how did the last year treat you?” and “what does the outlook for the next 12 months look like?” When things are going well, the update is usually filled with customer announcements/contracts/revenues/hardware/launches. When things are going poorly, the update is some vague variation of “things are going really well”.

From there, you can get into some form of consultant-like 2x2 matrix

• Good performance in the past, good future potential

• Bad performance in the past, good future potential

• Good performance in the past, bad future potential

• Bad performance in the past, bad future potential

And depending on where your company of interest/concern lies, there are some specific tools in your corporate development toolbox to maximise your outcome.

One company that suits for a shoutout here is Endurosat. From an outside point of view, the company is doing decently well (good past performance). Future potential is more difficult to assess without insider information, but as they have been around for ~10 years, I’d think it is time to start slowly looking for an exit. Well, apparently, Founders Fund has a different view and they assessed that there is much better potential ahead of the company and invested 50M USD. They are not the type of investor flipping companies for an exit arbitrage so they must have concluded that there is much greater potential for the company ahead.

Founder lifecycle

I consistently think that the human dimension of companies is underappreciated. The simple fact is that the CEO (& founder, ideally), is critically important for the company's success, but also operates on a limited time. Being a startup CEO is a 100 %+ commitment, and some founders can do this for an incredibly long time (think Luca Rosettini from D-Orbit, he is an absolute machine).

Most CEOs, realistically tho, are not and as we approach the 10-year anniversary, a lot of them start thinking - do I really want to sign up for the next 5 years? Am I still the best person to lead this company forward? In the stock of my life priorities, is this still the highest one for me? And notwithstanding, their boards and investors are asking the same.

…

So those are the three lifecycles - sometimes acting in concert, and sometimes there is a tension in between them. All of those are then paired with expectations, where they should be relative to where they are right now.

3 manifests

I’d say there are three + one observable effects of those lifecycles in action: C-level replacements, “Second Acts” and a problematic exit landscape.

An additional manifest to consider would be increasing the willingness of defence Primes to integrate startups into larger solutions - but I’m not sure the lifecycle framework is the best explanation and want to be mindful to not to force-fit too many observations on one framework.

Credit to Mike from Also Capital

C-level replacements

I wrote about this before. Empirically, this has been happening for a while now, with a dozen VC-backed companies reshuffling their C-level in the last few years. There are two contradictory forces at play - on one hand, founder-led companies typically outperform, on the other hand, to keep or to fire the CEO is often the only tool boards have as a blank check to communicate their satisfaction with a company's performance, as a timeless piece on the topic describes.

From the lifecycle perspective - a few things we would see typically happening: CEOs leaving on their own as the decade-long tenure takes the toll, boards replacing the CEO in hope of turning things around (can often happen closer after the 5-year mark as boards realize they have pretty much last window to turns things around within their fund horizons) and occasionally more creative solutions - keeping the founder in top-level to maintain culture/spirit/knowhow/key relationships but promote from within or bring in an external CEO to align with the future needs of the company.

Second act

*I borrowed his concept from a friend of mine

A big part of formal business strategy is about creating “strategic options” - the concept of the second act refers to the situation where a business, purposefully designed about a particular activity, decides to pursue a new one. This is a bit different from a pivot in that the company still pursues the original product/service.

I get really excited for Second Acts and you should too - from a venture perspective, second acts are super interesting because they provide for non-priced upside… something you did not know at the time of the investment and thus couldn’t price in but now is increasing the value of the company. This is particularly useful when the initial market of your venture isn’t venture-scale sized. For those ventures, pursuing second acts still allows to make a return possible.

Taking an industry observer’s view, it is useful how companies can reinvent themselves, in part because this often comes with M&A, change in supplier/customer/competitor dynamics.

The best example of a second act is probably RocketLab - from a microlauncher into an extremely successful space systems company. While Sir Peter Beck might argue that it has been the plan all along - at least for the first ~12 years the company was fairly > purpose-built< to deliver a functional launch vehicle so it took some non-obvious transition to become a holistic space systems company.

Another company that has mastered this is D-Orbit, which might be one of the few space companies that have gone through this reinvention process multiple times. From a d-orbiting device to an nr. one OTV player to Advanced Services to becoming a mini-prime and a mission as a service player.

Some companies manage second acts

• Internally, like Exotrail - from electric propulsion to OTVs fully done in-house

• Others go via an M&A, like RocketLab, which, as discussed above used ~6 acquisitions to become a space systems company

Coming back to the lifecycle theme, there is a specific moment where a second act comes in handy - if your founders are excited to continue and your investors are happy to (or need you to*) continue but the area you are operating in is declining/not growing. D-Orbit is again an excellent example… while they got at OK OTV business, it is not one that can be easily doubled year over year, so they needed to search for a new a new growth avenue… and found it.

If you are keen for a different example, think about Exotrail, or RocketLab, or what might happen to some of the groundsegment providers.

There is also a dangerous side to this magic aid - and this might be a good time to loop in my “bullshit gap” writing from the past.

We often see companies that raise too much money, either opportunistically or because that's the spending requirement of their venture, even if not justified by potential outcomes. In turn, those companies then need to market a larger vision to justify the initial fundraise. Some companies have managed to steer this in the past and close the execution delta/bullshit gap, some other companies are on the cusp - and some drowned in the vicious cycle of raising too much, inflated valuation, inflated expectation, never enough execution…

Exit puzzle

How many venture-backed companies in the space industry had a meaningful exit in 2024?

Two

GetSat (acquired by Thales) and Preligens (acquired by Safran)...

In 2025, we are looking a bit better, with two exits in the first half of the year: Voyager’s IPO at NYSE and Capella’s acquisition by IonQ. I’m not including the nonsensical iRocket SPAC.

Two things are simultaneously true:

1. There are no easy options for venture-backed companies' exits

• SPACs are unlikely to come back in the 2021 form

• IPOs are difficult - because they require at least some level of financials, valuation and maturity to work over a long-term, and the number of listed companies out there overall has been declining over the last 20 years.

• PE groups have been historically reluctant to acquire venture-backed companies within the Space industry

• Big tech has done no space deals in the last decade. Legacy primes have engaged in some transactions but those have been limited to a small number of select sectors and selling few divisions back and forth.

2. Those exits are still needed.

In the beginning, I mentioned the net 70 companies founded in 2016-2019 window. If only taking those, ignoring the base and assuming 40% (higher than traditional VC, space companies are like cockroaches) of them are still around, that means there are at most half of the space exits happening

The good news is that some exit avenues are opening up

• Regional stock exchanges (in 2024 the only space IPOs were in Asia Pacific)

• New primes (Anduril, Palantir), mid-tier government service providers and suppliers (think CACI, BAH, BlueHalo/Aerovironment)

• The IPO markets might be opening up a little

On the VC side - there are continuation funds, secondaries providing a bit of leeway. I personally still think that PE players could show a bit of creativity - with an estimated $3 trillion of European PE AUM, I think there could be 1-2B to make a platform acquisition of a few European space players.

That said - none of these are easy solutions. And as the investor lifecycle is expiring for dozens of space companies - it will be an interesting show to watch to say the least.

Recommendations

1. Read this book on how boards should work (a bit woke but still worth it).

2. When considering the future of a company - the one you own, work for, have invested in, compete with or hope to acquire - consider the company, investor and founder lifecycle, what it means and what might you be able to do about it.

3. If you’d like to discuss lifecycles in the context of your company, shoot me an email; those are my favourite conversations.