SPEAKER INTERVIEW
Melissa Fensterstock, VC, Material Impact
Hello Melissa! Could you tell us a little but more about yourself and what you are responsible for at Material Impact?
Certainly! At my core, I’m a science nerd with a few advanced degrees. I have an MBA from Harvard Business School, MPhil from the University of Cambridge, and a BA in Neuroscience from Johns Hopkins University. I’ve been an operator for more than a decade, most recently as CEO of Landsdowne Labs, a spin out from Bob Langer’s Lab at MIT. I am intellectually curious and space is asbolutely fascinating and dreamy. I often find myself pondering the intersection of physics, philosophy, and religion, mulling over the origins of the universe and what lies beyond the eye.
At Material Impact I wear a lot of hats. These days, I am spending a lot of time company building with our portfolio companies, including Orbion, a hall effect thruster company based in Michigan as well as with other deep tech portfolio companies such as Fusion Coolant, Nohbo, Bloomer Tech, and Next Gen Jane. Beyond that, I am defining some of our investment theses in Fund 3, including our space investment thesis.
You will be joining us on Tuesday May 14, when you will participate in the Fueling the Future: Accessing Funds and Building Space Tech Ventures panel session. How have you seen the space investment market change and develop over the last ten years?
While I’ve been at Material Impact for just over a year, I can comment on what I’ve personally seen first-hand. There remains a lot of interest in the space-to-Earth market as that is most advanced and tehnically derisked. Funds typically have a 10-15 year investment horizon and are interested in investments that can be commericalized and ideally exited within this time frame. These boundaries often guide investment decisions.
Investors these days, given the challenging market dynamics, are focusing on investing in later stage companies at earlier stage valuations than would have typically been seen in ‘21/’22, at the peak of the market. As the space-to-Earth market becomes more mature, we have begun to see the burgeoning and investment in space-to-space applications and deep space exploration. These markets existed minimally a decade ago and now that launch is robust, and the cost of transporting materials to space has decreased by orders of magnitude due to SpaceX, other enabling markets and economies have an opportunity to flourish.
What investment advice would you give businesses who are keen to enter the space industry?
Secure strong product market fit: Make sure you know your customer, their pain points, and what problem you are solving. The best evidence of product market fit is paying customers who want your products or services! While many space tech companies have defense contracts, securing commercial contracts is a compelling proof point for investors.
Understand your business model: Unlike software or biotech where business models are standard, deep tech which includes space tech, is highly variable. Business models are tailored to each business and can be quite varied. There is no one size fits all. Take the time upfront to understand your value proposition, quantify value creation, and determine the best means of value capture.
For example, does your technology scale with constellations? Are you a service-based business charing by user, amount of data, R&D development? Are you a razor / razor blade model with a subscription service?
Determine the optimal capital stack potential: Are you a venture backable business? Small business? Lifestyle growth business? Based on this determine which type of capital is best for your business whether it is venture capital, angel investors, growth equity, debt, or bootstrapping. Consider whether you will be supplementing your capital with non dilutive government grants.
What are some of the most exciting game-changing deep tech and material innovations you have seen recently?
If you look back at industrial revolutions of the past century, it was steel that drove the industrial revolution and sillion that was critical in standing up Sillicon Valley. Material sciences innovations permeate our every day lives. In the context of the space industry, am excited about technologies that facilitate laser communications more efficiently and effectively, hardware and software combinations that can help direct space ‘air traffic control’, technologies to manufacture or grow new products in orbit, as well as solutions to solve for energy crisis on Earth such as by moving systems into space in a cost-effective manner. While these might be the most exciting they might not nescessarily be the most investible today.
A few companies that are exciting AND investible today are some of the following:
Foundation Alloy, a Material Impact Portfolio company, has developed a proprietary way to streamline supply chains and produce stronger parts more quickly and using less energy. For complex supply chains in aerospace where speed and performance are critical, Foundation’s alloys will be an essential enabler of the future of space.
Orbion Space Technology, a Material Impact Portfolio company, develops and manufactures revolutionary plasma propulsion systems for small satellites. Orbion’s customers, who are both government and commercial satellite owner/operators, use Orbion’s products to raise and lower their orbits, avoid collisions with other satellites, and safely dispose of satellites at end-of-life to keep space clean. Because of their fuel-efficiency, Orbion’s thrusters can save spacecraft operators millions of dollars in operating costs while increasing the value of the spacecraft’s data products. Orbion has a novel manufacturing approach that enables production of plasma thrusters at the unprecedentedly high rates that are required to equip the space revolution.
Space Tango’s technology has solved for scientific properties to unlock a new manufacturing supply chain - in microgravity. Through its proprietary hardware with almost 300 payloads of flight heritage, its dedicated software solutions delivering automation, and our scientific knowledge, Space Tango is solving problems for NASA, DOD, and biotech customers. In low-Earth orbit, on the moon, and beyond!
If you could travel to anywhere in space, without the limitations of time and resources, where would you go and what would be your preferred method of space transportation?
I love this question. I am terrified of fast moving transportation, so perhaps particle beaming, as long as I am reconstituted properly. I’d like to find Earth 2, as referenced in Journey of Souls by Michael Newton. It’s another planet in another solar system that mirrors the attributes of Earth in its early years where souls go to rest and recover in between lives.
