Diversification Means More Than Just “More”

“... innovation is more about programmatic
disciplined effort, carried out over time in a
well-considered portfolio approach,
than it is about serendipity."

- Deloitte Insights, 2017

One of the challenges of being an angel investor is having enough diversification that the odds are high that one or two companies will “make your fund”. Except for carry, an angel investor is essentially a venture capital fund with one limited partner: you. You pay fees to lawyers, accountants, governments, restaurants, and airlines. You work with your portfolio companies to protect your investments. Those investments have the same risk profile depending on the stage and sector. And you want the same or better returns. But without significant diversification your risk is far higher.

Whether it’s Kauffman Foundation or the Angel Capital Association, the evidence is in that angel investing only works if you diversify. So no matter how much you love the company that’s in front of you, make sure it is only one of at last 20 investments in your portfolio. The evidence has also proven that you need some knowledge of the sector you are investing in to avoid the hype and to understand market structure.

All of that goes double for emerging industries such as space, blockchain, IoT, or AI. Add ‘investor’ to you profile on LinkedIn and within minutes your inbox will be filled with entrepreneurs pitching their latest crypto hedge fund or machine learning startup. Are some of them real? Sure. But how do you tell unless you know that industry inside and out? You can ask experts but is that really a well reasoned and disciplined investment thesis? How much of your ‘fees’ will you be spending trying to figure that out?

If you are considering early stage technology companies as a part of your overall portfolio, you should consider doing it through a fund either alongside your targeted investments or as a co-investor with the fund. Whether it’s a local angel fund focused on a mix of local real estate and tech deals or a sector specific fund with world wide reach, you can’t beat the diversification and knowledge of a well run VC fund. If the minimums are too high talk to them anyway, many will help bundle you with other smaller investors into an SPV.

Our Investment In Umbra Lab


We recently made an investment in the synthetic aperture radar (SAR) company Umbra Lab. This Santa Barbara startup is building a unique SAR constellation capable of quarter-meter resolution. The proposed 12 satellite constellation is capable of hourly revisit times at slightly lower resolutions.

Steven Jorgenson, one of our GPs, stated “I have been investing in space since 2004, before most mainstream investors were even aware of the industry. In 2010, I recognized how Planet Labs (now Planet) was a great opportunity to commercialize space in a new way. Today, Planet is considered the leader of the small satellite revolution and is a pillar of NewSpace. Umbra Lab’s technology represents another leap forward in performance, pioneering a new generation of commercial remote sensing.”

This investment is an example of our larger strategy to invest in the opportunities enabled by space, not just in space technologies. Companies like Umbra enable new capabilities for data analytics companies and applications that use the data Umbra is producing.  We expect our portfolio companies, like Umbra, to significantly disrupt markets and industries on Earth by orders of magnitude.

Umbra Lab’s spacecraft does not fit into today’s legacy aerospace or the new space mold for Earth observation platforms. In today's satellite imaging ecosystem, traditional satellites cost hundreds of millions of dollars, sacrificing high costs in exchange for high resolution (1 meter). Newer smallsat-based platforms sacrifice image resolution in exchange for much lower costs. Limited image resolution has been a key shortfall of small/cube satellites ability to disrupt legacy and terrestrial Earth imaging.

 Umbra's software defined radar electronics package

Umbra's software defined radar electronics package

Umbra refused to make that performance sacrifice. Their new imaging capability offers a significant improvement over the best legacy sensor with recurring costs in the single digit millions. We believe .25 x .25 meter imagery is not only disruptive to both SAR and optical satellites but likely the terrestrial drone industry as well.

Umbra Lab’s software defined radar, powerful antenna, and digital signal processor provides a groundbreaking power aperture area and launch volume:

  • NESZ: ≤ -18 dB

  • Range Resolution ≥0.25m

  • Azimuth Resolution ≥0.10m

This level of accuracy can be traded off for faster revisit time, giving customers a range of choices for what kind of data they need. That choice creates a wide range of applications including, but certainly not limited to:

  • Supply Chain Surveillance

  • Maritime Compliance

  • Search & Rescue

  • Precision Farming

  • Defense and Security

Their 1200+ MHz radar electronics and refusal to pursue analytics as part of their business model has garnered tremendous customer support and led to last year's oversubscribed round. David Langan, the co-founder and CEO of Umbra Lab, has over a decade supporting advanced space systems and is a space-based radar subject matter expert. David is one of the most diligent founders we have come across.

Our co-investors in Umbra include: Crosscut Ventures, Hemisphere Ventures, Wilderness Ventures, Champion Hill Labs and a future Umbra Lab customer.


Space Investing Is Global

Two events this week illustrate just how global the space technology sector is. Boeing's venture arm, HorizonX, participated in a $15M round in Myriota and the Japanese government announced a 100 billion yen ($940M) fund for space startups

The $15 million round in Myriota was led by Australian venture capital firms Blue Sky and Main Sequence, with Boeing HorizonX Ventures, Singapore-based Singtel Innov8 and Right Click Capital joining the fundraising. This is HorizonX's first investment outside the US. Myriota is a product of the $12 million Australian Space Research Program.

The Japanese space fund developed quickly after iSpace raised a $90M Series A  at the end of last year. iSpace is teaming with a former Google Lunar Xprize competitor TeamIndus on lunar exploration technologies. 

The ties between funding sources, Governments with national economic development interests, and regional market needs mean that space technologies are not limited by national boundaries. Global deal visibility is critical. Traditional technology investors cannot rely on their existing domestic networks to discover the next deal. 

Starbridge Releases Details of Its Advisor Committee

Starbridge announced the members of its committee of experts that will advise the company on investments as well provide support and guidance to the fund's portfolio companies. Committee members are drawn from various industries, organizations, and backgrounds. The committee members are:

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For further details on the members and their backgrounds see our Advisory Team page.

Steven Jorgenson, Partner at Starbridge Venture Capital, Discusses Financing and Emerging Space Ventures at Satellite 2018

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Steven Jorgenson, founder and Partner with Starbridge Venture Capital, will be speaking at the "Emerging Space- Is there a Path to Profitability?" panel at the Satellite 2018 conference in Washington, D.C. on Monday, March 12, 2018 from 1:45 PM – 2:45 PM. Steven and panel members Rob Coneybeer (Shasta Ventures) and Jeanette Quinlan (Starburst Aerospace Accelerator) will be discussing whether emerging space businesses, with the more than $10 B invested since 2000, is a profitable business? The panel synopsis suggests "The answer lies somewhere between the pitfalls of hype and the hopes of stellar returns…within a reasonable ‘exit’ window. In reality, investment and business prospects facing these companies are far from clear, and many investors now ask the burning question: where is my profit? This hard-hitting session will focus in on the business case for emerging space, and if big investment means big returns."

If you will be attending or are in the Washington, D.C. area and would like more detail please contact as info@starbridgevc.com or visit us at http://starbridgevc.com/. For conference details see http://2018.satshow.com