The SpaceX Effect – Companies founded by SpaceX Alumni

From Jeff Burke and Michael Madrid:

Note to readers: This is my first co-authored piece. Michael Madrid and I bonded after the Varda Space piece ~1.5 years ago. Since then, we have wanted to write together. There are a few things to know about this piece:

This is just part one. We completed a deep-dive on SpaceX culture (similar to my Sutter Hill Ventures piece) that can be found here.

Part Two: The Culture of SpaceX

This piece has been a work in progress for months. We have spoken to many SpaceX’ers in the process, and we feel good about a lot of the content you will see! Enjoy!

The scale of Elon Musk

Elon Musk is one of the most captivating people on the planet. Not only is he the richest man in the world, but he captivates millions daily as a master meme lord. While SpaceX and Tesla are well documented, Musk’s impact on US technology extends far beyond that. At a time of offshoring manufacturing, slowing public institutions, and large scale building demise, Musk has built two massive hardware companies. And in the process, he has trained and inspired an entire generation of builders.

For now, put aside any perspective you may have on politics, tax policy, and Musk’s personal life. Since moving to the United States ~30 years ago, Elon Musk has been a founding part of seven main companies: Zip2 (sold), PayPal ( merged), SpaceX, Tesla, OpenAI, Neuralink, and The Boring Company.

Exhibit 1: Total Value Created by Elon Musk Companies

These companies have generated +$1T in value, +$80B in annual revenue, and +135,000 jobs…

The numbers alone are astounding, but the list is actually even more impressive than it might seem. Each one of these companies fully disrupted or innovated in a space:

  • PayPal —> Accelerated Fintech & disrupted traditional payments
  • SpaceX —> Created the commercial space launch market
  • Tesla —> Made electric cars cool & a preferable choice
  • OpenAI —> Pushing the bounds of AI with models like GPT-3

Today, we want to focus primarily on SpaceX. (The Tesla story requires its own piece.) SpaceX drove innovation in a space (get it?) that people thought was fundamentally impossible. The industry had dramatically slowed. The excitement of landing on the moon was decades past. The level of regulation was, and remains, super high. Reigniting (get it again?) the space industry was going to be a totally different ball-game than anything Elon Musk (or most others) had done to date.

Exhibit 2: Space launches per year

And yet, if you look at launches per year, SpaceX has accelerated scale over the past few years. Prior to SpaceX, the industry was largely stagnant from 2005-2017. I would argue that SpaceX’s scaling (and success) in 2014-2017 finally turned heads. Since then, the number of private space companies, as well as investment, has dramatically increased.

Of course, Musk is just one person. Along the way, thousands of builders joined him. That’s the impact that few have spoken about.

Exhibit 3: Manufacturing output and employment

The US has increased real manufacturing output while reducing the total number of jobs. This is primarily a function of step-changes in technology. On the whole, however, manufacturing has been heavily deemphasized in our culture. Tech has increased. Jobs have been offshored.

But when you consider recent geopolitical issues, building big, amazing things in the US is imperative. For the past 15 years, Musk has been training thousands of people to build hardware at MASSIVE scale… and fast. As a result, not only has SpaceX succeeded, but those builders have gone on to continue building. The ripple effect is real. We call it the SpaceX effect.

The SpaceX Effect | Companies founded by SpaceX Alumni

Exhibit 4: SpaceX Alumni companies (Credit to the Tesla / SpaceX Alumni Map for the list of companies)

Ultimately, the growth of SpaceX has become fairly obvious. Constant launches. Paired landings. Passenger spaceflights. All of this tweeted through Elon Musk’s channels, with the entire world following. And while this is all amazing and something we should be thankful for, most people have yet to see the former SpaceX employees now building new companies. Within years, there have been tens of sizable companies founded that are building real, critical things.

These founders are not optimizing ad clicks or emojis! They are building companies that are fighting for visions which will fundamentally change the world.

Exhibit 5: 12 companies founded by SpaceX alumni

While we cannot walk through all ~60 of the companies, we can give a sample! In Exhibit 5, we have listed just 12 companies that we find fascinating. Most of the companies are:

  • Relatively early stage
  • Raised significant money (+$500M in total)
  • Building innovative solutions for large scale problems, including nuclear reactors, freight trains, hypersonic reusable engines, and more

Companies of this scale take years (maybe decades) to build. Right now, it may not be apparent to most, but SpaceX has massively altered the trajectory of US large-scale hardware innovation, and the positive impacts of that will be showing for years to come.

The companies

Ursa Major

Founded by SpaceX engineer Joe LaurientiUrsa Major is becoming the market leader in propulsion. For years, space companies have been faced with a tough decision. Design my own engine in-house or purchase Russian-made RD-series engines? The former is very expensive, time-consuming, and inefficient. The latter is outdated and has geopolitical implications. The Ursa Major Hadley, Ripley, and Arroway engines are market-leading, ubiquitous engines. For more on Ursa Major, read my previous piece.

Reliable Robotics

Aircraft that fly themselves. By making autonomous, commercial aircraft, Reliable Robotics can increase everyone’s access to air transportation. Reliable Robotics is creating the airline of the future. SpaceX’ers Robert Rose and Juerg Frefel are the founders of Reliable Robotics.

First Resonance

The surge in large-scale manufacturing is exciting… but complex! As this trend continues, companies will need to better understand their systems. First Resonance is building the operating system for manufacturing. Eliminate data capture. Understand your processes. Operate efficiently. SpaceX’er Karan Talati is the founder & CEO.

Varda Space

SpaceX and many others are building machinery on earth to be used in space. But what if we made things in space that we can use on earth? That’s what Varda Space is doing, with microgravity manufacturing. High quality materials (e.g., pharmaceuticals, fiber optics) can be fabricated to higher specifications if the process is done without influence from Earth’s gravity. Varda Space will be the logistics supplier to carry out these manufacturing processes, and was co-founded by SpaceX’er Will Bruey. For more on Varda, read my previous piece on them.

Epsilon 3

After more then 10 years at SpaceX, Epsilon3 co-founder and CEO, Laura Crabtree, noticed something that had not existed a decade prior when she started at Elon’s company: an expanding startup ecosystem in the space industry. As a result, Crabtree founded Epsilon3 to help such companies reduce risk and increase efficiency by migrating spacecraft testing and ops procedures from static documents, spreadsheets, wikis, and paper checklists to digital alternatives based on a modern software platform.


Relativity is building the first autonomous rocket factory. By “disrupting 60 years of aerospace”, Relativity predicts they can be more reliable (100x fewer parts), better speed (10x faster production time), more flexible (no fixed tooling), and win with optimization (compounding iteration quality). At $1.3B, Relativity is the highest funded company of the group. Co-founder Jordan Noone worked at SpaceX in 2014 and 2015.

Xona Space Systems

GPS is a critical part of our infrastructure, from payment processing to driving cars to syncing clocks. But the painful truth is that GPS is vulnerable… and beyond current risks, the exciting applications of the future demand more and better position, navigation, and timing (PNT) support. Enter Xona Space Systems, which is building a precision LEO PNT constellation called Pulsar that offers a more secure, robust, and accurate alternative to legacy systems. The use cases are many, and co-founder & CEO Brian Manning is leading the charge.

Radiant Nuclear

Nuclear energy is our most scalable green source of energy, yet it is not universal. Reactors are huge projects, often mired in bureaucratic debates at the state or municipality level. Radiant is changing that with portable nuclear microreactors. Instead of a diesel generator, people could use Kaleidos. This provides a green alternative to fossil fuels that is both sustainable, scalable, and flexible. Founder Doug Bernauer is a former SpaceX engineer.

Phantom Space Corporation

SpaceX, Varda Space, and many more are proving the economic potential of space. But getting to space is expensive! SpaceX has done wonders lowering launch costs, but that is just the start. Phantom Space is a SpaceX alternative that is using mass manufacturing to drive down the costs of satellite builds and launches. This will lower the barrier to entry in space, creating more businesses and market opportunities. Founder Jim Cantrell was the first VP of Business Development at SpaceX back in 2001.

Impulse Space

Building a rocket. Creating the payload. Launching it to space. It is all very complex, and that may seem like the hard part (maybe it is)… but the job is not quite done! What do you do with it once it gets to space? Impulse Space is building orbital maneuvering vehicles that are focused on last-mile delivery. Think about your Doordash driver… just ergh…. in space! Jokes aside, this is a critical need in the industry. So much so that founder Tom Mueller left SpaceX after 17 years to pursue it!

Astro Forge

Asteroids consist of a variety of raw materials, many of which we actively use on earth (ex., gold, cobalt, iron). Resource depletion on earth is a concern for many. Astro Forge is working on a cost-effective and scalable solution for asteroid mining. This would give us the opportunity to expand our access to resources, as well as reduce on-earth mining and the downstream effects that has. Founder and CTO Jose Acain spent years at SpaceX as an aviation integration engineer.

Parallel Systems

Freight trains are a critical part of American logistics. The trains, however, run on fossil fuels. Parallel Systems is decarbonizing freight by building a cleaner, automated rail future. Long-term, their solutions will reduce the carbon footprint of rail, but they will also allow more of the $700B trucking industry to convert to decarbonized freight! SpaceX’er Matt Soule spent 13 years at SpaceX prior to founding Parallel Systems.


These twelve companies are clearly just the start. There are many more SpaceX alumni companies already, and we believe there are certainly many more to come. We will release Part II in ~2 weeks, and in that piece, we will do a full breakdown of how and why. How does SpaceX build and maintain such a high-performance culture? Why does this lead to so many entrepreneurial alumni? More to come!

What founders and reps can do to limit liability when raising capital

Founders need capital to grow, and registered reps often help them get there – but it’s not only about the capital.  If you search “Issuer Liability” most of the results will talk about the regulations.  When you raise money from someone else (not friends and family) you are selling a security, which is a regulated activity.  When you take an investors money there is liability, they are expecting something in return.  Many founders ask what they can do to protect themselves from investor lawsuits, so we wanted to provide a short guide.  We are not lawyers and this is not legal advice, this is information about the market in general for education purposes.  Founders should always seek guidance from a lawyer and if you are planning on raising capital with or without a broker-dealer you should probably have an attorney who you feel comfortable with on retainer.

  1. Follow the rules

This is pretty straightforward, and if you are working with a registered rep of a broker-dealer they will ensure your offering ticks all the right boxes.  Broker dealers are regulated by FINRA and their job is to understand and implement the rules.

  1. Get a lawyer

Lawyers are like Doctors, you don’t need them when you’re healthy, you need them when you’re sick or if you just got run over by a bus (in that example you’ll need both).  If you’re raising capital as your business grows you’ll need a lawyer to create documents and to provide legal advice for a range of issues well beyond your offering.

  1. Disclose, disclose, disclose

One of the biggest drivers of investor lawsuits is the failure to disclose material facts.  If you disclose everything, it will greatly reduce the risk of getting sued.  Investors understand that there are risks with private investing, they are taking the risk and will be rewarded if it pays off and the project works.  For example, if the company has a loan that needs to be paid off and you fail to disclose that, investors would be very unhappy about that (and so would the regulators).  Most of the regulations center around disclosure, they don’t evaluate the quality of an individual offering or sector – when you file an SEC registration statement, the SEC will verify the format, and that you have addressed all the required points, they will never evaluate the quality of the offering or tell you if it’s a good idea or not.  What they do require is that all material facts are disclosed, including the backgrounds of the principals, financials of the company (if any), audits, reports, articles, business plans, patents or other intellectual property, etc.  The reason for this is simple, investors can only make informed decisions when they have all the facts.

  1. Target sophisticated investors

This is more about strategy; if you target investors who have experience in early stage companies, they are going to be in a better position to make a decision, and may even provide valuable feedback based on their experiences in other deals.  If you are dealing with someone who has never invested in a private offering before, that’s probably not your best investor.

  1. Explain to investors the Use of Proceeds well

This is actually the most important requirement when doing a raise with a FINRA BD; the reason is simple.  Investors want to know where their money is going.  Things don’t always work out, and investors may be receptive to that – where they get angry is if you do something outside the scope of your plan, or something they believe to be reckless.  If you explain that with $500,000 you’re going to do A,B,C, – and then you do it, and it doesn’t work out as anticipated, there’s a much lower chance of having a problem with investors vs. a situation where you went far off the business plan and invested in something not on the Use of Proceeds list.  Founders have multiple roles with investors, they are fiduciaries of the shareholders, and managers of the business.  They have an obligation to the shareholders to maximize their value.  As an executive of the business, their job is to ensure that they execute the business plan to the best of their ability.

  1. Get an Umbrella insurance policy

If you have a house, a ranch, or other family assets, you should probably get an Umbrella insurance policy which covers those assets if you get sued.  The umbrella insurance is not specifically for people raising funds, it’s for general situations like if a stranger trespasses on your property and breaks their leg and sues.  The insurance agent can explain the benefits of it, but the idea is to provide some protection to your core assets in the case of lawsuits.

  1. The LLC or Corp provides basic protection

Incorporation when starting a company is key, it means that any lawsuit would be against the entity, not the individuals.  Having said that, a founder is in a unique position because they typically are the main shareholder, the executive, and the person responsible for the entity.  However, this is the most basic protection and the reason that entities are formed, the group of shareholders are stakeholders who share in the profits or the losses of the business together.

  1. Setup a Trust

If you have children, having a Trust is a great idea to pass assets however modest without dealing with Probate.  A Trust can provide other advantages of asset protection, but it does cost money to set it up.  This varies from state to state, but you should talk to a local attorney near where your primary residence is located.  A Trust should be local, it shouldn’t be in Delaware where most Corporations are registered.

  1. Keep in touch with investors

There’s a reason why publicly traded companies have quarterly investor calls.  Imagine the following scenario-  you have an investor who gave you a decent amount of money to start your company and you don’t hear from him for years.  Time goes by and your business grows, and then you face a huge problem from a competitor, and there is a loss.  You call to tell him that, he’s not going to be happy to listen to this.  But it’s always about the lack of info and attention, if you were calling them or if you write an investor letter at least quarterly, you probably wouldn’t be in such an awkward position.  Regular updates are a great way to keep investors informed, and if they are displeased with anything they’ll tell you that then.

  1. Under promise and over deliver

Getting caught in litigation is usually because an investor feels they were abused, lied to, tricked, or that they got an unfair deal.  If you under promise, and then over deliver – this vastly reduces the chance of someone feeling bad about the investment.  Investors don’t expect miracles and founders are not magicians, things happen, everyone knows that.  But if you provide great results, defined as better than what you originally told them, how could anyone have a problem with that?

This goes to the core of writing great terms, be conservative, be reasonable, explain the risks.  Many will say, that it will be ‘harder’ to raise money if your projections are conservative – exactly!  It’s a filtering process, you don’t want someone to EXPECT a huge return because then if you don’t do it, it will be a problem.  There was a FINRA case where a REIT promised 8%, delivered 5%, and got sued (we’re paraphrasing the terms for the sake of the example).  Or in other words, the 5% return was actually very good, but they hard sold and promised 8%, so it left some to feel that it was misleading.

11. When Speaking, Speak Honestly

According to one lawyer, what can prevent lawsuits is simple honesty.  Don’t exaggerate claims or speculate about the future, and certainly don’t speak about future potential as if it’s fact.  Avoid superlatives such as “Will” and instead use language like “May” because you really don’t know what will happen in the future.


This is not an exhaustive list, but it should provide the idea of how to risk mitigate the potential for getting sued, which is a real liability for founders, issuers, and reps.  There isn’t any language you can add to an investment contract that prevents an investor from suing (which is logical, if you think about it, because real scammers could use that language to shield themselves).

So consider taking the high ground, the ethical approach, disclose more than necessary, be above regulatory standards, don’t just meet the minimum requirements.

Growth Hacker is the new VP Marketing – The rise of the Growth Hacker


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The rise of the Growth Hacker
The new job title of “Growth Hacker” is integrating itself into Silicon Valley’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer. Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?” and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph. On top of this, they layer the discipline of direct marketing, with its emphasis on quantitative measurement, scenario modeling via spreadsheets, and a lot of database queries. If a startup is pre-product/market fit, growth hackers can make sure virality is embedded at the core of a product. After product/market fit, they can help run up the score on what’s already working.

This isn’t just a single role – the entire marketing team is being disrupted. Rather than a VP of Marketing with a bunch of non-technical marketers reporting to them, instead growth hackers are engineers leading teams of engineers. The process of integrating and optimizing your product to a big platform requires a blurring of lines between marketing, product, and engineering, so that they work together to make the product market itself. Projects like email deliverability, page-load times, and Facebook sign-in are no longer technical or design decisions – instead they are offensive weapons to win in the market.

The stakes are huge because of “superplatforms” giving access to 100M+ consumers
These skills are invaluable and can change the trajectory of a new product. For the first time ever, it’s possible for new products to go from zero to 10s of millions users in just a few years. Great examples include Pinterest, Zynga, Groupon, Instagram, Dropbox. New products with incredible traction emerge every week. These products, with millions of users, are built on top of new, open platforms that in turn have hundreds of millions of users – Facebook and Apple in particular. Whereas the web in 1995 consisted of a mere 16 million users on dialup, today over 2 billion people access the internet. On top of these unprecedented numbers, consumers use super-viral communication platforms that rapidly speed up the proliferation of new products – not only is the market bigger, but it moves faster too.

Before this era, the discipline of marketing relied on the only communication channels that could reach 10s of millions of people – newspaper, TV, conferences, and channels like retail stores. To talk to these communication channels, you used people – advertising agencies, PR, keynote speeches, and business development. Today, the traditional communication channels are fragmented and passe. The fastest way to spread your product is by distributing it on a platform using APIs, not MBAs. Business development is now API-centric, not people-centric.

Whereas PR and press used to be the drivers of customer acquisition, instead it’s now a lagging indicator that your Facebook integration is working. The role of the VP of Marketing, long thought to be a non-technical role, is rapidly fading and in its place, a new breed of marketer/coder hybrids have emerged.

Airbnb, a case study
Let’s use case of Airbnb to illustrate this mindset. First, recall The Law of Shitty Clickthroughs:

Over time, all marketing strategies result in shitty clickthrough rates.

The converse of this law is that if you are first-to-market, or just as well, first-to-marketing-channel, you can get strong clickthrough and conversion rates because of novelty and lack of competition. This presents a compelling opportunity for a growth team that knows what they are doing – they can do a reasonably difficult integration into a big platform and expect to achieve an advantage early on.

Airbnb does just this, with a remarkable Craigslist integration. They’ve picked a platform with 10s of millions of users where relatively few automated tools exist, and have created a great experience to share your Airbnb listing. It’s integrated simply and deeply into the product, and is one of the most impressive ad-hoc integrations I’ve seen in years. Certainly a traditional marketer would not have come up with this, or known it was even possible – instead it’d take a marketing-minded engineer to dissect the product and build an integration this smooth.

Here’s how it works at a UI level, and then we’ll dissect the technology bits:

(This screenshots are courtesy of Luke Bornheimer and his wonderful answer on Quora)

Looks simple, right? The impressive part is that this is done with no public Craigslist API! It turns out, you have to look closely and carefully at Craigslist in order to accomplish an integration like this. Note that it’s 100X easier for me to reverse engineer something that’s already working versus coming up with the reference implementation – and for this reason, I’m super impressed with this integration.

Reverse-engineering “Post to Craigslist”
The first thing you have to do is to look at how Craigslist allows users to post to the site. Without an API, you have to write a script that can scrape Craigslist and interact with its forms, to pre-fill all the information you want.

The first thing you can notice from playing around with Craigslist is that when you go to post something, you get a unique URL where all your information is saved. So if you go to you’ll get redirected to a different URL that looks like It turns out that this URL is unique, and all information that goes into this listing is associated to this URL and not to your Craigslist cookie. This is different than the way that most sites do it, where a bunch of information is saved in a cookie and/or server-side and then pulled out. This unique way of associating your Craigslist data and the URL means that you can build a bot that visits Craigslist, gets a unique URL, fills in the listing info, and then passes the URL to the user to take the final step of publishing. That becomes the foundation for the integration.

At the same time, the bot needs to know information to deal with all the forms – beyond filling out the Craigslist category, which is simple, you also need to know which geographical region to select. For that, you’d have to visit every Craigslist in every market they serve, and scrape the names and codes for every region. Luckily, you can start with the links in the Craiglist sidepanel – there’s 100s of different versions of Craigslist, it turns out.

If you dig around a little bit you find that certain geographical markets are more detailed than others. In some, like the SF Bay Area, there’s subareas (south bay, peninsula, etc.) and neighborhoods (bernal, pacific heights) whereas in other markets there’s only subareas, or there’s just the market. So you’d have to incorporate all of that into your interface.

Then there’s the problem of the listing itself – by default, Craigslist works by giving you an anonymous email address which you use to communicate to potential customers. If you want to drive them to your site, you’d have to notice that you can turn off showing an email, and just provide the “Contact me here” link instead. Or, you could potentially fill a special email address like that automatically directs inquiries to the right person, which can be done using services like Mailgun or Sendgrid.

Finally, you’ll want the listing to look good – it turns out Craigslist only supports a limited amount of HTML, so you’ll need to work to make your listings work well within those constraints.

Completing the integration is only the beginning – once it’s up, you’d have to optimize it. What’s the completion % once sometime starts sharing their listing out to Craigslist? How can you change the flow, the call to action, the steps in the form, to increase this %? And similarly, when people land from Craigslist, how do you make sure they are likely to complete a transaction? Do they need special messaging?

Tracking all of this requires additional work with click-tracking with unique URLs, 1×1 GIFs on the Craigslist listing, and many more details.

Long story short, this kind of integration is not trivial. There’s many little details to notice, and I wouldn’t be surprised if the initial integration took some very smart people a lot of time to perfect.

No traditional marketer would have figured this out
Let’s be honest, a traditional marketer would not even be close to imagining the integration above – there’s too many technical details needed for it to happen. As a result, it could only have come out of the mind of an engineer tasked with the problem of acquiring more users from Craigslist. Who knows how much value Airbnb is getting from this integration, but in my book, it’s damn impressive. It taps into a low-competition, huge-volume marketing channel, and builds a marketing function deeply into the product. Best of all, it’s a win-win for everyone involved – both the people renting out their places by tapping into pre-built demand, and for renters, who see much nicer listings with better photos and descriptions.

This is just a case study, but with this type of integration, a new product is able to compete not just on features, but on distribution strategy as well. In this way, two identical products can have 100X different outcomes, just based on how well they integrate into Craigslist/Twitter/Facebook. It’s an amazing time, and a new breed of creative, technical marketers are emerging. Watch this trend.

So to summarize:

  • For the first time ever, superplatforms like Facebook and Apple uniquely provide access to 10s of millions of customers
  • The discipline of marketing is shifting from people-centric to API-centric activities
  • Growth hackers embody the hybrid between marketer and coder needed to thrive in the age of platforms
  • Airbnb has an amazing Craigslist integration

Good luck, growth hackers!


Keys to Fundraising Success – 3 things that investors look for

We asked investors what are the most important things you look for in a founder/startup, and these 3 things kept coming to the top of the list:

  • Is this business scalable?  It works for a certain group of people, but can the business be increased by 1000% or 10,000% and the same economics will work?
  • Does this technology or business model fundamentally change the industry it’s in?  Some refer to this as a Blue Ocean, or creating new markets.
  • Does the business plan incorporate for problems they may face down the road like large competitors, existing Monopolies, regulatory/legal challenges, etc.?

Of course, there are many factors that are looked at including the team, background, market sentiment, and many others.

Open an account at Venture Capital Cross and checkout disruptive early stage startups like Sensill, who has a patented Real Time Diagnostics Point of Care system saving money and saving lives.

Early stage CF and Reg D are long term investments for any portfolio

Investing is a form of long term savings against inflation.  There’s risk, but also potential reward.

Crowdfunding in campaigns like Gab is a great way to invest in a good cause (Free Speech) while saving for the future.  Gab is raising at a 250m valuation, as Gab’s user base grows so will the valuation.


Don’t want to invest?  Join the conversation @ Gab, checkout our investing in Private Equity group here.

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