Early SpaceX investor Chad Anderson talks upcoming IPO … — Transcript

The fund, the stock rather, represents around one-fifth of that portfolio. Shares are down today, but they are up over 50% so far this year. Joining me now here is Chad Anderson, founder and CEO of Space Capital. He has invested 14 times in space since 2017. It's good to see you, Chad.

TIMES IN SPACE SINCE 2017. IT'S GOOD TO SEE YOU CHAD. GOOD TO BE HERE. SO YOU KNOW, AS WE KIND OF DESCRIBED THERE, THIS COMPANY HAS A LOT OF INVESTORS.

Good to be here. So, you know, as we kind of described there, this company has a lot of investors. There's a lot of proxies for it. We've gotten some numbers come out in terms of its fundamental performance. What are you most eager to see in the S-1?

YEAH. WELL LOOK, I MEAN IT'S IT'S HAPPENING. IT'S HAPPENING FASTER THAN EXPECTED AND IT'S REALLY EXCITING. SO THE NEXT FEW WEEKS ARE GOING TO BE REALLY INTERESTING, PARTICULARLY WITH THE ROAD SHOW AND THE NONTRADITIONAL ROAD SHOW TO SEE. I MEAN, THE BANKS

Yeah. Well, look, I mean, it's happening. It's happening faster than expected, and it's really exciting. So the next few weeks are going to be really interesting, particularly with the roadshow and the nontraditional roadshow to see. I mean, the banks are going to go out and show some slide decks, but they're also going to invite a lot of folks to come and see what they're building firsthand, which I think is incredibly important because you can't really get your head around the scale and ambition of what they're doing unless you see it in person.

SCALE AND AMBITION OF WHAT THEY'RE DOING UNLESS YOU SEE IT IN PERSON. I'M SURE THAT'S TRUE IN TERMS OF KIND OF BEING, BEING AWED BY THE SCALE OF THINGS AND ALL THEY'RE MAYBE GOING TO BE CAPABLE OF. BUT IT WOULD SEEM

I'm sure that's true in terms of kind of being, being awed by the scale of things and all they're maybe going to be capable of. But it would seem also important because nothing in the actual reported numbers would get you to $1.75 trillion or whatever the initial valuation is supposed to be. Certainly double what the last private valuation was, right? So you have to have this big think. So what do you think that story is going to sound like?

CERTAINLY DOUBLE WHAT THE LAST PRIVATE VALUATION WAS, RIGHT? SO YOU HAVE TO HAVE THIS BIG THINK. SO WHAT DO YOU THINK THAT STORY IS GOING TO SOUND LIKE?

Yeah, 1.75. And people push, you know, reports are pushing that to maybe 2 trillion. We'll see where it lands. But yeah, I mean, I think, you know, investors and allocators are pricing in 2040 economics. Here they are. This is not, you're not looking at this business as a launch business. You're looking at it as starting their launch business is a competitive advantage that gives them access to orbit for Starlink broadband, for direct-to-cell capability, and going after the telco market and orbital AI data centers.

NOT LOOKING AT THIS BUSINESS AS A LAUNCH BUSINESS. YOU'RE LOOKING AT IT AS STARTING THEIR LAUNCH BUSINESS IS A COMPETITIVE ADVANTAGE THAT GIVES THEM ACCESS TO ORBIT FOR STARLINK BROADBAND, FOR DIRECT TO CELL CAPABILITY, AND GOING AFTER THE TELCO MARKET AND

Right. And so Starship is key to all of this. And so this next-generation vehicle is what enables all of these future businesses. None of those businesses other than the broadband has actually printed any revenue yet. Right. So what we're the narrative here is forward looking, right? I mean, if you, if you don't, you don't price this business with a DCF model and a discount rate, right? You price this with options.

WE'RE THE NARRATIVE HERE IS FORWARD LOOKING, RIGHT? I MEAN, IF YOU IF YOU DON'T, YOU DON'T PRICE THIS BUSINESS WITH A DCF MODEL AND A DISCOUNT RATE, RIGHT? YOU PRICE THIS WITH OPTIONS.

Yeah. I mean, I would look back and the highest ever price to forward sales ratio that Amazon ever traded at or Google ever traded at in the early years is like 28. You give SpaceX credit for like doubling revenue next year, and it only gets you just a little above $1 trillion. So obviously, to your point, it's going to have to be everything that comes next.

REVENUE NEXT YEAR, AND IT ONLY GETS YOU JUST A LITTLE ABOVE $1 TRILLION. SO OBVIOUSLY, TO YOUR POINT, IT'S GOING TO HAVE TO BE EVERYTHING THAT COMES NEXT. HOW DO YOU ARGUE AGAINST THE NOTION THAT EVEN IF IT'S ACCOMPLISHED,

How do you argue against the notion that even if it's accomplished, then we have a boring telecom business? Why am I excited here? Well, we don't because that is a money-making element of the business for sure. Broadband and telco. Absolutely. These are big markets and they're gobbling up a significant market share.

BROADBAND AND TELCO. ABSOLUTELY. THESE ARE BIG MARKETS AND THEY'RE GOBBLING UP A SIGNIFICANT MARKET SHARE.

Orbital data centers. This is a next phase. Like this has not been done with satellites before. It's happening on the ground. There is a convergence happening between ground infrastructure and orbital infrastructure on a very large scale, which is unlocking all kinds of opportunity for us to take heavy industry and move it off. Planet Starship also enables all kinds of frontier markets as well, right? NASA is building a moon base. This is key to that architecture.

KINDS OF OF OPPORTUNITY FOR US TO TAKE HEAVY INDUSTRY AND MOVE IT OFF. PLANET STARSHIP ALSO ENABLES ALL KINDS OF FRONTIER MARKETS AS WELL, RIGHT? NASA IS BUILDING A MOON BASE. THIS IS KEY TO THAT ARCHITECTURE.

They're going to go to Mars after that, right? How do you value these markets? You know, that's a big question. But NASA's already paying billions and they already have billions in contracts for these missions.

WOULD YOU LOOK TO BE SELLING ANY ON THE ON THE FIRST LOCK UP EXPLORATION?

Would you look to be selling any on the first lockup exploration?

LOT OF VALUE HERE. AND AND MUSK HIMSELF IS TYING A LOT OF HIS FUTU