Accelerator Programs for Space Startups
In only the last decade, the space industry has been much more widely embraced by the world of venture capital. Investors that were previously focused towards more traditional startup industries have widened their gaze to include companies looking to push the frontiers of aerospace.
A consequence of the intersection between the Silicon Valley approach to company building and the space sector has been the development of infrastructure and programs meant to support this new class of space companies. One piece of that infrastructure is the emergence of space-focused startup accelerators.
This newsletter will cover the accelerator programs that are catered particularly to support space companies and discuss the value offered to startups by accelerators. As a quick overview, these are the organizations that will be discussed in more detail in this post:
- Creative Destruction Lab's Space Stream
- Seraphim Space Camp
- STARBURST Accelerator
- Techstars Space Accelerator
- Bonus: Y Combinator
Was this email forwarded to you? Sign up here.
What is an Accelerator?
First, a quick summary of what defines an accelerator in this context. A startup accelerator is a program that supports early-stage, growth-driven companies through education, mentorship, and financing. Startups enter accelerators for a fixed period of time, and as part of a cohort of companies. The accelerator experience is a process of intense, rapid, and immersive education aimed at accelerating the life cycle of young innovative companies, compressing years worth of learning-by-doing into just a few months. There is also often some equity ownership that an accelerator receives in exchange for the support provided to the participating companies.
The Space Accelerators
Creative Destruction Lab's Space Stream
Creative Destruction Lab (CDL) is a nonprofit organization that delivers an objectives-based mentorship program for seed stage science and technology startups. CDL operates 16 industry-focused “streams”. The Space stream is tailored towards coachable startup companies who are applying advanced technologies to exploit commercial opportunities related to space and space-based services.
The program is operated in partnership with the Rotman School of Management at the University of Toronto, the Scheller College of Business at Georgia Tech, and HEC Paris. CDL Space was originally spearheaded by retired Astronaut and former International Space Station commander Chris Hadfield, who continues to serve as a mentor for the program.
Applications are accepted until the end of July and the program takes place between October and June each year. During that period, startups attend five objective-setting sessions in which companies meet with advisors that provide feedback and help the companies set goals to track towards for the next session. Between sessions, the startups are mentored weekly by astronauts, entrepreneurs, investors, and scientists from fields related to the space industry.
CDL does not invest funds in and takes no equity ownership from the participating startups. At the end of the program, startups attend a Super Session day where they have the opportunity to meet with investors and corporate partners in the CDL community for the purposes of fundraising and business development.
Notable graduates from CDL Space include Kepler Communications, Skywatch, and Starfish Space.
Seraphim Space Camp
Seraphim Space Camp is a 10-12 week VC backed accelerator program based in the UK that involves 1-on-1 mentoring, workshops, investor office hours, and more to support startups and help them prepare for raising series A funding. Seraphim Space Camp is operated with a number of partner and sponsor organizations including AWS, Airbus, ESA, and the UK Space Agency. To be eligible for the accelerator, companies must be pre-seed or seed stage and looking to raise a series A within 6-18 months.
Seraphim Space Camp runs twice a year with the next program operating from April through June. Workshops during the program cover a number of topics, ranging from preparing the right fundraising materials to delivering an effective investor pitch.
During the accelerator, companies participate in two separate demo days where the startups can pitch to a global audience. One of the demo days is targeted towards corporates which aid the startups in developing relationships with potential customers and corporate partners. The final demo day allows the companies to pitch to potential investors part of the global SpaceTech ecosystem.
Additionally, Seraphim operates its own venture capital fund called the Seraphim Space Fund which often makes investments in graduates of the Seraphim Space Camp accelerator. Some notable graduates of Seraphim Space Camp include Xona Space Systems, Starfish Space, Wyvern, and Satellite Vu.
STARBURST is a global accelerator and venture fund focused on early-stage space companies (pre-seed to series A). The program is conducted on a rolling basis and startups can apply throughout the year. STARBURST leverages its partnerships with over 50 corporate and government organizations to help the participating startups support customer discovery, pilot programs, fundraising, and more.
STARBURST Accelerator aims to support startups with three key pillars: business development, fundraising, and strategic advisory. In doing so they provide introductions to potential customers, investors, and mentors while helping startups mature their product-market-fit, sales pipelines, datarooms, and company roadmaps.
There is an equity exchange involved in the program. STARBURST receives $120K in equity (grant or options) at the valuation of the startup’s most recent priced round.
While STARBURST’s main accelerator program is global, they also organize additional specialized accelerator programs with partner organizations. These include the SCALE accelerator (Pre-Seed) in collaboration with UCLA, the BLAST accelerator (Pre-Seed - Seed) in France, the Entrepreneurs Challenge in collaboration with the NASA Science Mission Directorate, and the NASA MSI Space Accelerator, also in collaborating with the NASA Science Mission Directorate.
Some notable STARBURST graduates include Momentus, Orbital Sidekick, Launcher, and Morpheus Space.
Separately from the Starburst accelerator, Starburst Ventures is investing in pre-seed and seed stage space startups.
Techstars Space Accelerator
Techstars is a global early-stage tech startup community that operates a number of accelerator programs, including the Techstars Space Accelerator. The Techstars Space Accelerator is based in Los Angeles and has partnered with a number of corporate and public sector organizations, including NASA’s Jet Propulsion Laboratory, Lockheed Martin, Maxar, the US Air Force, The Aerospace Corporation, and more. It is a 13-week program that runs from September to December and applications close in May.
The program begins by helping the participating startups grow their networks, pairing them with industry-specific mentors, investors, and prospective customers. Startups then work with the accelerator's managing director, program manager, and mentors to identify Key Performance Indicators for the startup. Those individuals support the founders as they execute milestones, such as prototyping or acquiring customers. Finally, the founders develop a fundraising strategy and prepare for the Demo Day that occurs at the end of the program.
Techstars receives a 6% common stock ownership in startups participating in their accelerator programs. In addition, the companies are given a $20K living stipend to support themselves during the program.
After being accepted and before the start of the accelerator program, companies are also offered the option to accept or decline an investment of a $100K Convertible Note with a $3M valuation cap.
Notable graduates of Techstars Space Accelerator include Orbit Fab, Morpheus Space, and Pixxel, while graduates of the broader Techstars community include Kepler Communications, Skywatch, Zipline, and Slingshot Aerospace.
In theory, it might not make sense to include Y Combinator (YC) in a list of space accelerator programs because startups of all sectors are eligible to participate in YC. In practice though, because YC is the largest and most successful accelerator in the world (by market cap of alumni companies), it has had a number of highly successful space startups pass through its program. For that reason, I think any space startup looking into accelerator programs could reasonably consider participating in YC as well.
YC is an accelerator program based in San Francisco that was founded in 2005. The accelerator runs twice per year, with one program in the Winter that goes from January through March and another in the Summer that runs from June through August. YC participation involves a number of features including ongoing office hours with the YC team as well as weekly "dinners" in which the entire batch of companies comes together to show off what they've built that week, meet other YC companies, and listen to an off the record talk from a well-known tech entrepreneur (such as Meta's Mark Zuckerberg or Airbnb's Brian Chesky).
Each cycle culminates in a Demo Day, at which the startups present to an audience that now includes most of the world’s top startup investors.
YC invests a total $500,000 into each participating startup through two separate SAFE agreements. Companies in YC receive a $125,000 investment on a post-money SAFE in exchange for 7% of their company. Beyond that, YC invests an additional $375,000 into each company through the form of an uncapped SAFE with a Most Favored Nation (“MFN”) provision. For more detail on those terms, head here.
Some aerospace companies that have gone through Y Combinator include Relativity Space, Momentus, and Boom Aerospace. For more information about space companies at Y Combinator, check out my previous post on the topic.
TerraWatch Space, by Aravind, is aimed at demystifying the developments in space tech. Over the past year, the newsletter and the podcast have helped hundreds of professionals make sense of the developments in the space industry through market analysis, interviews and insights. Sign up to the newsletter for free here and subscribe to the podcast on your favourite podcasting platform.
Is an Accelerator Right for You?
The decision to participate in an accelerator program is unique for each individual startup and founder. Accelerators can be invaluable means of helping a startup focus and define their particular value proposition while offering the support systems and connections to execute those plans. Acceptance into an accelerator can also potentially be seen as a sign of validation by some investors and that may benefit a startup during their fundraising processes.
Startups should always understand carefully the terms involved in participation with any accelerator. That is particularly true if a program involves the accelerator program receiving some equity ownership in the startup. In addition, every accelerator program requires a significant time commitment that introduces inherent opportunity costs for any early-stage company.
When trying to consider participation in any accelerator, the best resources are likely to be founders that have previously gone through that accelerator. So if you're considering an accelerator program, I recommend visiting the website of that program, finding startups that have passed through, and reaching out to those companies' founders for feedback.
Thanks for Sharing!
Thank you to those that have already participated in SpaceDotBiz's new referral program, where you can win space-related prizes (like astronaut Scott Kelly's book of his pictures taken from space or a LEGO set of the Saturn V rocket). Don't forget to share the newsletter with friends!