assetTrip

Asset Trip with Aaron Burnett: Taking Your Investment to the Moon, Quite Literally

Spaced Ventures CEO talks investing in space technology, finding those moonshot returns, and…cattle farming in Paraguay?
Asset Trip with Aaron Burnett: Taking Your Investment to the Moon, Quite Literally
Asset Trip with Aaron Burnett: Taking Your Investment to the Moon, Quite Literally
Liz Aldrich

Published Jan 20, 2022Updated Aug 30, 2022

CEO of Spaced Ventures

CEO of Spaced Ventures

Cape Canaveral, Florida

Cape Canaveral, Florida

34 years old

34 years old

question

Tell us a little bit about what you do at Spaced Ventures and what led you there in the first place.

Spaced Ventures is an interesting culmination of a variety of things. I'd hit 25 years old—my background is in finance and marketing—and I was doing…fine. I wasn't the youngest CEO of a company, but I was fine enough that I could kind of predict my future. I was like, "this feels relatively successful, but there's gotta be more to life than this." So 25 years old, I have what I call my quarter life crisis. I end up in South America, in Paraguay of all places, teaching second grade and volunteering for two years. I was trying to find out: How can I make a difference? How can I create more meaning in my life? I think there's a lot of millennials that are thinking that way. 

After I've been down there for a while, I essentially run out of money because you can only volunteer for so long without money. And I met my now wife down there. So we're down there, had $500 in a shared bank account the day we were married <laugh>, so I had to get back to doing growth marketing and stuff like that. I was doing remote work by necessity, before it was required, all sorts of crap work, because back then remote work was a big benefit and you had to take big pay cuts to get it and all that stuff, but I needed it.

That's the context for watching that first Falcon Heavy where Elon launched a Tesla into space—it's fairly iconic. Specifically when those boosters are landing side by side, coming back down, it feels super science fiction-y. I love it. I'm always thinking about living in the future, but that was always a fun fiction sort of thing and the world is much more boring and pragmatic. So I had compartmentalized those two things, and then I saw that happening and my brain essentially broke, right?

It's happening in front of my eyes, I'm watching on a livestream in Ecuador at the time. So I say, I gotta figure out how to get in there. For over two years [I was] just learning as much I could about the aerospace industry, how it's NASA and maybe a couple other companies. Naturally, because I had been doing things with growth and startups, I ended up talking to founders in the startup industry.

I saw a pattern after probably about five conversations, but then I had dozens of conversations and it was the same thing over and over again, which was: I need somewhere between one and five million. That was always the number. I need this much money. Every VC I talked to, it's always the same. Come back to me when you have revenue, and I'll give you all the money in the world kind of thing. And they were always stuck.

There's a lot of money going into space. It seems like there's money everywhere for space companies, but the reality is that money is going to very few. Most of the early stage companies, which is where the innovation is at, aren't getting it. They have this problem: VCs are used to saying, "Hey, bring me the product and a million ARR, and I'll give you as much money as you want." But you need a couple million just to get something in space or to even get to the point of where you potentially are gonna have product-market fit. So that's where there's a risk misalignment, and I said, okay, there's something here.

Also, as a space nerd who had been learning as much as I could, and hadn't been able to break into industry, it was pretty obvious that there was a disconnect between the public and being a part of the aerospace industry. You were either an engineer or a billionaire and that's how you got in. So I saw two problems and I said let's marry those and make it work.

Favorite Asset Class:

Space startups

Space startups

Asset Class That Intrigues Him:

Deep tech investments

Deep tech investments

Started Investing:

Age 12

Age 12

First Investment:

Rambus stock

Rambus stock

Biggest Win:

Rambus and crypto/web3

Rambus and crypto/web3

Biggest Loss:

A cattle farm in Paraguay

A cattle farm in Paraguay

I'm curious, since you started Spaced Ventures, what have you personally learned about the investment space having branched into this new landscape of space investing?

The idea that the public can invest in private securities, that whole thing is growing, but we still have quite an uphill battle. There's obviously the people that have already done it with [platforms like] Republic. And now they're like, oh cool space. That's an easy sell. The harder sell is you're a space engineer from Lockheed Martin or SpaceX and this is the first time you even thought about, or even knew, that you could invest in a private company as a non-accredited investor. That's a much longer sales cycle. There's a lot of education that needs to happen still. It's growing, but it'll take some time.

From a space perspective, we learned the market doesn't understand how many opportunities there are out there for space in general. I think most people get surprised. We have hundreds of conversations ongoing with just space companies. We don't do anything else. All we do is space. So when you talk about just the ones that we're focusing on and it's hundreds, most people are like, wait a second, there's like five space companies. So what do you mean you have all these opportunities, right? There's a massive disconnect.

For your more traditionally-oriented investor—you know, stocks and bonds, maybe they have a little bit of crypto—what can investing in space startups do for their portfolio?

I would definitely think of space as a longer term investment. It really comes down to time risk. It's part of the reason why [crowdfunding] is such a unique solution to this. We can get really small check sizes individually. Everyone can risk small amounts. We can aggregate those together to be meaningful for a company to actually put something in space.

This is definitely a higher risk investment. It's kind of a home run shot, right? You're maybe blindfolding yourself and trying to hit a home run. You're really not trying to get 10 percent, 20 percent returns. You're hoping for 100X kind of returns, and the reason you're banking on that is because space is about the closest we can get to an actual infinite market opportunity, right? There are really no bounds to it. In the future, it's not an industry, it's an economy.

It's a big potential market opportunity, but you need to think of it as the risk that it is, and the long time horizon. We do look at companies that can fall anywhere between five and 15 [year time horizons]. But again, you know, you never know.

One of the strategies I do like is, especially [with] younger investors that are thinking about locking certain things up in like a Roth IRA for a long time, this is kind of uniquely positioned for that. Long term, I can't touch it for a long time anyway, and they're kind of those home run shots that if it does go crazy, it'd be great to not have to pay any kind of taxes on that kind of return. Having said that, there's all sorts of technical hurdles and annoyances when you have to do a self-directed IRA.

Space is about the closest we can get to an actual infinite market opportunity, right? There's really no bounds to it. In the future, it's not an industry, it's an economy.

-Aaron Burnett

I'm curious about your own personal investing journey and style. Have you always been interested in alternatives or did you used to be more traditionally-oriented?

I knew this was gonna come up. <laughs> I have this kind of embarrassing story, so that's why I'm laughing a little bit. The first investment I ever made, I think was a company called Rambus. I was 12 years old, I had no clue what I was doing, this was back in the tech bubble. So whatever happened happened, I don't even remember. I've always been interested in technology and things like that, but it didn't take long for me to understand the problems with a small retail investor participating in the public markets, essentially everything stacked against you. You just kind of hope that really long term is the way you can invest.

At least that's how I kind of viewed it. With that in mind, I'd always been interested in alternatives, and when I landed in Paraguay, I made my first alternative investment, which was very alternative...It was investing in a cattle farm in Paraguay.

The funny thing about this is that apparently it's fairly well known that in Paraguay you can actually make really good money just because the costs are so cheap. So with a few mates, it wasn't lot of money. It was like five or ten [thousand]. And within about 18 months that had more than 10Xed. It sounds weird to say cattle farms are 10Xing. But there were a bunch of different things happening: the price of beef was increasing back in the day and there were also really good seasons where the cows were just getting fat.

So it was really cool. I was super excited obviously, to the point where I was like, oh, well maybe if this continues, I may never have to work again and can just reinvest. Now this wasn't just my money. A group of us had something like $270,000 or $300,000 that had accrued here. We rented a farm and all this other stuff. And we had a friend—friend is kind of a rough term—but someone we trusted to kind of help do a lot of the management of [our] cattle, and apparently about $270,000 to $300,000 was enough to tempt him to not only steal the money, but also to leave his wife and kids and take the money and leave the country.

So we lost all our money and he ruined his family's life too, which is kind of an interesting learning experience. That was my first experience in really alternative investing. Didn't really discourage me. You have to be willing to take that kind of risk. It goes without saying, I'm obviously playing around with crypto and stuff like that too, just because I have a high tolerance for risk. You have to take those risks. Probably should have pulled a lot of money off the table in hindsight, but we didn't because we kind of got greedy, thinking oh this is gonna be infinite kind of thing. And then you realize...nothing's infinite.

That is a wild introduction to alternatives. And now I'm curious, are there any alternatives that you have been curious about but haven't invested in yet?

One of the things that I'm interested in is the deep tech side of things. I'm someone who quit my job at 25 to go find meaning in life. I'm pretty focused on the future and things that make impact. So, you know, take everything I say with a grain of salt, but a lot of the things that interest me don't have SAAS in the title, right? Talk about fusion, talk about advanced materials, talk about quantum, those things get me excited. Long term sort of things, high risk, high reward sort of things.

I like to close these out by asking everyone what their biggest investing win and biggest investing loss is. It sounds like maybe you already went over your loss, but I'll let you answer that. <laugh>

Yeah, the loss was definitely [in Paraguay]. 

This isn't the biggest win by dollar amount, but it was the first. The tech bubble happened and I'd bought into that company, Rambus. But I remember as a kid, I had essentially my whole net worth tied up in one random company and just forgot about it for a little bit. Came back after there was a rebound, and it had something like tripled or quadrupled my investment. It was maybe $4,000 or so. But when you're a 14 year old or a 16 year old, it was a really cool win.

Probably one of the bigger wins has been in crypto and web3, stuff like that. Those are the only places you really get those kind of magical overnight wins right now. Right now, they're all getting tanked, but still doing pretty well. So if other people wanted to find magical overnight successes, that's probably where you're finding them right now. But that is equally risky and hard to predict...arguably worse than cattle farming in Paraguay.

Take your own Asset Trip

If you're interested in investing like Aaron, you can check out these platforms:

  • Spaced Ventures: Spaced Ventures believes it’s time to innovate out of the current government and billionaire-only space funding model. They’re proud to provide a platform that allows regular people to invest as little as $100 to show their support for space entrepreneurs all around the world.
  • Propel(x): Propel(x) is where investors and world-changing science and technology startups meet.

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