Space startups are choosing to remain in the shadows increasingly. Chad Anderson of Space Angels said that many companies are adopting this policy. Indeed and LinkedIn display advertisements only for stealth based space companies. A DARPA competition recently had a stealth startup qualify for it, for launches from multiple sites in weeks.
Since business models & tech of high-profile startups were being increasingly copied, this is the reason for going stealth mode. When SL and PI planned to launch smallsat constellations, many copycats emerged. The companies were already significantly in the lead; hence they didn’t face many problems.
With growing investment in this arena, even copycat firms get funded these days. Fast followers can occupy the arena quickly, dismantling first movers. Lean startups face issues where they test their services on pivots. However, they turn out to be interested later, by other companies. Stealth mode startups can easily disrupt existing titans due to secrecy.
Blue Origin ran in stealth until 2004, when Bezos disclosed his plans. This was possible only due to Bezos’ funding in his personal capacity. Umbra was inspired by this approach. They closed off information access, due to deep pockets of the founders. Umbra stood away from the media but was open with potential investors.
Ordering components, raising capital, improved performance offers were all elements that blew stealth startup cover in the industry, due to its small size. Dominocielo of Umbra intends to keep it that way till Umbra is secure in its abilities. While companies with patented tech and at seed funding stage held their cards close, eventually information had to be revealed. Otherwise, startups could be hurt.
Investors ought to be cautious though. Theranos, a stealth company, raised $700 million and got away with fraudulent practices for a long time because of its stealth status. The company eventually shut down. Secrecy could also prevent additional funding via word-of-mouth knowledge.
Transparency and communications are advised between investors, entrepreneurs and employees. Better they are at this, the better success they achieve.
Vector Launch, VOX Space & a stealth startup qualified for $10 million for identifying vehicles that can launch satellites from multiple sites within a few weeks. Stealth companies cannot receive Other Transaction or Federal contracts funding as they have to be registered and disclose details before qualifying for these routes.
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