Spaced Ventures supports a variety of securities though we strongly suggest two types, outlined below:
Convertible Debt (Convertible Notes or SAFE Note): Convertible Debt securities are great tools to raise funds for companies which are too early to value. Most early stage space companies that don’t have revenue or less than $1mm in annual revenue should strongly consider using a Convertible Debt security.
NOTE: We also suggest that issuers consider Convertible Notes over SAFEs. SAFE agreements are gaining popularity but we have found that many Venture Capitalists and Institutional investors, especially those outside Silicon Valley, are still wary of investing after a SAFE round due to unknown potential liability.
While some founders may not care about institutional investors, we suggest that all space companies avoid alienating potential future investors. Space companies still require a lot of capital to be successful and it is always preferable to not have to limit your potential future investor partners.
Equity (Common Stock or Preferred Stock): Issuers who are ready to conduct a raise with a valuation can offer priced securities in exchange for Preferred or Common stock. This option will almost certainly mean that you will need a lawyer to help draw up your contracts.
NOTE: We suggest companies offer stock that does not have voting or information rights to reduce administrative and strategic burden in the future. We work on educating our investors on what that means for them and why giving the companies they invest in more control can be beneficial to all involved.