I am now, have been and will be wrong

NASA losing funding


Why does this affect a private equity investor?

Because “Dealflow is Destiny” We can’t do any better than the pipeline of investments we see.

Governments, for years, have poured money into technologies before they become useful. Serendipity and luck have been responsible for most of the leaps of progress.

The market rewards incremental progress, and large leaps of technology. However, the market can only plan for incremental improvements. As much as I hound the companies to focus on customers, this is only for investment properties. Governments can and do invest in the common good. Most people can’t afford their own army to protect their boarders. Governments also provide infrastructure and stability. And they can make huge bets, because incrementally the benefits outweigh the cost. Universities, research labs, and exploratory organizations are the way to accomplish this task.

Drying up a source of innovation and technology, like NASA, or NIH, or any of the research organizations affects investment directly. Early stage investors can accept some risk, but not all the risks. Most of the time, we can stomach market risk, or a little technology risk. But to do all the R&D; from scratch is not within the realm of most or any professional investor. The group to pay those costs has been the government, research organizations, and the military.

Handicapping a group like NASA, will affect the pipeline of what comes next. For folks like myself, this means a different environment in the future, than the dealflow pattern we experience today.