Is this reality rating a positive development in the space industry?  

9 members have voted

  1. 1. Is SFR a positive development?

    • Yes
      0
    • No
      1
    • Maybe
      8


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Courtesy of Ars Technica's recent rocket report, I am now aware of the Spacefund Reality Rating (SFR). This appears to be an effort to provide information to potential investors on which companies are real, which companies are still developing and may not work out, which companies are likely investment scams, and which companies have been part of the space-industry bedrock for decades but you haven't heard about until you found them on this website.

I'm looking at the Swedish Space Corporation, which is apparently huge, but nobody talks about because they don't operate their own orbital launches, just... like all the less glamorous stuff, apparently.

As to the poll: I think this is a positive development for an industry crowded by startups, which have to be distinguished from scams or really bad ideas, but I am perfectly aware that good-sounding initiatives can be useless to actively harmful.

EDITS: It's also interesting to note that Relativity Space, despite having just gotten launchpad clearance on the Cape, are a 6. As I understand, plenty of ex-SpaceX engineers on staff as well, so I'd given them a solid chance of making it to orbit... even if it's premature to figure out if they're going to survive the small satellite launch bloodbath... I mean small satellite launch business.

Also, as a personal gripe, I'd give Blue Origin an 8, at least when it comes to New Glenn (New Shepard-based services are a 9). Sure, their chances are excellent... but until you have payload in orbit, I consider top-flight reliability rankings premature.

Edited by Starman4308
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The formula by which SpaceFund rates the ‘reality’ of any company is proprietary and is available only to SpaceFund investors, advisors, and management.

As someone who worked in corporate credit ratings, this irks me off immediately. Our methodologies were public.

...because we heavily relied on inside information shared by the clients as a source of our ratings’ added value (e.g. top 20 borrowers - something that was between us, the client, and CBR’s Form 118). But it’s obvious that a non-public methodology is open to abuse and bias, because you’re taking the people familiar with it at their word. With a “reality” rating you can’t even attempt an independent validation because “reality” is a subjective measure you can’t explain with a publicly known formula, unlike, say, 1-year probability of default.

What’s their business model?

Oh, look, it’s a crypto investment fund, and this rating is their sideshow.

Edited by DDE
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I'm a simple man. Until company puts on the table a real, working piece of machinery, ready to be put on launchpad i do not consider them a real space company.

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13 minutes ago, kerbiloid said:

The simpliest man's way. No money.

Found the Roscosmos guy.

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8 minutes ago, DDE said:

Found the Roscosmos guy.

Money?

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I suppose all depends on what do we want to call "positive".

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I'm starting a SpaceFund Reality Rating Rating Service where I rate the integrity and accuracy of ratings done by third party space related rating services.

/s

Quote

The formula by which SpaceFund rates the ‘reality’ of any company is proprietary and is available only to SpaceFund investors, advisors, and management.

So I have to invest to get access to this formula, and potentially realize that the formula is entirely flawed and my investment is misplaced? Got it.

While the idea in general is fine, I'd think that any serious potential investor looking for a space related venture to invest in, would have a decent team of researchers to dig out potential candidates. This service is nice to have for us keyboard astronauts, but we have no actual use of it. Dunno.:/

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Wow, they even have Cloud Aerospace on their list. IIRC, that only ever consisted of a post on this forum and CGI renders. EDIT: And a subreddit (of course)

At what point will they remove these?

EDIT: Why is Aerojet Rocketdyne a 4? Are they that shady?

Edited by Mad Rocket Scientist

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Zero 2 Infinity is rated at a 7. So far they have flown a few balloons to 30-ish kilometers, and dropped a model of their rocket from one, igniting a small solid rocket motor, most likely a large off the shelf hobby motor. A 7 is the same level as Phantom Express, and higher than SEA LAUNCH (6) and Astra (5). Astra has launched their orbital rocket in tests (with failures) but has been very secretive. Sea Launch has been inactive for a while but have launched things to orbit in the past, and S7 bought them with the intent to restart service.

Copenhagen Suborbitals is rated as a 4, despite having developed several liquid fueled engines, flying several rockets to an altitude of several kilometers, and several other noteworthy achievements.

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50 minutes ago, Ultimate Steve said:

Sea Launch has been inactive for a while but have launched things to orbit in the past, and S7 bought them with the intent to restart service.

Apparently they don't factor in the support from parent companies. Wouldn't you agree that a direct subsidiary of LockMart and Boeing (or, in this case, a fairly successful airline) is inherently "realer" than a venture firm?

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3 hours ago, Shpaget said:

So I have to invest to get access to this formula, and potentially realize that the formula is entirely flawed and my investment is misplaced? Got it.

While the idea in general is fine, I'd think that any serious potential investor looking for a space related venture to invest in, would have a decent team of researchers to dig out potential candidates. This service is nice to have for us keyboard astronauts, but we have no actual use of it. Dunno.:/

Yep. The only other alternative is a costly process of validating their estimates... which is difficult, because they use an imaginary scale, so you’ve got nothing to validate it against.

However, pretty much any collective investment organization that focuses on a speculative market would seek to obfuscate its investment strategy, since that would be the source of its success - as opposed to some pension fund/life insurance company investing into low-risk low-return ‘blue chips’.

There’s still a handful reasons why investors go to outside financial ratings:

  • An analyst team is a major up-front investment, quite tall for an individual investor or a minor investment organization/an organization that makes venture investments as a sideshow, making outsourcing the analysis desireable; John Moody hit it big with his ratings manuals at the turn of the century, once the grip of major investors like J.P. Morgan on the market slackened in favour of massive amounts of small private investors.
  • Starting about 1970, the margins of the Big Three ratings agencies were tanking hard, and so they converted to a different business model - instead of selling thick manuals, they began to ask bond issuers for money while publishing the ratings gratis. Their ratings would now include info not found in publicly available financial statements, hopefully increasing the accuracy of the assessment. Of course, the relationship began to look somewhat incestuous - around 2007, Moody’s rating staff were rating complex derivative securities specifically designed by Moody’s advisory staff to get a high Moody’s rating.
  • But ultimately, the biggest generator of demand for ratings under that model are financial regulators outsourcing their regulatory function. Under Glass-Steagall the Fed began turning the ratings agencies into gatekeepers: you need a non-junk rating from one of a very short list of NSRSOs in order for your securities to be at all allowed in portfolios of pension funds, and other orgs that marshall a lot of investment from individuals. ESMA does the same, back here CBR does the same, even though between roughly March and December of 2016 there was only one accredited agency...

AMA, I’ve written my postgrad thesis on that industry.

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52 minutes ago, DDE said:

Yep. The only other alternative is a costly process of validating their estimates... which is difficult, because they use an imaginary scale, so you’ve got nothing to validate it against.

However, pretty much any collective investment organization that focuses on a speculative market would seek to obfuscate its investment strategy, since that would be the source of its success - as opposed to some pension fund/life insurance company investing into low-risk low-return ‘blue chips’.

There’s still a handful reasons why investors go to outside financial ratings:

  • An analyst team is a major up-front investment, quite tall for an individual investor or a minor investment organization/an organization that makes venture investments as a sideshow, making outsourcing the analysis desireable; John Moody hit it big with his ratings manuals at the turn of the century, once the grip of major investors like J.P. Morgan on the market slackened in favour of massive amounts of small private investors.
  • Starting about 1970, the margins of the Big Three ratings agencies were tanking hard, and so they converted to a different business model - instead of selling thick manuals, they began to ask bond issuers for money while publishing the ratings gratis. Their ratings would now include info not found in publicly available financial statements, hopefully increasing the accuracy of the assessment. Of course, the relationship began to look somewhat incestuous - around 2007, Moody’s rating staff were rating complex derivative securities specifically designed by Moody’s advisory staff to get a high Moody’s rating.
  • But ultimately, the biggest generator of demand for ratings under that model are financial regulators outsourcing their regulatory function. Under Glass-Steagall the Fed began turning the ratings agencies into gatekeepers: you need a non-junk rating from one of a very short list of NSRSOs in order for your securities to be at all allowed in portfolios of pension funds, and other orgs that marshall a lot of investment from individuals. ESMA does the same, back here CBR does the same, even though between roughly March and December of 2016 there was only one accredited agency...

AMA, I’ve written my postgrad thesis on that industry.

So, out of likes today, but:

Thanks for your analysis. It's not a field I have much knowledge in, so what you provided was quite illuminating.

So, I'm guessing your analysis would be "there are probably companies with more reliable data and estimates... but they're not giving up that information without some dollar-signs attached"?

I will confess: I was weirded out by a few of the choices made, but comments in this thread were what took it from "that's weird" to "okay, this might not be totally kosher".

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9 hours ago, Starman4308 said:

So, I'm guessing your analysis would be "there are probably companies with more reliable data and estimates... but they're not giving up that information without some dollar-signs attached"?

It would be a lot of dollar signs: that info is their secret sauce.

Once you dig in past the terminology this fund uses, you realize that they don’t want you to invest on your own, they want your money in their fund and they will invest for you. Which begs the question of why they’re publishing that rating beyond marketing purposes.

They talk about having insider access and an in-house analysis team. This is actually all standard practices for a VC fund - on top of that, because VC funds are large in comparison to start-ups, the finds tend to get their people onto the start-up’s board for added control - just with tolenization on top, and that part is kosher to my knowledge.

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