Building a hypersonic plane
How did Sarah raise $48M? How does Venus Aerospace sell to the government and lobby Congress?
We've all been there. We've all experienced the pain of those never-ending intercontinental flights. The mere thought of the 15-hour journey that separates my hometown in Italy from the Wefunder headquarters in San Francisco sends shivers down my spine.
Meet Sarah “Sassie” Duggleby, co-founder and CEO of Venus Aerospace. When she and her husband Andrew were stationed in Japan for work, the exhausting 13-hour flights back to Texas opened their eyes to the challenges of long-distance travel. Challenges that become even more daunting with jet-lagged kids! One evening, as they sat on their balcony overlooking Tokyo Bay, they launched Venus Aerospace to solve this problem.
Their goal is to build a hypersonic plane that can get you from San Francisco to Tokyo in just one hour.
So what has happened since that evening? How did she raise $48M? How do they sell to the government and lobby the Congress? What is it like to be a woman CEO in the aerospace industry? Let's find out.
Tyler Denk, Andrew Gazdecki, Jesper Thomsen, Fares Ksebati, and almost all the other founders interviewed for Founder Secrets share a common trait: they have an unfair advantage, because they have deep insights about their industry, and the problem they are solving. Venus Aerospace is no exception.
"Before starting Venus," Sarah explains, "both my husband, who is my co-founder and CTO, and I were working at Virgin Orbit. I was part of the business development team, and he was in charge of propulsion research and development, trying to figure out how to 3D-print rocket engines. Like most founders, we had an intimate insight into this technology and how the world could change with it."
One evening, as they sat on their balcony overlooking Tokyo Bay, Andrew shared one of these insights: there was a new rocket engine that had been theorized for 30 years, that if proven, would change everything. "If someone commercializes and puts it on a plane," said Andrew, "we could be home in an hour." It was finally proven at an academic level, and the Dugglebys knew it needed to be commercialized. "I don't see who else is going to do it," said Sarah. "Maybe it's supposed to be us.”
Sarah knew that this new engine would be a game changer. However, commercializing it wasn't her only challenge. After six months and 200 conversations with investors, she learned a valuable lesson: being a skilled engineer isn't enough. To succeed as a founder, you need to be a good storyteller. "We were raising a seed round of $3M to validate the engine in a university lab. It took 200 conversations with investors to get 10 of them on the cap table.”
That's 190 'no’s' to get 10 'yes’s'. We all know that venture capital is a numbers game. However, those 'no's were not just a matter of statistics. It came down to storytelling. "Your pitch deck is horrible," said one of their early investors. "Our pitch deck was designed by us, two engineers,” says Sarah. “I thought that the story was clear. I thought that investors wouldn't care about the color scheme or graphics of our deck. As an engineer, that made me mad. Once we hired someone to refine our story and design our deck, fundraising became much easier.
I've learned that one of the keys to being a founder is to be a good storyteller. You're inviting people to come along on a journey with you. You need to be able to tell a compelling story. You need to be able to make them want to be a part of it.” And so she did. She shared that story and successfully raised a $3M seed round. Not long after, she also secured a $20M Series A. This time, however, it didn't take six months. Their seed investors were so impressed with their progress that, without Sarah asking, they just said, "You guys are crushing it. Here's $20M. Just keep building.”
Selling to the government
Being a capital-intensive business is not the only challenge within the aerospace industry. Working with the government also presents its own set of difficulties. The first one is that it moves slowly. Sarah admits, "Selling to the government is hard. We are a venture-backed startup. We move fast, break things, and learn on the go. But the government doesn’t move fast at all. While we have received some small business grants, the amount of work required to obtain them often feels like a net loss."
Being a small startup in an industry dominated by giants compounds the problem. Sarah explains, "When decision makers have to choose between an industry giant like Raytheon and our company, they will likely choose Raytheon. It's a matter of misaligned incentives. We are driven to push the boundaries of technology, while decision makers are only incentivized to not mess it up.”
To make matters worse, even if a decision maker is initially inclined to work with you, it can also happen that they just leave. "It’s a fascinating flywheel of constant relationship building," notes Sarah. "Your contacts retire or they move to a different role and get replaced by someone who doesn't like that technology, and might want to go a different route."
Regulations and lobbying
Another lesson that Sarah learned along the way is that the aerospace industry is about more than just engineering and groundbreaking innovations; it involves navigating the corridors of politics and regulations. She explains, "Early on, our board suggested that we start lobbying. At first, I didn't understand why we should do that. Once we brought in a lobbyist and started building those relationships, I immediately understood why."
One of the key lobbying areas they focused on was the regulations surrounding hypersonic and high-speed flight. The Federal Aviation Administration (FAA) is responsible for regulating and overseeing civil aviation in the United States. Sarah explains, "The FAA reauthorization bill is passed every five years. If we don't include language about hypersonic flight, we will have to wait another five years."
Working with an experienced lobbyist helped Venus connect with the right people in both the Senate and the House to address the language regarding high-speed flight. The guidance from their board proved to be invaluable. As Sarah puts it, "Having board members who can provide wisdom in areas such as regulation, lobbying, and navigating other aspects is crucial. We have a board observer whose company is probably two stages ahead of ours. He has been incredibly wise in providing guidance.
Venus Aerospace has quickly grown from a team of three to a team of 80 in just two years. One of Sarah’s initial challenges was delegating some of her responsibilities. She recalls, "I had some advice early on that we had to 'share our Legos' if we wanted to scale. But it's very hard to let go of some of those Legos. There are some things that have been mine from the beginning. I’ve realized that if we want to go far and go fast, I've got to learn to let go.”
As the team continued to expand, another challenge arose: ensuring that everyone was aligned and working towards the same goals, especially with a hybrid team. Sarah explains, “About a third of our company is remote. If you are firing rocket engines, you need to be here in Houston. If you are not involved in hands-on hardware work, you can work remotely. We have different teams working on various tasks, and our biggest challenge is to ensure smooth communication and information flow. We need to ensure that everyone understands what's happening, and why we're doing it.”
Creating a culture where everyone can thrive is another crucial aspect of building a successful team. Sarah emphasizes that Venus Aerospace's culture is based on five core values:
Get Home Safely: At 38 years old, I was the oldest female engineer at Virgin Orbit. By the time they are 40, every female engineer in the aerospace industry has left. A female friend at another aerospace company told me she cried every day in the bathroom. That's just not okay. We have two young daughters ourselves, and we want to build a family-friendly culture. Our company vision is to be home for dinner.
Mach 9: We're trying to build a Mach 9 vehicle, which means nine times the speed of sound. We want the company to be moving at Mach 9 as well.
Eliminate the drag: When you're putting a process in place, is this allowing you to move at Mach 9 or is it slowing you down because something is getting in the way? If something is blocking you, we need to work through it, so our team can move at Mach 9.
Enjoy the flight together: People with a positive mindset perform way better than those who are negative or even neutral. We're on a marathon and we want people to enjoy what they're doing.
Chart a new course: There's no recipe for what we’re doing, because no one’s ever done what we’re trying to do. It's okay to use innovative methods and technology, as long as you do it safely.
"Having those guiding principles," notes Sarah, "has really helped set us up for success and has given us a common framework of how we operate, treat people, and get our work done."