by Fred Fuld III
SpaceX is expected to go public in less than two weeks. Investors are interested in following Elon Musk by investing in the companies he is involved with, other than Tesla (TSLA). With the success that Musk has been having with rockets and satellites, many investors see the growth potential in those areas.
Fortunately, there are eight ways to participate in the growth of SpaceX, even though it is not yet public.
Before I discuss these options, I want to tell you a story about my Apple (AAPL) experience.
Buying Apple Before It Went Public
Many, many years ago, before Apple went public, I was using an Apple II computer with the VisiCalc spreadsheet program to create financial planning worksheets. I couldn’t believe that calculations could be done so easily on a small machine and then printed out. I was working for an investment management firm at the time and wanted to invest in this little Apple Computer company. (That was the name of the company before it was changed to Apple Inc.)
Unfortunately, it wasn’t publicly traded. But fortunately, I read in a Forbes article that a publicly traded venture capital company called the Nautilus Fund, which was a closed end fund, that had an ownership interest in Apple shares. The fund held shares of mostly public companies but also some shares of a few private companies. So to make a long story short, I bought some shares of the Nautilus Fund, Apple went public, and Apple shares were spun off to the Nautilus Fund shareholders. The rest is history.
Investing If Not Accredited
So you can see why investors, including myself, want to find some way to get access to SpaceX shares.
If you are an accredited investor, you are probably aware of the options available to you for buying shares in private companies, and where there might be a minimum investment of $25,000. These services include Hiive, Forge, Microventures, and even NASDAQ Private Market.
An individual accredited investor is someone who has a net worth over $1 million, excluding primary residence (individually or with spouse or partner) and/or has an income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year. There is one other qualification that can allow you to meet the accredited requirement. If you are an investment professional with a Series 7, a Series 65, or a Series 82, then you may qualify. There are different rules for organization investors.
But if you are not an accredited investor, there are still eight ways for you to participate.
First, let’s cover the history SpaceX.
SpaceX
Space Exploration Technologies Corp., commonly known as SpaceX, is a private aerospace manufacturer and space transportation company founded by entrepreneur Elon Musk in 2002. Musk established SpaceX with the ambitious goal of reducing space transportation costs to make space exploration and colonization more accessible, ultimately aspiring to enable human settlement on Mars.
Headquartered in Hawthorne, California, the company quickly gained attention for its innovative approach to rocket design and its focus on reusability, a concept that has transformed the aerospace industry.
SpaceX made history in 2008 when its Falcon 1 rocket became the first privately developed liquid-fueled rocket to reach orbit. This success was followed by a series of groundbreaking achievements, including the development of the Falcon 9 rocket, which features reusable first-stage boosters, and the Dragon spacecraft, capable of carrying cargo and crew to the International Space Station (ISS).
In 2012, Dragon became the first commercial spacecraft to dock with the ISS, marking a significant milestone in public-private partnerships in space exploration.
In 2020, SpaceX achieved another historic milestone with its Crew Dragon spacecraft, which carried NASA astronauts to the ISS as part of the Commercial Crew Program. This made SpaceX the first private company to launch humans into orbit.
Beyond crewed missions, the company has developed the Starship rocket, intended for deep-space missions and capable of transporting cargo and passengers to the Moon, Mars, and beyond.
SpaceX has also revolutionized global communications with its Starlink project, a satellite internet network designed to provide high-speed internet access worldwide. By combining technological innovation with a vision for humanity’s future in space, SpaceX continues to play a pivotal role in advancing aerospace technology and shaping the future of space exploration.
Ways to Invest
- ARK Venture Fund
There is a closed-end fund called ARK Venture Fund (ARKVX), which reportedly has over 10% of it’s assets in SpaceX, in addition to ownership of shares in a couple more Musk companies, X and xAI.
At the time this article was written, an individual investor would have to buy the stock through SoFi. As a matter of fact, for a limited time, SoFi is offering $25 worth of free stock including fractional shares if you sign up through THIS LINK. There are dozens of choices of free stock that you can choose from.
According to the fund prospectus:
“Unlike an investor in many closed-end funds, Shareholders should not expect to be able to sell their Shares regardless of how the Fund performs. An investment in the Fund is considered illiquid.”
It also says, “Unlike many closed-end funds, the Shares are not listed on any securities exchange. The Fund intends to provide liquidity through quarterly offers to repurchase a limited amount of the Fund’s Shares (expected to be 5% of the Fund’s Shares outstanding per quarter).”
The fund has a management fee of 2.75%. The price of the fund has gone up by 71.8% over the last twelve months.
2. Destiny Tech100
There is one other closed-end fund that owns SpaceX, called Destiny Tech100 Inc. (DXYZ),which trades on the New York Stock Exchange. It currently has over 20 companies in its portfolio with SpaceX making up the largest share at around 15%. Other stocks in the portfolio include Axiom Space, OpenAI, Instacart, Stripe, and Discord. The company has a management fee of 2.5%. In the last twelve months, the stock has gone up by 115.9%.
3. Baron Partners Fund (BPTRX)
The Baron Partners Fund (BPTRX) is a mutual fund that has approximately 33% of its portfolio invested in SpaceX.
4. Baron Asset Fund (BARAX)
The Baron Asset Fund (BARAX) is a mutual fund that has approximately 25% of its portfolio invested in SpaceX.
5. Baron Focused Growth Fund (BFGFX)
The Baron Growth Fund (BFGFX) is a mutual fund that has approximately 21% of its portfolio invested in SpaceX.
6. Baron Global Opportunity Fund (BGAIX)
The Baron Global Opportunity Fund (BGAIX) is a mutual fund that has approximately 20.5% of its portfolio invested in SpaceX.
7. Baron Opportunity Fund (BIOPX)
The Baron Opportunity Fund (BIOPX) is a mutual fund that has approximately 15% of its portfolio invested in SpaceX.
8. The Fundrise Innovation Fund (VCX)
This fund is focused on investing in potentially high-growth private technology businesses. SpaceX makes up roughly 5% of the fund.
If you are considering investing in SpaceX, even indirectly, you may think your investment will go to the moon or Mars. Just remember that there are extensive risks involved.
Disclosure: Author owns AAPL, TSLA, BPTRX, and DXYZ. No investment recommendations are expressed or implied.