AWM Insights Financial and Investment News

Join us for this episode of AWM Insights as portfolio manager Mena Hanna sits down with Roger Ferguson, AWM's venture and private equity specialist and a former professional athlete. Together, they break down the recent SpaceX IPO, exploring what it means for investors—whether you’re early to the game, joining the retail wave, or navigating complex private market access. Roger and Mena share inside stories, sharp perspectives on venture capital, and practical strategies for building lasting wealth while avoiding costly mistakes. If you’ve ever wondered how the pros approach headline-making investments and what really matters when chasing generational returns, this episode is a must-listen.

Chapters
(00:00) Introducing the Team and Guest Insights
(01:34) SpaceX IPO Highlights and Market Dynamics
(05:00) Timing and Outcomes for Investors
(08:00) Access Strategies and Fee Structures
(10:14) Long-Term Approach and Diversification
(12:40) Venture Fund Concentration and Market Efficiency
(15:23) Retail Investor Impact and Lessons

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Creators and Guests

Host
Mena Hanna
Senior Investment Analyst at AWM Capital

What is AWM Insights Financial and Investment News?

A bite sized discussion on timely financial news and investment topics, to help you maximize your net worth and wealth for the next generation with Justin Dyer and Mena Hanna of AWM Capital.

INTRO_HOOK: SpaceX was founded
in 2002, and so we're talking

about an IPO 24 years later.

We've seen fees that are at, like, 4%-
It's crazy … management, 40% carry.

So 40% of the actual return
doesn't even go to investors.

How you get in actually matters.

There was a time and a place where no
one wanted to invest in SpaceX, and now

we're seeing a ton of deep tech and space
companies come out on a regular basis.

There are people who say they have access,
but they're really paying an exorbitant

amount just to say they're in SpaceX
and talk about it at a dinner table.

In the short term, it's a voting machine.

In the long term, markets
act as a weighing machine.

A lot of people are, are rich,
but rich in stock, not cash here.

Roger Ferguson: Hi, everyone.

Welcome to an episode of AWM Insights.

My name is Mina Hanna,

portfolio manager here at AWM, filling
in for Justin, our CIO, who's taking

some much-deserved PTO out in Europe.

So, so yeah, you, you have
me leading the charge.

You have a new face also on the podcast,
Roger Ferguson, who is near and dear

to all of our hearts internally.

Roger heads up our, uh, our venture
and private equity vehicles, along with

Justin, and is really our boots on the
ground person, meeting all of these fund

managers, meeting even founders, getting
us into the right rooms and talking to

the right people, working on the right
deals, looking in the right places.

So yeah, definitely adds a lot of
value internally, and, and yeah,

he's been on the team for a year.

What else?

Roger is a profe-- former professional
athlete, was, uh, drafted, played

lacrosse professionally for three years,

so,

uh, the investment team just
isn't full of nerds anymore.

We finally have a professional athlete
on the roster, which is awesome.

I'll take that.

Uh, went to Brown.

Roger, what else, uh, what else can I add?

out of, here.

I know I, I…

Mena_Hanna: What did I forget?

Roger Ferguson: didn't forget anything.

That's too much,

and even bringing up the sports
career, like I say, you know,

it's, it was $1,000 of beer

money on the weekend, so it's hard
to talk to professional baseball,

football, golf, basketball, et cetera.

Like,

it's hard to claim
professional, but I'll take it.

Mena_Hanna: It Counts.

man.

Counts.

Um, and it's, it's a timely introduction
really because we're gonna be

talking SpaceX a little bit more.

I know we recorded an episode last
week just on the theory behind SpaceX.

SpaceX hadn't even IPO'd yet, so
we were talking very theoretical.

On today's episode, we're just gonna be
talking kind of applicationally and how to

think about these outcomes, how to think
about the position now that it's actually

in the public markets, how to effectively
access the right private companies in the

private markets, and then some nuance that
I think sometimes can get past, uh, the,

the average investor, which we definitely
want, uh, our clients to be educated on.

So Roger, kind of on, on that end, it's
been four days with SpaceX in the market.

What's happened?

Roger Ferguson: Yeah

uh, a lot.

Uh, just get setting the scene, I guess.

So

Yeah

SpaceX, uh, came out what
literally is your point, like, you

know, not even a full week ago.

Largest IPO on record, uh, one
point seven five, one point

seven six trillion dollars.

Again, crazy to say trillion.

Uh, you know, I think we're used
to billions here, which is insane.

But, uh, overall, yeah, the, the,
the share price, one thirty-five,

uh, or is it a hundred and
thirty-five dollars when it came out.

Um, really only, uh, tendered offer.

They only, excuse me, uh, released about
four percent of shares across SpaceX,

so, uh, they raised it seventy-five
billion dollars was the goal here.

And, uh, we saw a huge
pop in the first few days.

So, you know, opened up, uh, one…

closer to one fifty.

It was like, you know, eleven
percent or so increase.

Then that same day closed around
one sixty-one, which ultimately, you

know, it briefly touched at one point
about a hundred-- about twenty-five

percent, uh, you know, intraday gains,
which is again, insane for a company

that, you know, is, let's say, just,
just coming to market in some ways.

Uh, so it was a bigger than, uh,
you know, two trillion dollars, I

believe, at one point, so larger than
Tesla, another obviously Elon baby.

Um, so just, just kind of a wild few days.

And, um, I think, uh, we, we've seen,
you know, a lot of, uh, you know, orders

against this or a lot of people in
the market trying to get into the IPO.

Uh, this is

very, you know,

supply-demand dynamics, if you
will, where, uh, not a lot of

supply but a lot of demand.

I think we saw something like
three point five to four X

oversubscribed for

that.

Um, and, you know, we've seen
some pullback, you know, overall.

I mean, some of that was just
today in general with, uh, you

know, new Fed Chairman Kevin Warsh.

So I won't, you know, we won't
get into too much detail on that.

But, um, yeah, a lot of
people have become very rich.

I'll say rich, uh, you
know, but rich on paper.

Um, all of this is in stock and in lockup.

So even Elon, though he's now worth more
than a trillion dollars, his entire net

worth is, is really locked up in a handful
of companies, and he can't really sell

'cause of the negative signal factor.

So yeah, a lot of people are,
are rich, but rich in stock,

not, you know, not cash here.

Mena_Hanna: Yeah.

Yeah.

Definitely, uh, definitely rich in stock.

But, but yeah, there's going
to be a lot of lockups.

There's gonna be more supply
that actually hits the market.

Today, I thought it was an
interesting pullback, obviously

just negative market day overall.

Um, but a five percent pullback
on some pretty aggressive, call

it retail buying pressure, which
we'll get into the retail side.

We'll get into retail traders
flooding into the market here,

and what we think is, is the right
move and what we think is the pro

strategy versus the amateur strategy.

But, but yeah, a lot of people wanted
to get in, not a lot of people could,

and really the beneficiaries are the
people that got in earlier, which kind

of tees up the, uh, the next point.

Depending on when you actually
got in, your outcomes may

look extremely different.

We were just on the phone with
someone who is kind of flexing

that they got into SpaceX.

Well, they got in at
pretty much the last round.

And that's not to say
it wasn't a bad markup.

It was at eight hundred billion,
dollars, which is kind of insane to say.

That was the last fundraising
round that happened in December.

But it's still, it's still a good outcome.

Some people now, the people that got,
I guess, IPO shares got in at that one

point seven trillion dollar figure.

Some people that have been just
collecting shares and, and buying right

now in the public markets are buying
in at two trillion, which in, in a

lot of cases you're actually buying
in and valuing the company more than

Amazon, even though if you look at it
from a revenue standpoint, Amazon makes

magnitudes of orders more in terms
of just their sales, the amount

of revenue that they're actually
collecting top line, and then earnings.

SpaceX doesn't earn any money.

They're actually still burning capital.

Amazon's

obviously

a profitable company.

So yeah, kind of a lot there, Roger.

But what do the action-- what do the
outcomes, excuse me, actually look

like for these different kinds of
investors, and when did it actually make

sense to get into a company like this?

Roger Ferguson: I'll answer maybe
the, the second question first.

Maybe it's a cop-out answer, but,
you know, earlier the better.

Um, of course, we talk
about the private markets.

You wanna know, you know, the
founders and the, you know, the

people starting these unbelievable
company- companies before we're seeing

headlines in The Wall Street Journal.

So, uh, I'll, you know, give an example
here where, uh, you know, Tesla,

I mean, excuse me, uh, SpaceX, you
know, was founded in 2002 and so we're

talking about an IPO 24 years later.

And I mean, the venture ecosystem,
people say it takes, you know, call it

five to ten years, maybe ten to fifteen
years is sort of on the longer term

and, and now we're looking at twenty
plus when you're locking up this money.

And so again, to answer your second
question, earlier the better is ideal.

Um, and, and it even set the scene
where to the comment you were just

mentioning about the person we met
who got in at eight hundred billion

valuation, and now it's at one
point six, one point seven trillion.

That's a two X, right?

That, that is not actually venture returns
because we're always looking for something

that's closer to five if not ten X.

That's really the name of the game is how
do you five X or ten X your money here?

And look, even though eight hundred
billion doesn't sound like, uh,

maybe a lot compared to the trillion
number, it, it really is when that…

You-- that number, eight hundred,
eight hundred billion, used to be,

you know, a number that you would
see substantial venture returns.

It's just not the case anymore
in the private markets.

And, um, maybe taking that even a step
further, you asked kind of, you know,

what, how are people getting into this?

And so I'd say there's sort
of three chunks, right?

There's the people who got in
early, whether it's, you know, early

investors, employees, et cetera.

And there are also people we know
who, you know, had structured

access, which we'll call, you know,
secondaries funds or people who just,

you know, venture capital firms who
invested early institutional capital.

But the question that we keep asking
is you get in direct or is this fees

on fees on carry on carry and SPVs?

again, there are people who say
they have access, but they're

really paying an exorbitant amount
just to say they're in SpaceX and

talk about it at a dinner table.

So there's always that nuance when
someone says how, you know, "I'm in a

company," we're sort of like, "How?"

And they're always skeptical in some ways.

So that'd be sort of the first chunk.

As you just mentioned, there's
the IPO folks, and then lastly,

the retail wave, as you just said.

So I would, I would say we wanna be
on the institutional early side but do

it systematically, programmatically.

Again, those are words you've probably
heard, you know, Justin and me to say

routinely, but I'd say that- that's a
true philosophy for us internally here.

Mena_Hanna: Yeah.

And kind of doubling down on,
on what you said just about

fees and, and the true access.

It's sort of like getting Super
Bowl tickets or I guess now World

Cup tickets for face value versus
really paying out for them, buying

them on the secondhand market.

We've seen fee structures on the SBV
side for people that aren't able to get

in directly and are getting secondary
access that's not very efficient.

We've seen fees that are at like 4%

management,

40% carry.

So 40% of the actual return
doesn't even go to investors.

It actually goes to the
manager or the person that is

actually giving them access.

So yeah, how you, how you
get in actually matters.

Obviously, when you get in from a value
standpoint matters a ton, and what

we are after and how we do invest our
private funds is for those outsized

returns, not just to hit singles and
doubles, it is to hit that home run ball.

And I think sometimes
people lose sight of that.

So, so yeah, that is,
that is a great point.

Um, I guess-

yeah

Roger Ferguson: just, gonna like kind of
piggyback here and maybe taking that, you

know, a step further into how we do it.

I think part, that's part of the
reason why we stay invested and why

we have our fund-to-fund structure,
and why we try to, you know, have a

thesis-driven approach where we're,
I don't wanna say front running, But

we're before a lot of these things.

Like, like I said, 24 years of SpaceX,

there was a time and a place where
no one wanted to invest in SpaceX

and didn't think this was gonna be
a big thing, and now we're seeing a

ton of deep tech and space companies
come out on a regular basis.

That's something we talk about
internally is, is this still

really the best place to be?

What's the next wave here?

We talked about dotcom boom.

We may be in a AI boom, right?

But then what happens
after the boom is a bust.

And so what we really spend our time
focusing on is staying invested in

the right things that we think are
gonna make sense five, 10, 15 years

down the road that are not the hot
topics today, but will be the next

up and coming wave, because that's
really where, especially internally at

AWM, we focus on the long-term game.

And again, we've talked about being
the casino, not the gambler here, and

we want to spend time really putting
the odds in our favor and diversifying

across vintages, sectors, et cetera.

So if one of them starts becoming
hot, that's what's gonna ultimately

become the SpaceX outcome and
return funds multiple times over,

get you to that five, 10 X number.

Mena_Hanna: Yeah,

and that diversification
is, is so important.

We've heard of a lot of other
rocket companies go out of business.

There's that one famous one that was
3D printed fully that raised one point

three billion dollars of capital, and
they, they just went completely under.

So diversifying your bets, accessing
these investments early, accessing them

at the right capacity at the right time,
not paying crazy fees, making sure that

you can also bear that twenty-year period
of time that you were talking about.

That liquidity piece is so
important for investors.

You have to be chasing these
companies with the right capital,

with your long-term capital,
because the outcomes look great.

When you get your money back is
a little bit uncertain, so you

have to be very, very strategic.

Roger, there was one thing that came
up actually before our call that

you mentioned around the top venture
capitalists raising capital in

proportion to the rest of the industry.

I think that would be a great point
to actually hit on as well …as

we talk about kind of
accessing the markets and, and

potential market efficiency.

Roger Ferguson: So we were talking,
this is a data point that, that me

and I were chatting about earlier.

So something like 12 of the
top venture funds this year,

raised, we'll call it, you know,

$80

billion in you

know, 18

months or so.

We'll-- like, we'll pretend, you know,
a year, you know, year to 18 months, and

that is larger than the entire venture
capital ecosystem raised two years prior.

And so just how the market has shifted,
uh, this is the equivalent, you know,

put it in baseball terms, it's like going
out and only signing, you know, a big

hitter for all of the money you have,
but not thinking about middle inning

relievers, relievers, just, you know,
a-and obviously anyone else, you know,

a-around the baseball diamond here.

It's kinda crazy to think about all the
money going to these handful of folks as

if there's not opportunity on the other
end here, where you know you need people

who have access to unique sectors and
thesises that, that right now those 12

are not gonna see every company that's
ever been started or ever been made.

These people are not going and knocking
on every door, uh, you know, every garage

door like the old Bezos adage of, you
know, and, you know, Bill Gates, et

cetera, all these people that are building
that have become these big companies.

Uh, I would just say it's kind of
insane that all of this money is

flowing into a handful of people, but
again, access and the reason sort of

I guess my job exists at this point is
so that I can go sourcing these deals

and finding the best opportunities that
are outside of just these 12 names.

Because everyone seems to be focused
on those, and diversification means

looking at the rest of the market here.

Mena_Hanna: Yeah, it's like
spending a hundred million dollars

each on two players and then
having a bunch of minimum guys.

Like, you still have to be very
thoughtful about those minimum guys.

And a lot of times those are the guys
that when you think about bang for

your buck actually produce more value
and, and more war per dollar of actual

salary Than the biggest guys a local

Roger Ferguson: the Knicks.

I mean, look, we spent

Mena_Hanna: Yeah

we went

Roger Ferguson: know, 15 minutes
not saying the word Knicks,

but you know, uh, we made it.

Like the Knicks won because Jalen Brunson

was willing to take less of a salary
so they could actually use that

money to invest in other players.

They were able to get Karl-Anthony
Towns and other guys around that

literally of the starting five was
built because Jalen Brunson was willing

to not take the max contract a few
years ago, and that money was literally

what brought them a championship.

So in some ways it was like
the most organic Moneyball

you could possibly imagine.

And in venture, though it sounds
ridiculous to compare it to

sports maybe in that way, like
that's really what you have to do.

You have to find the best value at the
right time and build an entire team around

that, as opposed to just going for the
hot, you know, big name or, you know,

putting all your money or all your chips
on one, you know, one bet because we know,

we've seen, and I think everyone listening
will know that that doesn't work, right?

It may work once, but statistically
it's not gonna work every time you wanna

put in, you put money behind something.

Mena_Hanna: Yeah, the Supermax contract
just doesn't make proportionate sense

anymore, at least in this space.

Kind of, kind of closing this out, what
is going to happen with the retail wave?

And I know this is a little bit
of a crystal bally question,

I'm putting you on the spot.

But what's gonna happen with the retail
wave that comes in and tries to pursue

the institutional investment that they
didn't have access to that now they can?

Like, what's gonna happen with that?

We talked about the psychology
on the last episode.

What do you foresee that
outcome actually looking like,

and how, how do you kinda play

this game like a pro?

Roger Ferguson: Yeah.

Um, would say we've seen hype waves
before, for better or for worse.

I don't wanna equate this to GameStop
or Bitcoin, but you know, what

ultimately happens in those sort of
rise and demise type stories is the

big guys end up doing really well.

So whether it's the insiders or
employees who trade out of that or

people who got in on the IPO and
are trading when things hit a high.

And then what happens, you get a bunch of
retail traders when supply really expands,

their demand stays high, and they don't
realize the dynamics have shifted on them.

And so they go in and buy, and ultimately
what happens is they buy at the top

and they lose a lot of money, right?

There's winners and losers in every
trade, for better or for worse.

and And, ultimately, uh, the people

who are, who are in the know and the
people who right now, like I said, are

paper rich, who wanna become rich in
six months when their lockup period is

over and retail traders are continuing
to flood in, these are the people that

are gonna be exiting for a lot of money.

And people…

unfortunately, I think retail traders
will be, be left holding the bag.

Now with that said, I also, you

know, I'm not gonna bet against Elon.

I, you know, I'm smart enough to
know as an investor that every time

someone does that, he continues to
prove them wrong no matter what it is.

And so say, you know, still probably
feeling good long term about SpaceX

and their, you know, possibilities
of becoming a company and really

seeing some revenue growth.

But I think in the short term,
uh, you know, people, some people

are gonna get hurt and, and be
left struggling a little bit.

But ultimately, again, like I said,
give Elon another fifteen, twenty

years, I'm, I'm not betting against him

Mena_Hanna: Yeah.

Yeah.

In the short term, you
know, it's a voting machine.

In the long term, markets
act as a weighing machine.

We, we…

Yeah, we use that all the
time, and I think in this case

it's gonna be no different.

And that's a, that's
a great place to wrap.

I hope you guys all
found that informative.

I know we talked about theory again today,
made it a little bit more applicational.

Um, yeah, we, we talk about a lot of
theory here and, and hopefully that is

important and useful for all of you.

If you guys do have any questions
related to SpaceX or really el-

any other topics that you want us
to cover, please reach out to me

directly, text me, call me, whatever.

My number is 626-862-0355.

And on that note, own your wealth,
make an impact, and always be a pro.

Thanks for listening.