Case Study – Hadrian

The eighth and final session of the Course on “The Business and Economics of Space” was on Tuesday, Nov 30. This session was a case study on a startup company looking to do Precision Component Manufacturing for the Space and Defence Industries , Hadrian.

We were to use the classic Harvard Business School Case Study method to analyze a potential investment in an early stage start-up factory, Hadrian. The scenario was that we were a family office with $1B under management. We were given an early Hadrian deck for fundraising. Simultaneously, a private equity firm is raising $500M to buy, merge and update existing factories in a Leveraged Buyout model.

Using the tools and techniques and knowledge we had learned in the course we broke out into teams to discuss the following;

  • The difference between a startup vs a rollup ?
  • What market do each of them serve – the same of different ?
  • Which would we invest in ? Start-up, LBO, or neither

I wont share the deck or discuss the specifics of Hadrian here. For that I suggest taking the Course !

Things we thought about included

  • How fragmented is the market ?
  • How do you scale the solution ?
  • Who are the end customers ?
  • What is the relative power between suppliers and buyers ?
  • What are the barriers to entry ?
  • What returns do we expect for VC vs Private Equity ?

Some of the things we discussed in our groups were the ;

  • Market Opportunity ; the Dynamics, the TAM size and growth, and the attractiveness
  • Startup Advantages ; The potential for disruption, with breakthrough technology , Return on invested capital
  • Private Equity Advantages ; Revenue Stream Profile, Risk Profile, Return on Invested Capital
  • Team & Capabilities ; Did they have Domain Expertise ? Was there Founder – Market Fit ?

There was very lively discussion both in the breakout groups and also when we all got back together. There was a wide range of opinions on whether to invest or not and for how much.

The last hour we had a Q&A session with Chris Power, Founder & CEO of Hadrian

It was a very interesting and informative session where we got to use a lot of what we had learned to date.