S3E7: Before American Dynamism Had a Name – Jonathan Lacoste on Concentrated Frontier Tech Investing

“When we met Bryon Hargis, who came from SpaceX, it was instant. He was the person to attack hypersonics manufacturing.”

Jonathan Lacoste doesn’t wait for traction. He finds founders before they start the company and writes the first check.

Space VC launched in 2021, a year and a half before Andreessen announced their $500 million American Dynamism fund. By the time frontier tech became hot, Jonathan had already backed defense hypersonics, thermal energy, and space infrastructure.

But the name misleads. Space VC isn’t a space fund, but a frontier tech fund investing in “space for earth” companies.

“Space is just a physical location that can serve as an extension of our technology stack,” Jonathan explains. Not exploration. Not colonization. Infrastructure that makes life on Earth better. Starlink. GPS. Technology that happens to use space but exists to solve problems here.

That thesis extends beyond space. Jonathan spends 90% of his time now on energy, grid infrastructure, and robotics. Carmen Industries (thermal energy), Castellan (defense hypersonics), True Anomaly (space security)...these are infrastructure plays at the intersection of digital and physical.

Fund I: $3 million, $100-250K checks. Fund II: $23 million, $750K-$1.5M checks. Both funds: 15 companies each. The check size went up because his founders asked for it, and the concentration stayed the same because the math works better.

“A single exceptional investment moves the needle more in a 15 company portfolio than a 30 company one,” Jonathan says. “The limiting factor isn’t deal flow. It’s conviction. can you find, win, and deeply support 15 companies worth backing?”

He spends an inordinate amount of time thinking about markets and answering “what’s the fewest number of things I can get right about a trend or founder to generate meaningful returns?”

“There are only going to be a handful of generational companies in the space and defense ecosystem.” He puts the number at 8-12 industry-wide. SpaceX and Anduril already occupy slots. His bet is that if you’re playing this sector, you need to be early and concentrated enough that the handful of winners actually matter.

When you’re deeply embedded with 15 companies instead of 40, you know what’s working and what isn’t. You know the risks.

“Venture has overemphasized and over-allocated towards software and AI over the last 20 years,” Jonathan says. Energy grids, robotics, defense manufacturing, construction tech, systematically underfunded despite mounting opportunities.

The companies he backs use AI and software as the backbone, but the output is physical. Hardware matters. Physics matters. This is the rotation of capital moving from purely digital toward companies building in the physical world.

Jonathan’s following the talent, not the headlines which comes back to the same instinct that led him to investing in frontier tech.

Special thanks to Evan for the intro to Jonathan! 🙏

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