Hybrid Air Vehicle Has Bumpy Landing

The Airlander 10 in flight, against a pink sky

Airlander 10, the giant aircraft funded by the crowd to the tune of £2 million for a 5.5% stake in Hybrid Air Vehicles Ltd. (HAV), has made its maiden flight, and had its first crash. The prototype damaged its cockpit, we understand.

While others discuss the engineering problems, we want to look at the impact on equity investors.

This is what risk-taking looks like, people.

Whether you believe startup investment is a great adventure, or an extraordinary delusion,  you will find something in the story of the Airlander 10 to confirm your faith - or your lack of it.

Firstly, the numbers involved are huge - even bigger than the vehicle itself, which resembles Pink Floyd's pig from the seventies, and has been nicknamed 'The Flying Bum' by the affectionate british public.

 HAV Ltd's pitch on Crowdcube mentioned  a fifty bilion dollar market. An exaggeration? probably not, given the amount of air freight that crosses the world's skies daily. A low-carbon alternative to the jumbo jet has a huge potential market.

Second, the rumour machine has already gone into overdrive on social media.  It was reported that the Airlander 10 was a dodo that couldn't fly. Then it was reported it had problems in flight, and hit a telegraph pole. Then, the company announced there were no problems on the test flight, but the Airlander damaged its cockpit on landing. 

And that made some people mock HAV for saying "it only crashes when it lands!" (read the comments)

Third, things take time. Prototypes are fragile and inelegant expensive - even the ones that don't look like a giant bottom -  and the best startups' plans change as soon as they come into contact with reality.

This, ladies and gentlemen, is normal early stage equity investing.  It looks ridiculous and it feels exciting.

Will the 911 people who put money up on Crowdcube see a return? It's too soon to know. Did they invest at a realistic valuation? A lot depends on whether the management team can hold together, solve the problems that occur, spend the money wisely, and keep moving the project forward.  

This is what startup equity is all about in every business. It's just easier to see the risks being taken, and feel the emotions, when the product you've backed is a Giant Flying Bum Over Bedfordshire.