Archer Went Public Just 3 Years After Launching and It Paid Off with Adam Goldstein

0:00It was a great strategy. People always ask me, are you happy you went public? Do you wish you could do it differently? It was by far, in a way, an amazing decision. I would do it over again every single time. And if you think about what the Olympics is, it's a source of inspiration for the countries. And so they like to show off new technologies. And so back in 1984, the last time LA hosted the Olympics, they had Jetpack. That was a huge phenomenon everybody talked about for a long time. And it's almost like the best sort of advertisement. for the industry that I think we'd have.

0:31Isabelle Johannesen: That was Adam Goldstein, the founder and CEO of Archer, which is building an electric vertical takeoff and landing aircraft. They're essentially a new generation of aircraft designed to turn a 90-minute drive into a 10 or 15-minute flight. Archer is developing the technology for both commercial air taxis and defense applications. And the company has been selected as the exclusive air taxi provider for the 2028 Los Angeles Olympics. But building an entirely new category of aircraft is incredibly capital intensive. And Adam knew from the beginning that raising traditional venture rounds of 50 million or 100 million at a time wasn't going to be enough.

1:10Isabelle Johannesen: So just a few years after starting Archer, he made a pretty unconventional decision to take the company public. We recorded these episodes back in May. So when Adam mentions the SpaceX IPO, that was still months away from coming to fruition. I'm Isabel Johannesson and you're listening to Build Mode. Hi, Adam. How's it going? Going great. Thank you for joining us. We're excited to hear about your journey with both your previous company and with Archer Aviation. Can you tell us a little bit about what you are up to these days? Sure. So I am the founder of Archer Aviation, and we are building electric vertical takeoff and landing aircraft.

1:46You can think about this as a modern-day helicopter. It is an aircraft that's designed to take people off the ground instead of driving 60, 90, 120 minutes into the air and getting to where you want to go in 10 or 15 minutes.

2:00Isabelle Johannesen: Wow, that sounds like sci-fi. Can you tell us a little bit about what use cases? I can imagine, you know, for consumers and for people just trying to get around the city in their commute, but also maybe defense. What is the plan? Yeah, there is both a civil and defense application. when we initially started building, the company was really designed around this typical helicopter use case for consumers. So you can think airport to city centers, like a great example, a trip that there's known demand, there's known customer willingness to pay. So people are typically, you know, driving in these 90 minute, you can think ride share like routes.

2:36So think, you know, Manhattan to JFK, the typical route that I've done it, you know, hundreds, maybe even thousands of times. It costs a lot of money. It's grueling because it takes you 90 minutes. You're not actually going that far. But if you could fly that route, all of a sudden it's quite exciting and you could get there in five minutes and you could do it for something that's a similar price as a high end of the rideshare. But the market really started to recognize that there were multiple use cases of these types of aircraft. And so there were defense applications that started to become very, very relevant.

3:05Post the Ukraine war, it was obvious that everything was switching towards what they call autonomous and tradable applications. So think unmanned, low-cost solutions. And these aircraft are very well suited for emissions like that as well. So you can think anything from, you know, troop movement to attack to supply chain, or I think contested logistics is what they call it. So bringing goods in and out of areas that, you know, may be in the middle of a war zone. And so all of a sudden you have these applications that went beyond with just moving people and opened up a whole new industry. So it's really the first new category that's been created in aviation in many, many decades.

3:40And so this is just the things we're thinking about today, but I think the applications are going to be much broader. We'll have to wait to see what the future holds.

3:48Isabelle Johannesen: Wow. Very exciting. But your journey didn't start out in this industry, right? You were the founder of a talent marketplace that was eventually acquired. Can you tell us about how you ended up here? Sure. So I actually, if you go back even further, I started out actually in the world of finance and I graduated college in a very unusual time in 2001. And there were tech had just like gone through a, you know, a pretty big downturn and there weren't a lot of opportunities to raise capital for tech companies. And the highest paying job I could find out of school was actually in finance. And so I took a job actually in investment banking.

4:24And it was an amazing opportunity because it really taught me how to work really hard to have really good attention to detail. And I met some unbelievable people. My analyst class at Merrill Lynch was around 200 people. And now I'm 46 and, you know, All my friends have grown up and they all run the big banks and funds. And so it's a great network to be a part of. But it was an amazing opportunity to just go out and learn. As I went through that journey, I really learned very clearly that I wanted to be an operator. And I didn't want to be someone on the outside kind of thinking and just building models about what was to come.

4:54I wanted to actually get into the arena and go build myself. And so it was really important to me that I took a chance to do that. And so I had an opportunity to start building really around the kind of 2010 timeframe when New York was going through this like amazing, like renaissance period where these new companies were starting to pop up. You had companies like, um, you know, we work in Peloton and Warby Parker and rent the runway and all these new, amazing companies. And I started a software business right in the middle of all that had a bunch of friends that were doing this and it gave me an ability to get into the action.

5:25And I really just love the sport of it. The game of it was like, so it was so fun. It was amazing. It was, you know, building teams and creating product and just watching New York go through this transformation. I went and ultimately started a business that happened to be in the talent space, but it was really all about the software that we were building and really the sort of fun, just amazing community that was being built in New York City around this period of time. But ultimately, I found, saw an opportunity to actually sell the business and did that to go out and start the business that I think would be more of a lifelong journey, which was a journey in hardware, building products that I could really see and touch and ultimately have real impact on the world.

6:02and it was something that I could see myself really doing for the rest of my career. Wow.

6:06Isabelle Johannesen: Yeah. I mean, that's quite a journey you've taken. And so when you started this company in aviation, I imagine you aligned yourself and partnered with some people who've been in the industry for a while. How did you end up with this specific idea? So in transportation, most of the big changes happen around changes in the powertrain. So you've seen this across the steam engine or the ice engine, internal combustion engine, or the jet engine, and now the electric engine. And each time that happens, you see these industries go through this massive amounts of change. And so when electric engines were really not just created, but the core underlying technologies, the batteries, the lithium ion batteries got good enough to provide enough energy and power density, it was all of a sudden a new industry could be born.

6:48You could build new types of vehicles. And of course, we saw that first on the ground. And Tesla became this huge source of, I'll call it inspiration, of watching what you you could do with this new type of technology. And of course, Elon did an amazing job building Tesla, but really creating a whole community of people that could be passionate about hardware. And so that's really where all this started. But the other thing that he did was he actually showed you could make money in hardware. And so there was a long time rule in Silicon Valley that they don't fund hardware very, very hard to raise any capital in the hardware industry before Tesla and really SpaceX were successful.

7:25And so I had sold my previous business and then went to go start a business that was using electric engines and electric powertrain to build a new type of aircraft. It was an aircraft that could both take off and land vertically, but then also transition and fly like an airplane. And so this was really a concept. And I went back to the University of Florida where I went to school and we went and set up a building on campus, which the main road that runs through University of Florida is called Archer Road. So everyone worked in the Archer lab and that's where the name obviously comes from. And we went and just started building to see what we could do to create new flying vehicles using this electric powertrain.

8:02What was very clear was the application worked really well. And the theory behind using multiple electric engines to create a new type of aircraft actually solved one of the core problems that you see in helicopters, which is safety. Because now you could build an aircraft that has multiple layers of redundancy and eliminate the single points of failures that helicopters have. And so that was super exciting. And it was also aligned very well with the regulatory environment, which was to create safer vehicles. And they had already obviously certified helicopters, as you can see them out today. And so the opportunity to actually build a new category that could be a replacement of that product, but also at a safer and higher safety standard was really unbelievable.

8:44And so there were companies out there that were doing this from a research and development perspective. And then my whole intent was to build a company that could take these products and actually commercialize them. And that's why I focused Archer from the beginning was once we could prove that the aircrafts could work, that you could build a product that actually did the things technically that theoretically you thought they could do. It was all about, could you certify and ultimately mass manufacture this type of product to bring it to the consumers? And that's what Archer was really all about from the very beginning.

9:15Isabelle Johannesen: And then can you convince the public to get in one of these things? So how have you done any civilian flights to date? Well, I think it's very clear that if there was a solution where people could just miss traffic, they could fly over it, they would do it. The reason, the real reason people don't take helicopters in mass is not really about the safety side. It's really about the cost side of things. So if you, if I guess civilians buy aviation on two core metrics, one is safety and the other one is cost. And so if you look at, you know, today in New York city, as an example, there's two really kind of big, you know, providers of helicopter transportation.

9:53One is a consumer application, which will cost you a couple hundred dollars to do it. The other one is much more of a high-end kind of corporate version of that. The high-end corporate version of that will cost you anywhere from five to$10 ,000 per leg. So it's very expensive to do it, but they have a perfect safety standard. And so in almost 30 years, they've had zero incidents in New York City. The consumer version of that has a much lower safety standard and has had multiple incidents. And so, but that you can book for hundreds of dollars. So the question became, could you build an aircraft that could really be even safer than the highest end helicopter application, but at the prices of the lower end helicopter offering?

10:33And that's really what we could do. And I'm 100 % convinced that if you could do that, there is virtually unlimited demand. If you even look at helicopters today, the safety standard is actually still quite high, especially compared to driving. And so the safety standard that's accepted in aviation is zero incidence. And so that is the rate that we are targeting. And that is the rate that I think is possible with these type of aircraft. So we'll show that through examples. There's plenty of people that are going to be interested in taking this.

11:01Isabelle Johannesen: Well, I'm glad you're tackling that because the current state of the situation with either paying a cheap price and potentially having safety hazards doesn't sound like it's a great solution to date. So I'm very excited to see where you end up with this. I hear rumors that you may be involved in the next Olympics in Los Angeles. Is that right? Yeah. So back in 2022, the FAA actually set out a goal where they called it Innovate 28. They wanted the Los Angeles Summer 2028 Olympics to be the first event where you could see, you know, this, these type of aircraft flying in, you know, in use. And so that was a goal that the FAA set out there.

11:38Now, of course, we had to establish the category. So again, not a helicopter, not an airplane. So the FAA had to create this category, which we worked with them to go do. We then had to go build the aircraft, test the aircraft, make sure it's safe, and then ultimately launch all the infrastructure that goes alongside that. So all this stuff is taking place simultaneously. last May, the Olympics decided to name an exclusive air taxi provider for the games, which they picked Archer. And so it was an incredible opportunity to be able to showcase what we can do. And so you'll have the ability to see these aircraft flying.

12:08It's on the global stage. And if you think about like what the Olympics is, it's a, it's a source of inspiration for the countries. And so they like to show off new technologies. And so back in 1984, LA, the last time LA hosted the Olympics, they had jetpack. And that was a huge phenomenon. everybody talked about for a long time. And I think we have an opportunity to do something similar on the upcoming 28 games where you can start to see these aircraft flying and people can understand that this is going to be a part of everybody's life on an everyday basis in the coming years. And it's almost like the best sort of advertisement for the industry that I think you could have.

12:44Yeah.

12:44Isabelle Johannesen: I mean, that's pretty cool. So inspired by New York, built in Florida and exhibiting in LA Olympics, that's something to be proud of for sure. Can people take flights at the Olympics or is this still going to be a test situation? Well, the goal is that we'll have be through the certification process, which is when the FAA kind of gives us that stamp to allow us to do that. And so if the FAA does that, we will certainly be excited to take people. And so what I always say is it's our job to build safe aircraft and it's the FAA's job to certify them. So we'll see how it shakes out. All right. Well, sign me up when you when you get to that point.

13:16Isabelle Johannesen: I would love to take it for a spin. I want to circle back to something you said earlier about the sort of the game of startup, right? The playing the game and building the team and launching the product, because I think that's a really great way of thinking about it, or I think it's a way that a lot of founders think about it, right? And you have a particularly interesting strategy that you played and a card that you played about taking Archer public. And I would love if you can talk us through sort of how you ended up doing that, what strategy you used and why. Well, if you look at hardware companies, they're extremely capital intensive.

13:48And so you have to find a way, a mechanism to be able to raise a lot of capital. And there's lots of different strategies to do this. If you had a typical, you know, software company that's generating and you're signing up users and you're showing that, you know, you know, CAC to LTV, you can acquire the users and they're, you know, it's a good ratio versus like the lifetime value of these customers. It's like, there's a, there's a game that you play on software. That's pretty different. Hardware has to do with how big is the market? How long will it take you to get there? Ultimately, can you capture a large part of the market?

14:18And is it going to create value? And so the challenge is when you look at a bunch of the sort of famous hardware companies that have made it, Tesla, SpaceX, Waymo, I'd even put like an Uber into a category like that. They typically cost many, many billions of dollars. So it's very hard to go out and build an airplane, 10, 50, even$100 million at a time, because you can't really plan that way. And so you can think about it, You know, it'll cost you billions of dollars to certify a new aircraft program. It's challenging to say$50 million. We're going to go stand up a team to go do this. And then along the way, show a couple milestones and then use those milestones to raise, you know, more dollars.

14:58So the dollars are, you just kind of need to add a zero or two zeros or three zeros to everything that we're talking about here in aviation. And so historically you would see only the, you know, the sort of rich and famous do this Larry Page and, you know, Elon Musk and Richard Branson would do this, but the world changed post Tesla and SpaceX being successful because it allowed the capital market to open up and start to finance this stuff. And so hardware became really like the new software. And so now everybody's rebranded this physical AI that's like been like the new branding towards this, but it's the same hardware game that is extremely capital intensive to go get this done.

15:32So I was, you know, I've been very plugged into the New York network for a long time, kind of where I started in my roots. And so I was watching what was happening as Tesla and SpaceX were really successful. And then I was also watching the capital markets as you start to see the public markets fund companies early and earlier in their journeys. And so there was a unique period of time where I saw we could actually take the company public very, very early. And so we were able to raise close to a billion dollars of capital when the company only really had less than 100 people a minute. And so we had a really great concept, amazing team, a really kind of, I would say, plan that was executable.

16:10And the public markets liked it. It gives us an ability to raise money. And it was a point in time that we could do that. But that time, I think, has actually come back. And so that was back in 2021. But I still do think that's possible to do now. You're seeing that with some autonomy companies. You're seeing that with some physical AI companies where there is an opportunity, I think, to actually access the public markets again to raise big dollars. And so Archer has raised almost$4 billion to date. It was a little under a billion dollars in that first raise. And so you still have an opportunity to keep accessing the markets even after your IPO.

16:43So it was a great strategy. People always ask me, are you happy you went public? Are you, you know, do you wish you could do it, you know, differently? It was the by far in a way, an amazing decision. I would do it over, you know, again, every single time. But you still have to find a way to ultimately show the investors in the public markets because you're graded on a quarterly basis every 90 days that you've made traction and that there's great progress and that you can ultimately get these, you know, this business to market.

17:12Isabelle Johannesen: Many questions on that. Very interesting. So, I mean, talking about that quarterly, you know, traction and progress, as you would report to your venture capital investor. But in this case, you're talking to the public. So, I mean, of course, you're building something very flashy and interesting to the public consumer. How do you go about informing your public investors about your progress? Well, again, more amazing things that happened that allowed, you know, know, this type of company to be public and be successful. That really, I think, just changed the game. It's different than maybe where it was 20 years ago.

17:45So take like Robinhood as an example, amazing company that gave access to people trading with lower amounts of money. So retail, you know, if you think about people under the age of 30, typically, you know, maybe 20, 30 years ago, you might have had a different demographic that was investing. But now younger people that tend to be earlier adopters of technology, they're bigger risk takers. I love this kind of stuff. They've seen what Tesla did and they were early adopters of Tesla. They're not bogged down by the politics. They're simply saying, wow, that's actually a great product. It's super safe.

18:19It's super fast. And the autonomy is amazing. Like what a great product. If you could just get rid of all the politics here, it's pretty hard to argue that Tesla is anything other than an amazing product. It's the same thing with many other companies that you're seeing. And so the retail tends to really like this. The second thing that happened was you have a very organized chat board. So things like Reddit and X, where people can go on and discuss these ideas with each other and sort of discover these companies. And so those two phenomenon really helped, I think, bring companies like Archer to the public markets and have a new type of investor base.

18:56That's not just all institutional investors. The retail played a huge part in this. And so I do think that trend will continue. And the beautiful thing here is the retail is actually pretty long-term oriented. And so they're not looking at this from a quarter to quarter basis like a hedge fund might, or even an annual basis like a hedge fund might. They're looking at it as something that actually they believe in and they're inspired by. So when you see the SpaceX IPO come up, I think that's going to be something that everyone wants to own in the retail community. It's going to be something that, just as an example, a bunch of people in the gym will be talking about.

19:30right? It's kind of like locker room talk or water cooler talk about SpaceX. And you get to be a part of that journey. That's really cool, giving people access to that. And those are people that are not necessarily looking at it, wondering what is SpaceX going to earn next quarter? They're thinking, wow, if SpaceX could put data centers into space and if X.ai can become a major platform, that this company has a chance to be one of the world's greatest companies ever built. And you look at that with a totally different duration than you would have a hedge fund that's judging this? Or is it expensive today versus where the comps are trading?

20:02They're looking at it much more aspirationally. And I think that companies like Archer fit into that buckets where we have just incredible loyal retail following that has really enabled a lot of our ability to raise capital.

20:16Isabelle Johannesen: Yeah. And I mean, of course, SpaceX is a household name and Archer, now that you are partnering for the Olympics and you have a partnership with United, is that right? Yeah, we have a lot of partnerships with different airlines. So United, Korea Airlines, Japan Airlines, Indigo, so lots of airlines all over the world. And so typically the biggest airlines, you know, by country, you know, have, you know, connect with us in some way. And we've started to develop the relationships where we're either selling planes or working together to build out the air taxi routes. Again, it's going to be a long journey to get there, but it's, you know, one that I think is, will really help the general flying public understand the safety standard of this aircraft.

20:52It's like, if you see one with a United flag on it, it's one that you might say, well, if United's willing to do that, it must actually have, it must be safe. And effectively what they're saying, a consumer might not understand this, but effectively what they're saying is the FAA has certified this. United would only fly certified planes. Therefore, it must be very safe. So that's kind of the beauty of partnering with the airlines. And they've been great partners to help get this all started.

21:15Isabelle Johannesen: Absolutely. And exactly where I was going with this, that those kind of partnerships signaled to the public who might be then investing in you that this is legit and interesting and promising we should invest our money in it. But when you went public initially, you didn't necessarily have those partnerships and was not publicly announced about the Olympics partnership. So how did you go about making the initial decision to go public in this way when you were pretty early on, right? Three years into even starting the company. It just all comes back to like, how do you raise a large amount of capital?

21:43And so if you're a first time founder, it can be really challenging. Nobody knows you. You haven't made anybody money. You haven't built a reputation. You don't have a network to go tap. And so you kind of scrounge around your friends and family and do whatever you can to get anybody to listen to you. Even though VC has more money today than it ever has in the past, it's still hard to get the attention because there's more startups and more people trying to get those dollars. And so you kind of do what you can do. Archer was my second time going through this. And I had earned enough of a reputation where a lot of people were willing to take a chance on me early.

22:17So I had raised some money before we went public, which, you know, very high quality investors. I think there were over seven billionaires that had invested in my Series A as an example. So people that were very well-networked that could help see this. When 2021 came around, you had this era of these new companies going public in a much more aggressive way. There were people that were willing to take chances on it. So that was a different period of time than what we had seen before that. Again, I think that time is back that we are back in those days, but you hadn't really seen that when we were going public.

22:48So having been close to the capital markets in my previous career, there were things that I knew to do that allowed us to move really quickly. So an example was the PCAOB audit. So you have to do a public company accounting audit if you're going to get through this. That's something that takes you many, many months to get through. So I did that as a small startup early so I could have that in my back pocket to know if there was a chance to go public. I'd already done that. Same thing with going through all the legal docs. So I'd done a lot of work on the law, on the legal side to get us ready to go do this.

23:16So as soon as the window opened, we could actually go do it. So there was only Archer and one of my competitors that did this at the same time and pretty much everybody else was flagged. And then what happened was the capital markets closed and then really, really fast. And then most of these companies got cut off so they couldn't raise the money. So only a couple of us got through and that really helped put us at a significant advantage and money became really the thing. Post going public, what I recognized was liquidity in the stock was actually one of the most valuable assets that we had. And so the community that formed online, especially on Reddit, became a really big source of value for the company because raising capital for startups or for hardware companies is extremely important.

23:59The liquidity, meaning lots of people trading the stock, became super important because it allowed us to raise capital because funds will only invest if there's an ability to get out. And so if there's no ability to get out, it's one way in, then you're going to have a really hard time raising capital. So that was a really big part about it, about part about our strategy. And then you saw pretty much all my competitors copy us, do that. And so we've been super savvy on the capital market side, even in ways that were not necessarily obvious, but ultimately have paid off massively.

24:28Isabelle Johannesen: I would love to share some of this knowledge that you have, too, with other founders out there. So you said, you know, of course, when you took advantage of this opportunity, it was a particular time in the market and special, you know, specific market conditions, but they're coming back today. What indicates to you that this might be a trend that can come back now? I'll give you an example. I saw a company that's not competitive to us at all. In fact, I think it's, you know, it's a very interesting company that just went public. It's an autonomy company in aviation, and they went public at roughly a billion dollar valuation.

24:55That's a pretty relatively early stage company, you know, as well. So you're seeing these things happen today as evidence of this type of thing coming back. Some of my competitors have gone public as well that were private, one of them specifically. So it's more of a, it's a company called Beta Technologies, not really a competitor. I would almost call them more a partner in a lot of the things that we do. We buy ground support equipment, think charging infrastructure from them. So great company. They were private and then ultimately went public within the last, I forgot what it was, six months or so.

25:26And so there are companies like that that you're seeing go public again when historically, even a year ago or two years ago, three years ago, that would have been really difficult back into the 2021 times. You're seeing that happen. I do think the AI kind of just explosion that's like taken place has brought a lot of new investors looking at interesting things as well. So it's also a unique period of time because there's a kind of like a, almost like a new asset class to invest in AI companies, robotics companies, physical AI companies. So we kind of start to fit into these categories that are new and exciting.

25:59And again, I think it's locker room talk. People want to own this stuff because they want to be able to talk about it. And it's exciting and new. And it's not the same old SaaS company or whatever, you know, boring thing that they used to own. It's something that they can get excited about, passionate about. They can, you know, buy the wear the t-shirt kind of thing and talk about it with their friends.

26:16Isabelle Johannesen: Wear the t-shirt. I love that. But so if there's, you know, a founder listening to this podcast and they are looking at alternative sources of capital, the VC ecosystem right now is really tight and funding a very specific type of founder. So what would you say is sort of the criteria for a founder to even consider if this is an option for them? One is very clear. You have to have an incredibly big team of what you're doing. You cannot do something that's small or niche or limited. I think that's going to be very big. Two is I think you have to have an amazing team and team that has credibility, not just that you think is good, but that other people can verify is really good.

26:51Three is you have to have some traction. You have to have something that is interesting and unique about the company that's out there. And the more traction you have, obviously the better. And I think if you can do that, it's a pretty big deal. And then I would say four is if you have either a strategic partner or some kind of like external third-party validator, I think that's really critical. Having the general public see what you're doing is actually important. And so maybe if you're a space company, you have a big space contract. Maybe it's with SpaceX, maybe it's with NASA. If you're a different type of hardware company, Maybe you have like what we did.

27:24We had a big partnership with an automotive company. So there's partnerships and third-party validators that I think will be critical in order to actually make this happen. And then I would say the last thing is you got to have guts, real guts to go do this because there's good odds you fail. And so you have to be willing to go, try to go public, spend a lot of money, risk a lot of your hard-earned capital you already raised in order to go do this. And knowing that there's a pretty decent chance you'll fail.

27:50Isabelle Johannesen: Oof. Yeah. Okay. When you put it like that. But you went public specifically through something called an SPAC merger, special purpose acquisition company. Can you tell us a little bit more about that specific method that you chose? One of the typical ways of going public is through an IPO, a direct IPO. Typically, the banks will take you public. A SPAC was a unique instrument that was created to, they call it like a, you basically merge with this entity and then you ultimately, the sort of resulting entity becomes the company. It's just effectively a mechanism to go public. And so some of the banks liked it because they don't have necessarily big sales and trading arms.

28:27So it's harder for them to do IPOs. So some of the banks would get involved that didn't necessarily have the big sales and trading arms. So like a Bank of America or a Goldman Sachs or JP Morgan has a big sales and trading arm versus like some of the smaller banks don't have that. So they would play in the SPACs because it gave them an ability to take companies public. So you had this mechanism to do that. But whatever the mechanism is, it's the same thing. It's kind of the same game that you're playing. And so you'll need something that is, you know, I think unique to the market that actually gets people excited to take the company public.

28:57But it's definitely not for everyone or for every company. It's, I think, pretty unique. You have to know that either the capital you raise is going to sustain you for a significant period of time, or you have to know that you can raise more capital because otherwise the market will trade your stock down very aggressively. And that's very hard to raise capital again. And you can kind of kill the company really fast if you do this poorly. And so you have to be really careful that you actually are in a good spot to do that, or else it could be pretty much instant death.

29:28Isabelle Johannesen: Another intense way of saying it, but I think it gives perspective to the challenge you were facing. But given your background in investment banking and then being a former founder, I think you clearly had some insight that not a lot of first-time founders might have. Is this something that you would advise to a first-time founder or really leave it for people who are more experienced? I don't think there's anything special about me or any of the other people that did it. I think it's a risk tolerance if you're willing to do that. And I think it's having the right setup. And I think it's being lucky from the timing.

30:01Let's say you want to do it today. You can't just say, I want to go public today and then next month go public. You have to start the audit process. It'll take you a year to prepare for this. So you have to be lucky also that you spend all this money and then next year, the markets are willing to still do this. And so, and by the way, that you've had great traction because if between now and next year, traction isn't great, you're also not going to be able to do it. So, so many things have to come together, but you have to be willing to just, you have to have that type of appetite for risk in order to do this.

30:28And I think that's only so many people and that doesn't, it's just not right for everybody. And so some people will find it interesting. Some people won't, but if you're building a hardware company and you need to raise billions of dollars of capital, that is a very hard thing to do just in general. It's very competitive out there. And so I would certainly consider it.

30:44Isabelle Johannesen: What were your alternatives if this hadn't worked out with all that risk? I actually had an interesting setup where one of the guys that invested in me early was a guy named Mark Laurie. And so Mark was a multi-billionaire, a very successful entrepreneur who had said, I'm going to backstop this company. I believe in it so much. I think it's so interesting that this is going to work and I'm going to, I'm going to, I'm going to help you. And not only will I invest, but you know, I'm going to backstop it. Meaning like I will help build confidence that we will be able to have the money and whether, you know, he puts it in or somebody else puts it in.

31:19So that was actually really encouraging to a lot of the early engineers because engineers need to know that this company is going to have money before it has money. You're like, wait a minute, chicken and the egg, how does that work? And so that was a unique thing that he did for us, where it helped us attract the best talent out there before we had the money. And then, of course, once we had the talent, we could go out and raise the money. And so that's why it was a unique kind of mechanism. Would he have ultimately backstopped the company? Who knows? We never had to find out. And so but it was a, you know, an ability for us to actually go out there and recruit some of the best talent.

31:49So, again, finding just different ways to sort of bolster, you know, add more arrows in your quiver, I think is just absolutely critical here. And that was one of the ways that we did it was through, you know, a good friend and ultimately, you know, a big believer in the business. And, you know, that turned out to be great for us, great for him, great for the engineers that joined and it helped the industry really go. You know, Archer was viewed as I'll call it late to the industry of Evital. Like we had started my my competitor started 10 years before us. And so, you know, even though we've caught up and in many cases actually surpassed them, you know, we're in actually a really interesting spot because it was tough to raise capital knowing there were other companies out there that have been doing this for a long period of time, knowing how capital intensive is, truly.

32:34Isabelle Johannesen: And you think that the going public was a big part of your moving into a front runner position in the industry? Well, raising the capital was what helped us do it. The capital allowed you to get the people. the capital also allowed us to sign like the biggest contracts, the biggest deals, credibility. So think like defense. So when I walk into the Pentagon and we're like, Hey, here's what we're doing. If you have like$25 million of capital, they they're just like, we're not going to give you a big program. How do we know we're going to, you're going to do it. We walk in there with, you know, almost$2 billion of cash on the balance.

33:04It's just a different conversation, right? Okay. We can talk to you about a program that's worth tens of billions of dollars. You can, you have the ability to actually perform on that. So the capital is really a weapon to do this stuff, you need it if you want to play in the big leagues, because it just drives a lot of credibility in those conversations.

33:21Isabelle Johannesen: So, you know, most startups goal is to exit, get acquired or go public at some point. What is your next sort of milestone? And then what is the ultimate end goal for Archer? I think that might be a target for some, you know, first time founders. I think second time founders, especially if you had a good exit on your first time, sort of realize that, you know, once you sell the company, then what? Like, what are you going to do now? And so it's always like, like money provides optionality in life and like security. It allows you to want to, it allows you to kind of do what you want, but it doesn't mean you're not going to be super bored and uninspired and, and not excited to wake up every day.

34:01It's, it's, you actually have to live through the same things everybody else does. And so having the ability to go build an incredible company with incredible people that can solve a real world problem, I think is probably the most interesting thing that I could think of to go do. And so for me, like that's what it's really all about. I feel like we've already made it not because of money, because we have a platform to go work on. It's a gift to go do that. That gift is only possible because of just the lucky period of time that I live in, meaning lithium ion batteries got good enough to actually power airplanes.

34:33That's crazy lucky. We're in this interesting geopolitical climate that could enable the U.S. to create a new category of aircraft for the first time in 60 years. That's unbelievable. And then the capital markets are willing to fund all this stuff. That is unbelievable. So I feel like we won just by being in this period of time to let us go work on a project like this. The money, I don't think, will make you any happier personally. So if I sold the company, then what else would I do?

34:59Isabelle Johannesen: That's a good question. I don't have an answer for you, But I do have one last question for you before we wrap up. So given all of those interesting factors in the market and in the environment with the AI boom and everything going on in the world these days, what would your piece of advice to early stage founders be, especially those building in capital intensive industries? It's a really tricky one. I would say it takes extreme focus to do this. You cannot have any other hobbies. This is the only thing. This is your life. So pick an industry that you're really passionate about. I'd say one of the biggest pieces of advice I give people is I ask them and really dig in, is that a company they actually really want to be involved in for the rest of their life?

35:39And so I learned that from going through the staffing industry. And it was quite interesting. We built an awesome culture, but I didn't want to be in staffing forever. It's a great industry and a great stuff. It's just, I wanted to build hardware and I just didn't have an ability to do that. And so what you are committing to and signing up to as a founder of a, especially a hardware company is extreme dedication. So pick something that is going to be incredibly interesting to you for probably a decade or maybe two decades, because that is the commitment that it takes to go do this. And you can't have any hobbies.

36:12There's no golf. That's not going to be on the table. and just understand what you've signed up for because it is quite the journey. It is, I would say, on one hand, the most painful thing you'll probably ever do, but also probably the most fulfilling thing you'll ever do.

36:27Isabelle Johannesen: Well, I hope you get to play some golf in between, but that is a great message to leave our audience with. Adam, thank you so much for joining us and for sharing Archer's story. I look forward to maybe taking a ride in one of these things one day. Let me know when it's an option. All right, sounds good. Thank you for having me. Build Mode is a TechCrunch podcast. Each episode is produced and edited by Maggie Nye and hosted by me, Isabel Johanesson. Our art and design is also by Maggie Nye. A big thanks to Morgan Little, who leads our audience development, the Foundry and Cheddar video teams, and most of all to you, the builders, and everyone else in the wider startup community.

37:05Isabelle Johannesen: We'll see you back here next time.