A Gentlemen’s Agreement

Mar 8, 2024
A Gentlemen’s Agreement

Happy Friday!

In the last couple of weeks, I’ve received quite a few questions about whether or not I am still affiliated with Brownstone Research.

We have so many new subscribers join every week, I’m not surprised that there is some catching up to do.

To be clear, I am not in any way affiliated with Brownstone Research, or Legacy Research for that matter. I was told to discontinue my research, writing, and publishing on June 9, 2023, and from that point on I no longer had any visibility or control of what was happening at Brownstone Research. It was not my choice, but I accepted the decision and moved on.

My last official day was on August 26, 2023, and after a brief break, I got to building Brownridge Research in October. For those that would like some additional information, please go here to see my letter on this matter.

While I can’t speak to anything related to Brownstone, I have revisited past portfolio holdings in  Outer Limits. My commentary on early stage biotech company Cabaletta Bio and the Republic NOTE below is a perfect example. I hope that has been useful.

And for easy catching up and reader convenience, I’ve also collected my responses to related questions on this matter in the FAQ, which you can find right here.

I’ve been extremely busy working on what comes next. I’m excited and hope to share some major updates with you in the next few weeks.

Have a great weekend.


Alef? More Like As If

Come on, Jeff? Alef seems like a pump-and-dump or a Rivian scam. I checked out their website and a dozen other propaganda videos of Alef, and they don't even have a working prototype or miniature models. Yes drones, but not a full size car — nothing. — Brian C.

Hi Brian,

I figured I’d get at least a few disbelievers when I wrote about Alef. Sometimes “far out” ideas seem too far out to be real. I understand the skepticism.

But let’s use this as a broader example of the phases that early stage tech companies go through as they evolve from an idea, to a small prototype, to fully sized prototype, and eventually to a first commercial version.

You’re correct, Alef doesn’t yet have a commercialized flying car. They do have a real prototype — an actual picture of which I shared in my issue of Outer Limits — Will Tesla Built a Flying Car?

But let’s take a step back before we jump ahead.

Alef developed its first prototype back in 2016. It wasn’t a full-sized car, but it was capable of demonstrating Alef’s electric powered propulsion system. This is what led to venture capitalist Tim Draper to invest in the company. It’s worth noting that Tim is one of the most successful venture capitalists in history.

By 2018, Alef flew its first, full-sized skeleton prototype of the Model A. This led to the investment made by SpaceX. And by 2019, Alef was able to demonstrate a full-sized prototype capable of driving, vertical takeoff, and some limited forward motion. It wasn’t full forward flight, and there weren’t any passengers, but that wasn’t the goal.

The goal for early stage developmental companies like Alef is to incrementally test, iterate, improve, and consistently get one step closer to the commercialization of its product or service. 

And along the way, early stage companies have to raise capital in a series of venture capital rounds in order to fund the development.

Not having a full-sized, fully functional product doesn’t mean that it’s a fake company.

In the case of Alef, it was able to attract capital from Tim Draper and SpaceX. It’s still early, but that’s a good sign.

Last summer, Alef received a special airworthiness certificate from the Federal Aviation Administration (FAA) that allows for exhibition of Alef’s flying car… and further research and development.

I suspect that Alef’s presence at this year’s Mobile World Congress in Barcelona was to generate excitement around its technology and the potential for its Model A. Now that it has taken enough pre-orders to represent around $1 billion in potential future sales, I’m pretty sure that it is actively engaged with venture capital firms about its next round of funding.

Alef will need a lot of capital to continue its development towards flight certifications in various countries… and ultimately its production of its first commercial flying car.

It’s too early to say whether or not Alef will be successful. A lot will depend on its ability to raise the capital it needs to complete its research and development. 

With that said, the technology exists today for the Model A to become a reality. This is just an engineering problem to bring an idea to reality.

This is a very similar journey for most early stage private technology and biotechnology companies. They always start with an idea and build from there. With each successive milestone, they look to raise additional capital, and continue their journey to commercialization.

So how about this, Brian: Let’s have a gentlemen’s agreement to wait and see what kind of progress Alef makes in the next two years. Let’s see how successful they are raising additional capital, who invests in Alef, what milestones it hits, and what air certifications it receives as it moves towards commercialization.

We’ll track Alef’s progress and see how this story develops over the next two year. It’ll be fun and interesting, and who knows… you just might be surprised.

There is a lot of exciting activity happening in the eVOTL (electric vertical take off and landing) industry right now, and there is a lot of venture capital investment happening in this space.

All the more reason for us investors to stay on top of this trend.

New reader? Welcome to the Outer Limits with Jeff Brown. We encourage you to visit our FAQ, which you can access right here. You may also catch up on past issues right here in the Outer Limits archive.

If you have any questions, comments, or feedback, we always welcome them. We read every email and address the most common threads in the Friday AMA. Please write to us 

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