Shield AI is a defense tech company making AI-powered autonomous drones and aircraft. Here’s how to invest:
- Only accredited investors can buy pre-IPO shares
- Options: Pre-IPO platforms, VC funds, or buying from current shareholders
- Minimum investment often $100k+
- Shares are illiquid – expect to hold 5-10+ years
- High risk but potential for big returns if successful
Key facts about Shield AI:
- Founded in 2015
- Raised over $1 billion in funding
- Valued at $2.3 billion as of Dec 2022
- Main product is Hivemind AI for autonomous flight
- Competes with Anduril, Skydio, AeroVironment
| Investment Method | Pros | Cons |
|---|---|---|
| Pre-IPO platforms | Early access | High minimums, illiquid |
| VC funds | Professional management | High fees, less control |
| Secondary shares | Potentially available | Complex, risky |
| Wait for IPO | More liquidity | Miss early growth |
Consider risks carefully before investing in this high-potential but speculative private company.
Company History and Goals
Shield AI started in 2015. Three people began it:
- Brandon Tseng (ex-Navy SEAL)
- Ryan Tseng (Brandon’s brother)
- Andrew Reiter
They want to keep soldiers and regular people safe with smart machines. Brandon saw problems in Afghanistan when bad information led to people getting hurt. This made him want to start Shield AI. They began with $100,000 from family and friends to make smart drones for the military.
Main Products
Shield AI’s big product is Hivemind. It’s a computer brain that lets drones and planes fly by themselves without GPS or talking to anyone. They have two main flying machines:
| Product | Type | Use |
|---|---|---|
| V-BAT | Big drone | Flies far to watch things |
| Nova 2 | Small drone | Goes inside buildings and underground |
These help the military do better and keep people safe in tough places.
Recent Funding and Value
Shield AI has grown a lot. Here’s how much money they’ve gotten:
| When | What Round | How Much | Total So Far |
|---|---|---|---|
| Dec 29, 2023 | Series F | $500M | $1.07B |
| Dec 14, 2022 | Series E | $150M | $570M |
| Aug 24, 2021 | Series D | $223.33M | $420M |
| Feb 23, 2021 | Series C | $70.99M | $196.67M |
We don’t know exactly how much the company is worth now. But the big money they’ve gotten shows people think it will do well. Big investors like the US Innovative Technology Fund, Point72 Ventures, and Andreessen Horowitz have put money in. This shows Shield AI is important in making new military tech.
Ways to Invest in Shield AI
Pre-IPO Investment Platforms
Pre-IPO platforms let some investors buy Shield AI shares before it goes public. These platforms sell shares from early workers or investors who want to cash out.
Who Can Invest
Only accredited investors can use pre-IPO platforms. To be accredited, you need:
- Net worth over $1 million (not counting your home), or
- Yearly income over $200,000 ($300,000 for couples) for the last two years
Good and Bad Points of Pre-IPO Investing
| Good | Bad |
|---|---|
| Get in early on growing companies | Higher risk due to less info |
| Chance for big returns | Can’t sell until company goes public |
| Add different investments to your mix | Often need a lot of money to start |
| Buy before public trading begins | Rules limit when you can sell shares |
Pre-IPO investing can pay off big, but it’s risky. You might get in on a fast-growing company like Shield AI, but you’ll face challenges like not being able to sell quickly and needing more money upfront.
Venture Capital Funds
Venture capital (VC) funds are another way to invest in Shield AI indirectly. These funds pool money from many investors to buy into new companies.
How Much You Need to Invest
VC funds often ask for big investments:
- Usually $100,000 to several million dollars
- Mostly for rich people and big companies
Pros and Cons of VC Fund Investing
| Pros | Cons |
|---|---|
| Experts manage your money | Need a lot of money to start |
| Invest in many startups at once | Can’t choose which companies to buy |
| Get into multiple promising companies | Money locked up for 7-10 years |
| Chance for high returns | High fees for management and performance |
VC funds offer expert management and spread out risk, but you have less say and pay more fees than direct investing.
Buying Shares from Others
If you can’t use pre-IPO platforms or VC funds, you might buy shares from current owners.
Where to Buy Private Shares
Websites like EquityZen and Forge Global help connect sellers and buyers of private shares. They often show company values and recent sale prices.
Things to Watch Out For
When buying private shares:
- Make sure the seller and shares are real
- Check if there are rules about selling the shares
- Know that company rules might limit future sales
- Remember you might not be able to sell for a long time
How to Invest in Shield AI
Check if You’re Allowed to Invest
To invest in Shield AI, you must be an accredited investor. This means:
- Net worth over $1 million (not counting your home), or
- Yearly income over $200,000 ($300,000 for couples) for the last two years
These rules are in place to protect less experienced investors from risky investments.
Pick an Investment Platform
Choose a good pre-IPO platform that offers Shield AI shares. Some options include:
| Platform | Features |
|---|---|
| EquityZen | Mentioned in earlier info |
| Forge Global | Connects buyers and sellers |
Look at different platforms to find one that fits your needs and has good terms for Shield AI stock.
Set Up Your Account
After picking a platform:
- Create an account
- Prove you’re an accredited investor
- Give needed financial info
- Send in documents to show you qualify
Buy Shield AI Shares
Once your account is ready:
- Look for available Shield AI shares
- Check the current value and price
- Read all documents carefully
- Decide if you want to buy
Remember, these shares often come from early Shield AI employees who want to sell some of their stock.
Understand When You Can Sell
Selling Shield AI shares isn’t like selling public stocks. Here’s what to know:
| Factor | Impact on Selling |
|---|---|
| Share class | May limit when you can sell |
| Holding periods | Rules may require you to keep shares for a set time |
| Company policies | Shield AI may have rules about selling shares |
| Option agreements | May restrict when and how you can sell |
Be ready to hold your investment for a long time, maybe until Shield AI goes public or gets bought. This lack of easy selling is a big risk when investing in private companies like Shield AI.
Is Shield AI a Good Investment?
Shield AI’s Place in the Market
Shield AI makes AI systems for defense. They focus on:
- Software for flying machines
- AI that works without GPS
- Drones and planes that fly themselves
The company is growing fast in the defense industry. Other big names in this field are:
- Anduril
- Skydio
- AeroVironment
- General Atomics
The US government spends a lot on this kind of tech:
| Year | Spending on AI | Spending on Self-Flying Tech |
|---|---|---|
| 2021 | $800 million | $1.7 billion |
This shows there’s a big market for what Shield AI makes.
Future Outlook
Shield AI could do well in the future because:
- The military wants more self-flying machines
- The US spends a lot of money on AI for defense
- They might sell to non-military customers too
The company wants to be a top defense tech maker. They plan to:
- Work with other defense companies
- Buy smaller companies that fit with their goals
- Maybe use their tech for flying taxis
How It Stacks Up Against Others
Here’s how Shield AI compares to other companies:
| Company | Worth | Money Raised | What They Make |
|---|---|---|---|
| Shield AI | $2.3 billion | $573 million | Hivemind software, self-flying drones |
| Anduril | $8.5 billion | $2.2 billion | Lattice OS, Ghost drones, other defense tech |
| Skydio | $2.2 billion | $570 million | Self-flying drones |
| AeroVironment | $2.2 billion | Public company | Military drones, small missiles |
Shield AI is doing well for a newer company. They started in 2015 but have raised a lot of money.
What makes Shield AI different:
- They focus on making brains for flying machines
- They work closely with big defense companies
Shield AI has tough competition. To do well, they need to:
- Keep making better tech
- Win more government contracts
- Sell more than their rivals
Investing in Shield AI could be good, but it’s not a sure thing. They’re in a growing field, but they face strong competition.
Risks to Consider
Hard to Sell Private Shares
Buying Shield AI shares before they go public can be tricky:
- You might have to keep the shares for 5-10 years
- Selling quickly if you need money is hard or impossible
- You might not find someone to buy your shares when you want to sell
Only invest if you’re okay with not being able to sell for a long time.
Unsure Company Worth
It’s hard to know how much Shield AI is really worth:
- Not much money info is public
- Ways to figure out the value are different from public companies
- Quick changes in defense tech can change the company’s value fast
This makes it hard to know if you’re paying a fair price or if it’s a good investment for you.
Rules and Laws to Watch
Investing in companies before they go public has lots of rules:
- Only certain rich people (called accredited investors) can buy
- You might not be able to sell for a while after the company goes public
- You need to follow many laws about buying and selling
Make sure you know and follow all the rules before you invest.
Your Shares Might Be Worth Less Later
Your Shield AI investment could lose value because:
- The defense and AI markets go up and down
- The government might spend less on defense
- Other companies might make better products
- The company might not grow as fast as people thought
| What Could Happen | How It Affects You |
|---|---|
| Markets change fast | Shares worth less |
| Government spends less | Fewer jobs for Shield AI |
| Other companies do better | Shield AI sells less |
| Company grows slowly | People lose faith in Shield AI |
Other Ways to Invest
Buy Stocks in Similar Public Companies
If you can’t buy Shield AI shares, you can invest in public companies that do similar work:
- Big defense companies: Lockheed Martin, Northrop Grumman, Raytheon Technologies
- AI companies: NVIDIA, Microsoft, Google (Alphabet)
- Smaller companies that make self-flying machines or military tech
Buying these stocks is easier than private shares:
| Public Stocks | Private Shares |
|---|---|
| Easy to buy and sell | Hard to sell |
| Clear company info | Less company info |
| May grow more slowly | Might grow faster |
Defense or AI ETFs
ETFs let you buy many company stocks at once:
- Defense ETFs: iShares U.S. Aerospace & Defense ETF (ITA), SPDR S&P Aerospace & Defense ETF (XAR)
- AI ETFs: Global X Robotics & Artificial Intelligence ETF (BOTZ), ARK Autonomous Technology & Robotics ETF (ARKQ)
When picking an ETF, look at:
| What to Check | Good Numbers |
|---|---|
| Yearly fee | 0.65% or less |
| Total money in fund | Over $250 million |
| Number of different stocks | At least 70 |
Wait for Shield AI to Go Public
You can wait until Shield AI sells stocks to everyone:
- Watch the news for when Shield AI might go public
- Be ready to buy quickly when they do
- Think about buying right away or waiting a bit
Buying after they go public is different:
| Pros | Cons |
|---|---|
| More company info | Early investors already made money |
| Buy through normal stock accounts | Stock price might be high |
| Can buy smaller amounts | Might not grow as fast anymore |
Wrap-Up
Key Points
- Shield AI makes AI and self-flying systems for the military
- The company is worth $2.3 billion (as of December 2022)
- Ways to invest:
- Pre-IPO platforms
- Venture capital funds
- Waiting for public stock offering
- Shield AI competes with big defense companies and other AI startups
Research Before Investing
| What to Check | Why It’s Important |
|---|---|
| Shield AI’s products | Know what the company sells |
| Military contracts | See if the company has steady work |
| Market position | Understand how Shield AI compares to others |
| Private company risks | Be aware of challenges like hard-to-sell shares |
| Defense and AI rules | Changes can affect Shield AI’s growth |
| Other investment options | Compare with public defense and tech stocks |
Before putting money into Shield AI:
- Learn about their products and customers
- Think about the risks of investing in private companies
- Keep up with defense and AI industry news
- Look at other ways to invest in similar public companies
