The only reason this idea is even being entertained right now is because oil prices are so low. As soon as the oil producers are finished crushing this round of alternative energy companies oil prices will go back up and Boom won't sound so good.
Other airplanes have crashed too. I think it was deemed a fairly safe aircraft, they had some trouble with tyres, but that shouldn't be impossible to resolve.
It was retired from service largely because the accident was attributed to a critical design flaw.
Sure, that was the only ever Concorde crash, but then they really didn't fly very much compared with conventional aircraft. There are individual commercial aircraft that logged around as many flight cycles as the entire Concorde programme without incident.
I know they have recurring problems with tyres (and I'm sure they had other design flaws too).
But afaik the main culprit in the crash was a piece of titanium that fell off from another airplane and was left on the runway. This metal-piece cut into the tyre and caused an explosion.
I can't imagine a serious investor that doesn't consider oil price volatility when deciding whether or not to invest in an airplane company. You seem to be assuming that all of the investors are abjectly incompetent.
I think you're right that it would be considered, but from inside the VC world, I can also say it would be very very strange (to the point of almost unthinkable) for a fund to make a meaningful hedge against a particular portfolio company's commodities exposure. It's just not done, at least if you're running other people's money.
You can think of lots of reasons why, but it mainly boils down to this: VCs are hired to make bets within an asset class (startups) and not outside that asset class. Institutional investors (upstream of VCs) have other managers to do commodities etc.
Also, at least in theory, the market price of oil takes all info into account. If the VCs could really predict the price of oil in 3-5 years, they should probably be trading that alpha instead of investing in VC.
I'm not talking about hedging (like buying call options). I'm saying that oil price would be expected to be a potentially large part of the risk profile of the business, so it doesn't cut muster to just assume that the price of oil won't go up and cut a check. A competent investor will analyze the impact of common risks for the type of business in question, and make a determination as to whether the investment makes sense in light of the risks.
That doesn't mean that the investment isn't expected to be hurt (or wiped out completely) should the price of oil rise, it just means that a competent investor would have looked at that possibility and decided that the investment was still worthwhile.
The comment I was responding to IMO assumed flippancy on the part of investors and implied that they would be surprised by an increase in oil. That's absurd.
Some investors don't believe that an oil price rebound is inevitable in the medium term. Boom is a great opportunity for such an investor, because it has different characteristics than does selling options.
The only reason this idea is even being entertained right now is because oil prices are so low. As soon as the oil producers are finished crushing this round of alternative energy companies oil prices will go back up and Boom won't sound so good.