Tom Olson and Paul Contoursi of The
Colony Fund gave an extremely interesting joint
presentation on funding for space projects.
Among their key points were the unnecessary delay
in starting up space companies (a failure of public policy) and
the perception issue, that only government can do it, with "astronomical"
price tags. But is that really true? Submersibles have essentially
the same needs as spacecraft - life support, communications, lights,
power, manipulator arms, etc, in a hostile environment - but the prices
are in the $million range, not $billions. Isn't the environment below the
surface of the ocean MORE hostile than space?
There followed a comparison of developments in space and aviation;
in aviation there was a flurry of activity, much private funding,
public access, thousands of experiments. There was also a sharing
of data - including by NASA's predecessor. The outcome was what they
called the "Lindburgh effect" - only 9 years after Lindburgh, we had
regular trans-oceanic passenger service. In space, by contrast,
everything was cold war driven - all or nothing, "one best way".
Has there been a "Tito effect"? Not really. Communications satellites
are still the only working business model. No reduced costs, or investment.
When do we get scheduled commercial space transport?
They have looked at a number of commercial space venture business
plans, mostly very deficient in defining what they want to do
and being realistic about estimates. They believe that
what's needed is a commercial space investment group to vet plans.
There is an enormous but "silent" interest in space,
exemplified by the worldwide interest in NASA's
Mars Pathfinder
mission. The standard
space advocate interpretation is to treat these people as "spectators",
or a political constituency. But Tom and Paul believe they could serve as
a FINANCIAL constituency - the investor's capital becomes a participant
in space ventures. 150,000 investors can do more than 7-10 million voters!
Hence, "The Colony Fund", a retail space development fund. They
are targeting raising $500 million, shares at $100/share on the
retail investment market; a closed-end fund with 30-year maturity
to mitigate risk. This can be operated at much lower cost than just
a few years ago, using the latest technologies. The goals are
to build long term value for shareholders, and build the commercial
space infrastructure of the 21st century. 5% of the fund would be
in the "adventure" portfolio: high-profile private space ventures;
60-70% in "Venture" portfolio, well-run space opportunities. The
remaining 25-35% in a traditional debt/equity portfolio.
Traditionally venture capitalists work on a "2-6-2" rule: for
every 10 companies, 2 will fail, 6 break even, 2 will succeed with
large rate of return. Will this work for space? Market areas
are engineering and research, space insurance, tourism ventures,
and many others. They're looking for companies with a strong team,
competitive advantage, etc. Suborbital tourism does seem to fill
a good business niche right now and they see several good teams there.
They believe they can market the fund to a wide range of investors -
young, old, middle-aged. There is space interest across all
groups and boundaries; they will target the small-medium investor
with long time horizon.
Tom and Paul summed up their team and plans, and some hope for the
future if they succeed - the fund could play a major
role as an organized voice representing space investors on
space policy issues. They've been working on this project
for over 3 years now; it looks like the main task now
is drumming up enough letters of support that they can persuade
an investment bank to help them overcome the
remaining startup obstacles. If you might be interested, send an
email to info@colonyfund.com.
The Space Elevator
Perhaps the most interesting, certainly the most well-received
of the talks at ISDC this year was the report by Michael Laine,
founder of Liftport,
"the space elevator company". Laine and
Dr. Bradley Edwards
had previously founded and run
"Highlift Systems",
which received funding for NASA Institute for Advanced Concepts studies
on space elevator design, and came up with a publicly available
detailed report. Edwards has gone
on to become Director of Research at the
"Institute for Scientific
Research (ISR)"; Laine claims that they are still working together,
but Liftport was formed to commercialize the technology over the
next 15 years.
Their design is for an elevator ribbon of 100,000 km length, going
well beyond geo-synchronous earth orbit (GEO). The initial ribbon
is lifted by rocket to GEO and dropped (and extended out) from
there to a platform in the Pacific ocean. The initial ribbon is gradually
expanded over two years to make a usable ribbon 3 feet wide. At sea level
are an anchor platform for stability, and a power beaming platform
with a 12-meter mirror and laser with adaptive optics. Their target
price point is $500/pound to GEO; essentially the same price beyond
to launch to the Moon or Mars - the end of the ribbon allows escape
from Earth orbit.
Applications including communications satellites, solar power
satellites, tourism, deep space mission launches, generally massive
cargo to anywhere in space. For science missions, their prices
will allow universities and even small companies to have their
own space program; Liftport's role is like that of a railroad,
providing transportation - satellite deployment to any orbit.
They do face a number of challenges: meteors, induced electric
currents and lightning, orbital objects, radiation, oscillations
of various sorts, and decay from atomic oxygen. So far they've
spent over $500,000 on research and believe they have resolved most of
these problems technically; the next phase will involve more expensive
tests to actually verify these solutions.
Currently the total cost estimate for construction is $6.9 billion -
he tells people it's $7-10 billion. Aside from the ribbon material
itself (carbon nanotubes are getting close), one big requirement will be
improved tracking of space objects under 10 cm (the current limit
of tracking capability). The plan is to make this a 15-year project,
and include a business development side that establishes profitable
companies in related industries - they want to provide shareholder
return in near, medium, and long terms. Examples of early revenue
streams might be a video game, commercialization of enabling technologies
("Liftport Carbon"), etc. They also plan an investment "club" that
would allow people to invest in the company and at the same time
in related industries - robotics, solar power, aerospace.
Michael then heard questions from the audience. The first was the
typical question about what happens when it breaks - the answer depends
on where the break occurs. If the break is below GEO, moving the
counterweight in should allow dropping the thread down again
and re-attaching. If the break is above GEO, the whole project
may be lost - however they plan to have a redundant set of counterweights
to avoid that happening.
On legal issues, there are a variety of rules and international treaties
that they need to work with or around; one interesting question is
whether the FAA would govern their "launches" - launch via an elevator
doesn't seem to be currently covered by their charter! On competition -
he didn't feel there was any right now; Dr. Edwards is working
with them, and focusing on technical questions, not forming a business.
He also mentioned the goal of the investment club was not so much
to raise capital as to provide a way for people to get involved -
similar to the reasoning of Paul Contoursi and Tom Olson of the
Colony Fund. Also, any additional pieces beyond the elevator itself
could, probably should be the province of another company - for example
a manned platform at GEO, which is not in their business model.
One thing Michael emphasized at the end - the space elevator has
huge economies of scale, since it can be used in bootstrap fashion to
expand. It's the only launch system that has that going for it.
Well, there was a lot more to the ISDC meeting - there are a lot
of wonderful ideas out there. Now if we only had a few billion dollars
here or there to hand out for these projects, we'd be way ahead :-)
As Tom and Paul said in their talk - you have to expect a good portion
of these will fail, even the well-managed projects may simply be missing
some key ingredient, or run into bad luck. But some of these
space development ideas really will come to pass; the
X prize is proof that some things
do eventually make the transition from far-out idea to success.
The important thing is never to quit trying, and I feel privileged
to have met so many who have taken that to heart.
Maybe there won't be a space elevator going up in 2018 - but if there
is, I'd put at least even odds on Michael Laine being the guy behind it.
Not just from his presentation, but chatting with him in
the hallways, he is obviously very excited about
the prospects for his company; they've received
a lot of good press and seem in very good shape for what looks to
be a 15-year project before they actually see revenue from their main
business!
Will the next decade see the rise of the space entrepreneur?
Maybe we can help make it happen!
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