By JOHN ANTCZAK, Associated Press Writer
LONG BEACH, Calif. - It was billionaire Paul Allen’s $20 million that allowed Burt Rutan to build SpaceShipOne, the first privately financed manned rocket to reach space
In Oklahoma, a state tax credit was key to getting Rocketplane Ltd. funded to begin work on a reusable launch vehicle for space tourism flights that would originate from one of the state’s old Air Force bases.
In California, meanwhile, Xcor Aerospace seeks government contracts to develop technologies that can be adapted to its real goal of developing its own passenger rocket.
Such disparate approaches to funding the entrepreneurs of the new small-scale commercial space race emerged as one of the themes of this year’s annual conference of the Space Frontier Foundation, a group that hopes to expand space access beyond government programs.
“There isn’t anything that is typical,” Xcor President Jeff Greason said Friday in an interview. “Every participant in the industry has gone down a very different path.”
SpaceShipOne’s three dramatic spaceflights in recent weeks, its capture of the $10 million Ansari X Prize and the global attention it gave the budding industry infused the conference with optimism.
But with investment still a question mark, notes of caution accompanied enthusiasm.
“I certainly think it’s going to be a huge step in developing the industry,” Greason said. “Many challenges remain. I never expect that anything is going to solve all problems, but it’s raised the profile of the industry. It’s helped to change the way people think about space.”
In a conference session on investing in what are being called “alternative space companies,” the role of billionaires backing projects was seen as useful in attracting other investors.
“The business community looks at these fellows and says they are very smart people and follows where they are going,” John Spencer, president of the Space Tourism Society, said during the opening day of the conference aboard the permanently berthed old ocean liner Queen Mary.
Spencer also suggested that there was a strong basis in the statistics of “Earth-based space tourism” to promote actual spaceflight.
He cited the millions of annual visitors to the Smithsonian’s National Air and Space Museum, NASA (news - web sites)'s Kennedy and Johnson space centers, attendance at planetariums, space camps and science centers, as well as the popularity of space in movies, on TV, in books and on the Internet.
“All of these are catalysts for building the real space tourism industry,” he said.
But billionaire funding can’t cover the development of everything required for commercial space infrastructure, said Thomas Olson, chief executive of the Colony Fund.
“We’re starting from scratch,” he said, describing communication and data systems and the parts that go into spaceships. “There’s not enough wealthy patrons to be able to build this stuff by themselves.”
The Colony Fund is a mutual fund being created to tap into public interest, he said.
“Now the general public can take part in a small way, investing in a tiny part of a larger portfolio for something that has a lot of risk to it, but possibly some great rewards over a long time horizon,” he said.
The first Colony Fund is intended to be a $500 million fund, which he acknowledged “doesn’t seem like a lot in the grand scheme of things” but will serve as the financial market’s equivalent of SpaceShipOne, Olson said.
“It is a test model to see how well this is going to work,” Olson said. “Future funds, whether we make them or other people get into the game and start making them, are going to attract a lot more money and they’re going to attract institutional money at the same time, which kind of legitimizes things a lot for everybody.”
In the meantime, he said of the mutual fund industry, “There’s nothing really out there investing in small entrepreneurial firms trying to break into those markets.”
Walt Anderson, chief executive of the aerospace technology company Orbital Recovery Corp. and founder of the venture capital company Gold & Appel, offered a carrot and a stick.
“It’s been a pretty good month for this group because if all your friends thought you were nuts and commercial space wasn’t real, you could watch the evening news and find out that there was some reality here,” he said.
But he then bluntly warned the group that fledgling U.S. companies may face competition from entrepreneurs around the globe because of the way the U.S. government enforces restrictions on technology.
“Europe has the same type of regulations like ours to prevent technologies from falling into the wrong hands. The difference is their implementation of those same recommendations is more realistic and allows us to run our business. And if we don’t commit a crime we’re free to run our business,” Anderson said. “Here … you’re guilty before you’re even out of the box.”
He asserted that those restrictions mean that the best and brightest are no longer coming to the United States to pursue careers in the space industry.
“We have to keep in mind that the United States, while we’ve brought a lot of technology into the world, may no longer be the center of the universe for space forever,” he said.
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