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Spaceflight industry ready for takeoff
Startups reach out to investors interested in money, not just glory. Doug Benc / AP file
XCOR is one of several space startups trying to develop private-sector space travel.
Alan Boyle/Science editor/MSNBC
SCOTTSDALE, Ariz. - The private spaceflight industry got its start on the wings of angels - rich men like Paul Allen, who spent more than $20 million on the SpaceShipOne to win a $10 million prize and a place in history. But even angels can fly alone for only so long. The people who rely on those space angels say it's now time for their industry to go to the next stage of development, in which investors are in it for the money as well as the glory. "We're hopefully moving soon toward a situation where institutional investors start looking at this industry," said Rich Pournelle, a spokesman for XCOR Aerospace in Mojave, Calif. "Angel investors don't want to be the only ones funding a company. They're always looking for critical mass." Pournelle and two of XCOR's angel investors say they see signs that the critical mass is coming closer - in the success of SpaceShipOne, in the resulting multimillion-dollar deal with Virgin founder Richard Branson for a fleet of SpaceShipTwos, and in last year's enactment of a law that at last could open the way for private-sector space passengers. Dot-com spotlight Yet another sign comes this week, in the form of a conference that puts private spaceflight as well as personal aviation in a spotlight more typically reserved for blossoming dot-com ventures. The Flight School conference is being presented by Esther Dyson, one of the computer industry's movers and shakers, as an add-on to the annual PC Forum she's conducted since 1983. Dyson admits she's no expert on space, but she hopes she can contribute by bringing together investors and market opportunities - just as she has in other tech sectors. "The thing that really excites me is what excited me about PCs and the Internet," she told MSNBC.com earlier this week as she was headed to the event in Scottsdale. "It's people doing something new and taking risks." Some space-industry observers note that the Flight School isn't exactly breaking new ground. For years, the annual Space Access conference in Phoenix has brought together rocket-builders and investors. But XCOR's Pournelle welcomes the added attention nonetheless. Institutional venture capitalists, or VCs, haven't yet taken much of an interest in startup aerospace companies, Pournelle said. "Most of the aerospace institutional capital is midmarket and up - nothing under $10 million in [annual] revenue," he said. The federal government is about the only source for those kinds of contracts, either through NASA or the military. "That has to change if we're going to see significant growth in the industry," Pournelle said. Dyson said venture capitalists were indeed beginning to take note. "We do have a bunch of VCs coming, but it's certainly not your typical Mayfield or Kleiner Perkins," she said. From the mouths of angels Two of XCOR's angel investors said they also sensed a change in the air. "The giggle factor has definitely gone away, and that's a huge reason why real financial people will talk to you," said Joe Pistritto, who counts himself as the second outside investor to put money into XCOR. "The industry has suddenly become real." Lee Valentine, who has been an angel investor in robotics and the computer industry as well as space ventures, recalled the reaction he used to get when he lobbied for private spaceflight on Capitol Hill. "People looked at us like, 'Oh, surely you're smoking something. Only governments can fly in space,'" he said. Then came SpaceShipOne.
Tech/Science
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