The next industrial revolution may very well begin in outer space. Now, some thirty-five years after the first satellite was launched, commerce in outer space has never been greater. In 1999 alone, commercial ventures in outer space attracted more than $9 billion in investment and generated more than $87 billion in revenue. New Space Industries (NSIs) are in the offing, but their success still depends on their ability to attract invest-ment capital. In this paper I will discuss how NSIs and their investors can overcome the financial obstacles and initiate in a new era of space industrialization.

Currently the most likely source of capital for NSIs is angel financing and venture capital. In angel financing a generous organization or individual offers funds because of an interest in the project more than a concern for profit. Angel financing is relatively rare and NSIs should not depend exclusively on this type of financing, despite its positive track record for space investments. Venture capital is the more important source of financing for start-up companies, even those venturing into outer space. Recently I completed a third survey of venture capitalists that analyzes the group’s interest in investing in outer space. These findings are summarized and compared to previous surveys, providing a twelve-year historical perspective to investing in NSIs. What will be required to attract investment to the new commercial opportunities in outer space is a frequently asked question that is answered in this paper.

The most significant obstacle to financing NSIs is the lack of affordable space access resulting in extremely high space transportation costs. Until a new generation of reusable launch vehicles (RLVs) can be financed, most NSIs will appear too risky to investors. Once RLVs are economically available, there will be a number of start-up ventures in low Earth orbit. Already MirCorp has announced plans for its first Citizen Explorer to visit Mir for the reported price of $20 million. This is an important first step for space tourism. NSIs will become viable businesses when space entrepreneurs learn how to accurately forecast space-based markets, project earnings and risks, design plausible bus-iness plans, and assemble proven management teams. Successful commercial ventures in low Earth orbit will assure confidence for financing missions to the Moon, asteroids, Mars, as well as space settlements.

Private Funding and Commerical Investment