FYI,

"Challenges Ahead for New Space Investors"
SPACE.com
http://news.yahoo.com/s/space/20080619/sc_space/challengesaheadfornews
paceinvestors;_ylt=ArL9mA8UxCCJ8rot68jWVM8E1vAI

: New startups hoping to make their mark on the space industry still
: face high entry barriers just to cover their initial costs,
: investors said Wednesday.

: The high cost and risks associated with new commercial ventures,
: as well as the bureaucratic government hoops they have to jump
: through, provide substantial barriers for nascent companies
: aiming for space, experts said during the 2008 Space Business
: Forum here presented by the Space Foundation, a non-profit
: advocacy organization.

: According to the foundation's Space Report 2008, the space industry
: generated about $251 billion in revenue worldwide in 2007, an
: 11 percent increase from $225 billion in 2006. About 69 percent of
: that 2007 revenue was the result of commercial activity, according
: to the report.


: "If anything, the market is a little bit hesitant," said Thomas
: Watts, managing director for equity research for the investment
: firm Cowen & Company, LLC. While investors might be open to
: established private firms going public today, new companies may not
: be so lucky. "Investors are open to it, but at the same time, I
: think there's a wait and see attitude to new ventures," he said.

: High operations costs remain a major barrier, investors said. That
: is particularly true at the start when major investment in basic
: launch or spacecraft development infrastructure is required before
: returns can be seen.

: "There's some parts of the business, on the operations side, where
: you're talking about significant investments of capital up front,"
: said Hugh Evans, a partner with Veritas Capital, an investment
: firm, adding that there will always be interest in affordable
: launch providers. "Some of the trends we find attractive are
: obviously the declining costs of being able to launch satellites."

: Newt Gingrich, chairman of the Gingrich Group and a former speaker
: of the U.S. House of Representatives, said the bureaucratic red
: tape inherent in approving space assets for flight — particularly
: at NASA — is a major obstacle for newcomers to space industry.

: "We need a fundamental, real change in how we're approaching
: space," Gingrich said. "We need a change that allows Americans to
: participate, not just bureaucrats."

: Gingrich said the risk-adverse focus of NASA and space-oriented
: government offices has stymied progress in both commercial and
: government-sponsored exploration efforts.

: "We have adopted an insane model of being so risk averse that we
: spend so much time and money on avoiding error that we avoid
: achievement," Gingrich said, noting that if the country today
: tolerated risk as well as it did in the first 25 years of
: aviation, "we would have a colony on Mars by now."

: Gingrich said tax-free cash prizes for major accomplishments, like
: a $1 billion purse for the ability to repeatedly launch and land a
: recoverable orbital spacecraft, could do wonders for spurring
: private innovation. If the prizes are set to be budgeted only in
: the year they are won, rather than set aside for years until a
: winner comes forward, then it might be more palatable for
: lawmakers, he added.

: "I am passionately committed to prizes," Gingrich said. "The great
: power of prizes is simple; they allow anybody anywhere who's
: competent to try and solve a problem."

Mark Reiff