Guest: Dylan Taylor; Topics: Commercial space finance and economics. Please direct all comments and questions regarding specific Space Show programs & guest(s) to the Space Show blog which is part of archived program on our website, www.thespaceshow.com. Comments and questions should be relevant to the specific Space Show program. Written Transcripts of Space Show programs are a violation of our copyright and are not permitted without prior written consent, even if for your own use. We do not permit the commercial use of Space Show programs or any part thereof, nor do we permit editing, YouTube clips, or clips placed on other private channels & websites. Space Show programs can be quoted, but the quote must be cited or referenced using the proper citation format. Contact The Space Show for further information. In addition, please remember that your Amazon purchases can help support The Space Show/OGLF. See www.onegiantleapfoundation.org/amazon.htm.
We welcomed Dylan Taylor to the show to discuss commercial space finance and economics. During the first segment of our 95 minute program, Mr. Taylor introduced us to his space background and why he thought space development and exploration was transformational for humanity. Switching to the topic of commercial space, I asked our guest where the big financial commercial space success story was and did we need such a model to "breakout" into a world of more normal commercial space investments. In his reply, our guest talked about the life cycle of capital and the need to see institutional investors in the game. He then went through the chain of development and events needed to have institutional investors and funds involved in the commercial space economic sector of the economy. Our guest strongly suggested that the steps he was talking about could not be skipped. Don't miss this important discussion.
Another topic discussed was the difference between angel investing and venture capital. The differences explained were many but they are often blurred by people not understanding the role of an angel as compared to that of a venture capitalist. For example, an angel investor may be more tolerant of a longer time line to reach the ROI goal, maybe up to ten years. On the other hand, the VC is probably looking at a maximum period of five years to realize the ROI goals. Hot plays today for this investment include Earth observation as it is well understood. Big data plays and AI are also there but more challenging.
Joe from Boston asked about the impact of the regulatory environment on commercial space investment. Our guest had much to say in response to Joe's question so don't miss it. Joe also asked about management team, executive experience and credentials, specifically in the NewSpace industry. Again, Dylan had much to say and some of it may surprise you so don't miss this discussion either.
Our guest was asked about competing investments. Does an investment in space compete with a terrestrial investment? Part of Dylan's response to this question focused on noting that a space dedicated fund was missing and he thought one was needed. He had much to say about this and the potential impact such a dedicated fund could have on commercial space financing going forward. In this context, we talked about the billionaires financing their space venture and the overall impact of their activity on the commercial space sector.
Near the end of the first segment, Wayne asked for a commercial space economic forecast for 2017. For the most part, Dylan said he was bullish. He talked about possible space sectors that were doing well and would likely continue doing well but he said it was too early to tell about the new administration and space. In addition, we talked about rising interest rates and what that means for both public spending on space and the private sector.
In the second sector, Michael Listner called to comment on our earlier space infrastructure comments. Michael will be our guest on Sunday and can expand on what he was saying during this program. I asked our guest if a private company doing space infrastructure projects could be profitable from an investment and investor perspective. Don't miss what he said in response to my question.
Our conversation moved to the smallsat industry which he said was very hot. We talked in detail about this segment, the growth and would there be a shakeout in the industry down the road. Again, don't miss what Dylan said in response to this and other smallsat industry related questions.
Again, the US national debt service came as did more on interest rates. Dylan talked about the G20, the problems facing the developed world and how best to get out of our current economic mess. We talked about creating economic growth, inflating our way out of economic problems, and other ideas. This is of interest because space is a discretionary item in our national budget but entitlements and funding the debt service are not. As the cost of funding our $20 trillion debt climbs due to rising interest rates, infrastructure projects, and potential tax reductions, then one has to be concerned if economic growth can make up the shortfalls along with cuts in spending. How this will impact discretionary budget items including space remains to be seen but it is an area to watch into the future.
Toward the end of the program, Dylan got a student email asking about space careers. Before signing off, our guest said one of the key things to focus on in the coming year and going forward will be Down Mass from orbit. He has an article appearing on this topic in an upcoming issue of Space News.
Please post your comments/questions on TSS blog which is part of this archived program on TSS website. You can reach our guest, Dylan Taylor, through me.