Raising capital can be especially difficult for a company whose future plans are up in the air. But as the commercialization of outer space accelerates, small companies are managing to stake their claims to the high frontier.
Many small companies are opting for such supporting roles in major projects as doing studies for the National Aeronautics and Space Administration's planned space station. Others are launching their own space projects in communications materials processing, and expendable launch vehicles. NASA has signed agreements with several companies to provide facilities aboard the space shuttle for commercial projects.
The agreements don't include funding, which is usually an astronomical headache. Space Industries Inc., a Houston-based company, has chosen to rely on individuals to fund the research and design for concept studies of an orbiting space laboratory. Potential investors, says Douglas Lilly, the company's vice-president and program manager, are uncomfortable with the length of time it will take to receive any return on their investments -- if there is any return at all -- and with their inability to measure the market for space-related products.
Microgravity Research Associates Inc., of Coral Gables, Fla., had no easy time raising about $1.5 million for research on gallium arsenide, a semiconductor material the company hopes to make in space. "These things always take a little boldness and adventure," notes president Richard Randolph.
Completing a successful rendezvous and docking maneuver with big corporate names doesn't hurt, either. In June, Orbital Sciences Corp., a two-year-old company in Vienna, Va., completed a $63-million financing package with the help of Shearson Lehman/American Express Inc., which underwrote the company's research and development limited partnership offering, and Martin Marietta Corp., which agreed to produce hardware for the company's rockets.
Raising capital should become easier if the first few ventures make a profitable landing from orbit. At that point, companies interested in space may find that things are looking up.