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What Financial Incentives and Tools can Government provide to support Long Term Space Projects?

If US commercial space is to serve as “critical infrastructure” and to serve as critical infrastructure, it must be financed and use market structures for the long-term, like other critical infrastructure. Private capital can trade risk for return over longer timeframes than venture capital (3 – 5 years), SPACs (2-3 years) allow. The capital can come via corporate bonds, government or private credit enhancement, risk-transfer derivatives readily traded on a suitable exchange, tax exempt treatment of interest and other long-maturity financial instruments that match capital suppliers with the lifecycle phases of space assets.

US national security will depend on privately owned and privately financed space infrastructure. Thus, the role of federal “financial engineering” would diversify the financial risk and sources of capital essential for commercial space, while simultaneously assuring the constancy of the availability and pricing of capital for space companies across their growth paths.   Space bonds issued by space companies directly or through state or local economic development authorities could grow the portions of the regional economy focused on building, operating and owning assets as space infrastructure.

New market mechanisms, such as an exchange for tradable space commodities, will help banks, investors, commercial space customers and the federal government match the supply and demand for satellite and related space services in various orbits at convergent timeframes, and thus assure complementary capabilities and the interoperability to use them as parts of the space economy.

Date: June 3, 2021 Time: 8:00 am - 8:45 am Chris Quilty

Quilty Analytics
Bruce Cahan
Department of Management Science & Engineering - Lecturer

Stanford University
Preston Dunlap
Chief Architect

Department of the Force and Space Force
Tom Gillespie
Managing Partner

Tess Hatch

Bessemer Venture Partners