Florida's Space for Business efforts are coming out strong in Europe this week, as we struck up an agreement with the United Kingdom Trade Investment group and have begun working cooperatively with the ESA's technology transfer program office to assist space-related small and medium enterprises in the US and Europe to open up new markets and assist with setting up international offices. I also had the chance to meet with principals of several of Europe's largest aerospace companies to discuss their ambitions in the US and how Florida can play a role. I will be following up with each of these companies in the next few months, as well as with other contacts we were able to establish here at the Farnborough Air Show. I look forward to sharing that progress with you in the coming weeks and months.

Increased talk of commercialization of some aspects of aerospace that have been traditionally performed by government agencies - coupled with the continued capital access challenges in the traditional lending markets - many aspiring aerospace entrepreneurs may be wondering how to capitalize their growing businesses. In previous blogs and “tweets” on Space Florida’s website, we have identified alternative funding sources, including State business incentives, SBIR and STTR funding programs and others. Recently, I had the opportunity to hear firsthand from venture capitalists while attending the Florida Economic Development Conference (in Tampa) and the Space Investment Summit 8 (SIS8) in Chicago.  Since these conferences, Beth Kassab, a business columnist for the Orlando Sentinel, also commented about the need for venture dollars on the Space Coast (see http://www.orlandosentinel.com/business/os-cfb-kassab-nasa-jobs-06072010-20100604,0,5562247.column).  Given these recent events, I thought I would write this blog to share insight I gained so that you may determine whether angel and/or venture capital financing is a viable capital source for your aerospace company.     

So, what company characteristics do angel and venture capitalists look for when making investment decisions?  Above all, given the high risks they are taking (well beyond that of banks and other debt lenders), these investors seek high rewards – at least a 30-40% annual return on investment (ROI). Typically, companies that achieve this level of ROI have proven and passionate management teams with unique or innovative products or services that lead to competitive advantages in large growing markets. Perhaps Joshua Raffaelli, an associate and Kauffman Fellow at Draper, Fisher & Jurvetson, summed it up best during his remarks at the SIS8 when he cited Space Exploration as a company with potential to “disrupt markets and change the world.” Of course, not every new aerospace company needs to achieve the size and success of space exploration to be attractive to angel and venture capitalists. In fact, during SIS8 many small, but growing, aerospace companies presented their business plans to the investor community. Those companies with “buzz” successfully demonstrated the application of space-related technologies to terrestrial markets (such as human life support, emergency response, bio-products, green energy, and education).

            Although both angel investors and venture capitalists desire similar ROIs, there are some minor but important distinctions between the two groups that you should consider. Angel investors are usually high net worth individuals seeking to invest between $25K – $500K, oftentimes in new or early-stage companies, as part of their overall personal investment portfolio mix. Angel investors are generally not active in the management of the companies they invest in.  In contrast, venture capitalists are usually investment professionals that are managing funds provided by limited partners (LPs) such as pension funds or mutual fund companies. Given the judiciary duty owed to the LPs, venture capitalists are likely to be very active in the management of the companies in which they invest. Venture capitalists generally invest $1.5MM – $5MM in companies with an earnings history and/or strong growth potential. Both groups of investors require an exit strategy for their return of their equity investment as well as a ROI. This important success metric is usually an IPO (likely preferred) or an acquisition, usually within 3 – 7 years of the initial investment.

            So, given the above, what are the next steps if your company appears to be a viable candidate for venture capital? Well, update your company’s business plan and financials and discuss your interest with your legal, accounting, banking or other business advisors. It is likely that these professionals will have access to the venture capital community. Additionally, as I have indicated in earlier tweets, you may want to contact the funds created in recent years by the Florida Legislature – the Florida Opportunity Fund (www.floridaopportunityfund.com) and the Florida Growth Fund (www.floridagrowthfund.com).  Additional sources of information include the Florida Venture Forum (www.floridaventureforum.org) and the Florida Network (www.floridaangel.com).      

On April 29, I had another opportunity to attend a small business seminar at TRDA (the Technological Research and Development Authority) in Melbourne, on behalf of the Space Florida Business Development Team. TRDA is a fantastic resource for area small businesses. The TRDA team offers regular workshops, mentoring and office space for small, technical businesses looking to grow.

The day-long workshop walked through the proposal writing process for SBIR/STTR (Small Business Innovation Research/Small Business Technology Transfer) contracts. These contracts are worth shooting for. The federal government makes $2+ billion available annually through several agencies just for this program!

The room was packed – about 50 small business operators attended. The focus was on Phase I (proof of concept feasibility study) proposals. Additional programs are upcoming that focus on Phase II (prototype development, field-testing) and Phase III (follow-on R&D and commercialization).

A few items of note…

There are three key differences between SBIR/STTR:

1. Solicitation and budget differences
2. One deals with grant agencies, the other with contract agencies
3. SBIR and STTR have very different review processes 

SBIR – Did you know:

1. SBIR is the best opportunity for small, high-tech firms to seek R&D funding that will advance your small business technologies.
2. 33% of awardees are first-time winners and 70% of awards go to companies with 25 or fewer employees.
3. 2/3 of Phase I work and ½ of Phase II work must be performed by the small business for SBIR.
4. Collaboration with academics and national labs is allowed, by not required.

STTR – Did you know:

1. There are five agencies that manage the $1 billion in R&D dollars for the STTR program.
2. STTR must involve tech transfer from a non-profit out to a small firm, who manages the overall project.
3. Phase I awards are made for $100,000 - $150,000 for one year’s work.
4. Phase II awards are made for up to $750,000 for two years’ work
5. Phase III is funded by private or non-SBIR government money for commercialization
6. (and remember…) Allocation of shared intellectual property rights should always be determined at the outset of the STTR proposal process.

NASA’s SBIR/STTR opportunities are abundant, and (just as an “fyi”), the schedule for this year is:

·                     July 7, 2010 – Solicitations are published

·                     September 2, 2010 – Closing date

·                     November 2010 – Selections are made

Note: There is a “blackout period” on communication with the Center directly after the solicitation is published, so it is critical that you look at last year’s submissions and call to ask anticipated questions ahead of time.

Regarding how Florida ranked in SBIR/STTR project, it turns out:

1. Florida ranked #9 in 2008 on proposal submissions. (Our state logged 754 submissions, versus 4,200 in #1 state California)
2. Florida ranked #10 in that same year for receiving SBIR Phase 1 awards. 

Some other information that may be helpful:

1. The awarding of dollars through these contracts can take anywhere from six weeks to 18 months to show up for your winning bid – although the average is six to eight months.
2. Some costs are not “allowable” in an SBIR bid (ex. Marketing) – so ensure you know these rules and write as creatively as you need to!
3. From an SBIR/STTR perspective, a “small business” is (1) 500 employees or less – including affiliates, (2) for-profit and (3) 51% owned by U.S citizens or legally admitted individuals. Additionally, all work must be performed in the U.S. and the government has a limited right to use the technology – patent rights go to the small firm.

Small businesses have a wide variety of assistance programs available to them. In addition to TRDA, individuals like this event’s main speaker – Mark Henry – who specializes in submitting (and winning!) SBIR/STTR contracts (Mark has worked on 2,000+ SBIR/STTR proposals), would be extremely helpful. Tap into resources like these to best leverage your business’ capabilities and good luck in submitting your proposals!

Mark Henry of Grow Emerging Companies, LLC can be reached at or via phone at 303-679-8182.

Contact the NASA SBIR/STTR Help Desk 301-937-0888 or via email at . Visit NASA’s SBIR/STTR office at http://sbir.nasa.gov. 

This month, Space Florida had the opportunity to partner with the Department of Defense to utilize surplus Super Loki sounding rockets in support of an important research project. These rockets, managed by Space Florida and housed in our Camp Blanding facility, are contributing upper atmosphere monitoring capability prior to the flight test of a Defense Advanced Research Projects Agency (DARPA) hypersonic vehicle.

Scheduled to launch this week, the Hypersonic Technology Vehicle (HTV-2) high-speed glider will launch on a sub-orbital trajectory from Vandenberg Air Force Base, Calif., atop a three-stage Orbital Sciences Minotaur IV rocket. The automated HTV-2 will fly a series of maneuvers, testing long-duration thermal protection systems and advanced aerodynamic control features before impacting near the Reagan Test Site at Kwajalein Atoll in the Pacific Ocean.

Through a collaborative arrangement with the U.S. Army, and in support of the HTV‑2 flight, a suite of our Super Loki rockets were transferred from Camp Blanding storage facility to the Pacific Missile Range in Hawaii, where they will be launched to provide high-altitude meteorological data prior to the overflight of the test vehicle.

This teaming agreement will benefit both the U.S. Army Kwajalein Atoll / DARPA mission and Space Florida. Our friends at the Army’s Kwajalein Support Directorate said the Super Loki rockets were “critical in ensuring they would be able to meet their HTV-2 program requirements.”

Space Florida is making these rockets available in support of Department of Defense programs such as the HTV-2 project to help meet national aerospace research requirements. In exchange, Space Florida has received a no-cost X-ray inspection and expert verification of a portion of our existing motor inventory. (We will also receive a post-flight report detailing the performance of our Super Loki motors.) This data will assist in quantifying the rockets’ performance prior to again flying the Super Loki from Launch Complex 47 (LC-47) at Cape Canaveral AFS. Space Florida holds a real property license for LC-47 from the U.S. Air Force to conduct educational launches of vehicles such as the Super Loki.

Both Space Florida and Kwajalein will be better able to meet their mission requirements by launching these rockets. Kwajalein gets the upper altitude winds data they need at low cost, and we get performance metrics on our Super Loki motors. This data will move us along the road toward again flying the Super Loki from Florida.

Space Florida retains stock of more than 150 Super Loki rocket systems that provide a very low cost, high-altitude payload capability not available from other sources. The Super Loki motors were removed from the operational USAF inventory in the late 1990s and made available to the State for educational and research purposes. Since that time, Space Florida and its predecessor organizations have launched the vehicles from locations around the United States.

The Super Loki fits an altitude niche above balloon capabilities and below earth-orbiting satellites. It fits a payload niche small enough and inexpensive enough so that almost any educational institution can take advantage of the ride to validate portions of larger sounding rocket payloads. The rockets can be a low-cost means for testing various sounding rocket technologies or for retrieving data from the upper reaches of the atmosphere.

Space Florida is seeking cooperative arrangements with other Department of Defense and U.S. government or educational customers to make the rockets available for research purposes.

About the Super Loki:

The Super Loki motor and the PWN-12A-SB dart system is a two-stage vehicle consisting of a solid-propellant SR-110-AD-1 rocket motor as the first stage and a non-propulsive dart containing the payload as the second stage.  This class of rocket has been used since 1963 to obtain information about the upper atmosphere.

Over twenty thousand successful Super Loki launches have occurred.  These include launches from Cape Canaveral, Florida; Wallops Island, Virginia; Ascension Island; Kwajalein, Republic of the Marshall Islands; White Sands Missile Range, New Mexico; Fort Churchill, Manitoba; Antigua, West Indies; Chilica, Peru; Sheboygan, Wisconsin; Cape Henlopen, Delaware; and Poker Flats, Alaska.

Capable of boosting the payload to 82 km in just two minutes, the Super Loki is a little over three meters in length and weighs approximately 31 kg at launch, of which 17 kg is propellant. At burnout (2.11 seconds after launch) the Super Loki is travelling at a maximum speed of approximately Mach 4.8 or over 1,600 meters per second.

The annual National Space Symposium is a one-of-a-kind event that we at Space Florida eagerly await every spring.  Drawing together several thousand senior-level attendees from across the space industry every March or April in Colorado Springs - it is one of the best venues for accomplishing a great deal within a handful of days.  Indeed, in my 15 years of economic development work, it is one of the best conferences, in any industry, at drawing very senior executives to a single venue.  Even as Space Florida has changed its approach to NSS over the past two years – focusing on private meetings to advance business development opportunities in lieu of a presence on the tradeshow floor – we still invest literally hundreds of staff hours in preparing for this most critical event!

Between Frank DiBello and I, we had more than 10 meetings with companies across the space enterprise – ranging from large industry players to smaller enterprises looking to “break-into” NASA’s new focus on commercial space (moreover, this was all packed into two days – Wednesday was a race back to Florida for President Obama’s April 15 speech at KSC).  While the contents of these meetings cannot be made public (we are under Non-Disclosure Agreements with each of these companies), each one was very productive in that we discussed how Space Florida can support and enhance – be it through financing, facilities, workforce assistance, or other means – their creation of jobs in Florida.

Overall, a dominant theme of the conference was “how can my company prosper in the new commercial space realm?”  While much of the immediate attention is focused on NASA, there also is some very good thinking underway as to how to apply more of a commercial approach to national security space procurements.  The merits of the Obama Administration’s plan to use commercial carriers for access to Low Earth Orbit were robustly debated at the “NASA – The Budget and the Way Ahead” panel on which Frank DiBello participated.  Judging by audience reaction, there still is a healthy amount of skepticism as to whether this the best course for NASA.

Prior to heading out on Wednesday, I was able to attend Pratt & Whitney/Rocketdyne’s Power Breakfast with their President, Jim Maser.  Jim’s presentation is always thought provoking and this year was no exception, with significant focus on PWR’s efforts to utilize its decades-long expertise is combustion technology in diversifying into next generation applications for cleaner and more efficient energy generation.  It was a very relevant note on which to end the conference, as Space Florida works to diversify Florida’s space industry base among 10 market segments that utilize and depend upon the technologies and enabling capabilities of space.

On Sunday (April 11), Lt. Governor Jeff Kottkamp was joined by Senate President-Designate Mike Haridopolos, U.S. Senator George LeMieux, Congressman Bill Posey, Congresswoman Suzanne Kosmas and Astronauts Jon McBride, Winston Scott and Bob Springer – among other notables – to rally community awareness and support of our state’s future in the next-generation U.S. space program.

I regret that I was unable to attend the rally in person, but I was pleased to represent our state in critical meetings leading up to the National Space Symposium in Colorado Springs Sunday. I applaud Commissioner Robin Fisher’s leadership in this event and believe the rally truly helped deliver a strong message to our nation’s capital – that Florida is ready to take a leadership role in our President’s new space vision – and leverage our state’s workforce and infrastructure strengths to help the U.S. continue to lead the charge of innovation in space exploration.

As I mentioned by way of Commissioner Fisher’s comments at Sunday’s event, I believe the greatest danger in these times of change is not the change; it is to act without a clear strategic plan and clear goals...especially when it comes to space. As NASA Administrator Charles Bolden mentioned to national media during last week’s Headquarters press conference, we now have a more clear goal…definitive exploration beyond Low Earth Orbit – target Mars.

Now, especially after the release of this stated goal and greater definition of intended roles for the NASA Centers, it is more important than ever, to keep the pressure on the White House to be even more specific in work assignments for Florida (especially in the key Flagship Technology roles), and even more NEAR-TERM with respect to activating those KSC-based assignments.

Yesterday’s Rally was important and timely, critical in keeping the pressure on, that we need a conscious effort to preserve core capabilities here in Florida for the Nation's future. We cannot afford a large Gap in work activity between the current and the future program.

Now, we begin the work of developing and proving out the technologies that will effectively get us there. Florida is slated to play a critical role in that path, and I believe there is no state better equipped to meet the needs of our country’s ambitions than the home of today’s seasoned Shuttle workforce.

I am proud of our community. Your strong presence at events like Sunday’s rally send a critical message to the White House that we stand together…and the United States must reach together… in order for our country to remain a world leader in space.

 As SpaceX moves closer to the inaugural Falcon 9 launch from the Cape, it is a superb indicator of a commercial space future loaded with opportunities for Florida.  SpaceX’s successful test firing of the Falcon 9 engines a few weeks ago was a critical milestone and demonstrates that Florida is at a point where we need to prove out commercial capabilities – and this is certainly a positive step toward that goal.

In Space Florida’s Spaceport Master Plan, there are several projects proposed that specifically benefit commercial space interests in Florida. As part of that plan, we are promoting the following investments through the Florida Department of Transportation’s Five Year Work Program:

1. Four projects for Space X at Cape Canaveral, including storage, processing and refurbishment facilities for both the Falcon 9 launch vehicle and the Dragon Capsule
2. A Vertical Integration Facility (VIF) for United Launch Alliance (ULA) at Space Launch Complex 41
3. Three projects through the Jacksonville Aviation Authority at Cecil Field Spaceport pertaining to Reusable Launch Vehicle (RLV) facilities

As the State entity charged with attracting and expanding new aerospace businesses in Florida, we will continue to advocate aggressively for commercial growth.

In addition to achieving milestones like the Falcon 9 engine firing, Space X has played a vital role in the acceptance and growth of commercial space interests with the great support of the 45^th Space Wing and NASA Kennedy Space Center.  I am thankful to the Air Force and NASA leadership – and to companies like Space X and others – who continue to press forward to success and ensure Florida remains competitive in the changing global space marketplace.

On March 24, I had an opportunity to attend a small business seminar at TRDA (Technological Research and Development Authority)  in Melbourne, on behalf of the Space Florida Business Development Team. For those that aren't aware, TRDA is a fantastic resource for area small businesses. The TRDA team offers regular workshops, mentoring and office space for small, technical businesses looking to grow.

NASA, Boeing and USA representatives headlined the three-hour workshop I attended, which provided vital information for small businesses that are interested in doing work for the government.

Addressing an audience of about 25 local, small business operators, our speakers reinforced the fact that prime contractors are required by law to have small business subcontracting goals within their contracts – so it behooves all small businesses to take the steps necessary to be considered for such contracts!

I pulled out a few pieces of information that I thought might assist those of you that may not have had the opportunity to attend, but who have interest in bidding for government contracts.

When preparing to bid for government sub-contracting jobs, please make sure you:

1. Register with the Central Contractor Registration Database (CCR). Include your Dun & Bradstreet number (free), Federal Tax ID number, and make sure you complete the business profile requested in DETAIL – using key words that show your differentiators!
2. Make sure that ALL categories of your business size are listed on your CCR, including Small Business (SB), SDB, WOSB (Woman-Owned Small Business), HUB Zone, Veteran, Service-Disabled Veteran, etc. Sometimes searches are conducted specifically for certain types of small business categories, so don’t forget to use all the categories that are applicable to your business!
3. Register in the NASA Small Business Registry, an additional NASA vendor database (more information at the NASA Office of Small Business Programs at www.osbp.nasa.gov)
4. Always know your business size based on NAIC (North American Industry Classification) Codes
5. Understand Federal Acquisition Regulations (FAR) before applying for any contract

Once your small business is registered in the CCR and NASA Small Business Registry, use the NASA Acquisition Information System (NAIS – http://prod.nais.nasa.gov/cgi-bin/nals/link_svp.cgi) and FedBizOps at http://www.fbo.gov to identify current opportunities.

Small businesses have a wide variety of assistance programs available to them. In addition to TRDA, NASA-KSC has a Central Industry Assistance Office. The Small Business Administration (SBA) and SCORE have district offices located in every state as well, and there is also a Woman’s Business Center in Melbourne, at FIT. Tap into these resources to best leverage your business’ capabilities and good luck in securing your contracts!

I want to thank everyone for joining us for the recent Space Summit. For those unable to attend, I want to share some of the highlights from these important discussions and our focus on conclusions. As always, I welcome your comments and insights.  

I want to express my appreciation to our Governor, Charlie Crist, for his commitment to personally launch the day of work with a decisive call to action by announcing his administration's focus on The Space Transition and Revitalization Act (STAR). I am grateful for the thoughtful guidance and input from Lt. Governor Jeff Kottkamp, who considered and commented on a full roster of data and insights through the entire Summit.  

What do these Summit Notes mean to Space Florida and its President? Let there be no doubt, they are a signal for an action plan that involves our entire state in the advocacy and innovation required to capture much more of the global space market. You have my commitment that, as your intermediary, Space Florida will ensure actions are staged in plain view of the Florida team, advanced with a sense of ownership among all our great regions, and managed with urgency, data and passion. Our Space Day efforts, White House communications, Congressional unity, and ongoing Florida legislative leadership and support throughout this session require our focused attention and continued communication and action.   

Thank you for all you do for Florida. I know we can translate our legacy and know how into market share and opportunity for generations to come IF all see this as our priority.

Click to open Attachment

Attachment above is a brief on the Space Industry Summit

Last month, I had the opportunity to attend the Next Generation Suborbital Research (NGSR) Conference in Boulder, Colo. At this event, researchers from various disciplines, institutions, and locations gathered with suborbital vehicle developers to address details of a growing market segment for suborbital spaceflight: Suborbital Research.

The newly-formed Commercial Reusable Suborbital Research (CRuSR) program, based out of NASA Ames, will be administrating $15M per year for the next five years, which is proposed in NASA’s budget for suborbital research.  This is the first time NASA has allocated funding for this application. Florida hopes to play a key role in the program.

Suborbital vehicles currently in development are designed to reach altitudes of about 100 km, which will produce a period of about 3-5 minutes of quality microgravity time. Significant science can be accomplished in this amount of time. Examples of proposed research include:

• Microgravity Experiment on Dust Environments in Astrophysics: MEDEA is an experiment with three modules designed to study the early stages of planet formation and the behavior of regolith in low gravity planetary environments (presented by Josh Colwell from the University of Central Florida).

• Performing Atmospheric and Ionospheric Science Experiments at the Edge of Space: Suborbital observations can provide regular access to a region of space that has always presented difficulties to experimenters interested in the chemistry and coupling of energy and momentum from the middle atmosphere to the ionosphere, essentially to space (presented by Thomas J. Immel at University of California Berkeley).  

• Condensing Heat Exchanger Concept Developed for Space Systems, or CHESS, presented by J. I. D. Alexander from Case Western Research University.  A more efficient design for water removal from cabin air in space flight. This would remove the water directly from the air without the need of an additional water separator downstream.

Space Florida and NASA’s Innovative Partnership Program funded a microgravity research rack that will play a role in future research initiatives. This device, known as FASTRACK, is designed to house experiments on suborbital flights.  FASTRACK is a universal rack that would serve a wide variety of experiments on any suborbital vehicle, and we feel it will have great utilization opportunity under the CRuSR program.  The rack consists of two middeck lockers and one support drawer containing batteries and instrumentation in its standard configuration (although the rack can be used in multiple configurations).  The standard size is 2’x2’x3’ and a maximum of 300 lbs including experiments.  Each section can be rotated around the z-axis or stacked in any order for user convenience and experiments can use either battery power or vehicle power.  

I brought Space Florida’s FASTRACK unit out to the Boulder conference to display and promote its use.  There was a lot of interest in it by the community, mostly because it is a turnkey system that can be customized so easily. Space Florida is interested in testing the rack further on suborbital test flights (it has flown once successively on ZERO-G).  The rack is available for use now on a weekly basis. Long term plans are to develop a second-generation FASTRACK based on lessons learned and in response to the market.

Overall, the conference was very beneficial, and helped us to focus more strategically on addressing the microgravity research market. I am also happy to report that, as members of the Commercial Spaceflight Federation, and strong supporters of the Suborbital Applications Researchers Group (SARG), Space Florida has teamed with the University of Central Florida to host next year’s NGSR conference in Orlando on February 28-March 1.  We are thrilled to have the conference coming to our state. I look forward to seeing you then!

Note: If you are interested in more information about FASTRACK, please feel free to contact me at ">.