Sources of Financing or Investment

"There is just one thing I can promise you about the outer-space program: your tax dollar will go farther."
-- Wernher von Braun

It is interesting to speculate as to who might finance a Space Tether project. The list below should be relevant to the question of financing the development of any low cost to orbit launch system.

Tourism Industry

The current (Earth bound) tourism industry is around $400 billion per year. Tourism is the clearest big market for low cost space launch. Some of the large hotels like Cendant, Marriott, or Hilton could finance this project on their own or in some joint venture. The hotel industry has made investments larger than this project for one hotel. For example, the Bellagio cost $1.6 billion and was the costliest hotel in 1998. In fact, there is a Las Vegas hotel tycoon who wants to make a space hotel and has formed Bigelow Aerospace to work toward this.

Airlines buy airplanes that are over $100 mil each. So at least some of them could make this kind of investment.

A combination of companies could do this project as a joint venture. For example, two airline companies could partner with 3 hotel companies where each put in $100 mil, for a total of $500 mil. This joint venture could then hire some aerospace companies to do the actual development. The aerospace companies could be paid mostly with cash, but also partly with shares in the joint venture. The airline companies could each operate a few SSTT rockets and the hotel companies could each operate hotels. A combination like this could reduce the risk exposure for any one party.

Venture Capital

The Venture Capital industry could finance a project of this size. They are used to risk as long as there is a good potential return. If the right combination of a credible team of people, some serious potential customers, and a good business plan all came together, venture capitalists would sign up.

But the risk of the US government not permitting a company to carry tourists to space might scare investors away. The new venture would be wise to start outside the USA to eliminate the risks of getting caught by US red-tape. Also, if the company is started in a taxhaven it could eliminate corporate tax, and so yield a better return to investors.

Movie or TV Industry

If costs can be reduced to $200 million, it could be within the reach of the movie or TV industries. The Discovery channel helped fund a $30 million telescope at Lowell Ovservatory in Arizona.

Aerospace Industry

The aerospace industry is making money on existing expensive expendable rockets and the Space Shuttle. If someone made one reusable rocket, the whole aerospace industry might loose this source of income. So there is some reason to claim that the aerospace industry is not motivated to make a reusable rocket. However, innovative things have been done to lower costs before, such as Sea Launch. So it is not out of the question.

The aerospace industry usually has customers lined up before they build something. So they would probably line up some hotel companies or some big DOD contracts before they did this. But this could work.

Cruise Ship Industry

The Carnival Corporation has a yearly gross of about $4 bil and net of about $1 bil. A large cruise ship can cost about $500 mil. This price is cheap enough for Carnival to order 4 of them, for a total of about $2 bil. Some cruise ship companies could afford a project like SSTT.

The Cruise Ship industry has an advantage in their comfort with thinking internationally. In particular, they usually flag ships outside the USA, which reduces taxes, personnel restrictions, and liability lawsuits. There are other countries where licenses, permits, certifications, and launch permits would not add as much to the costs, delays, and risks of obstruction as being in the US would. I think a venture started by people in the cruise ship industry would not be based in the USA, and so it would have a higher chance of success.

Mining Asteroids

The scarcity of precious metals is the result of over 4 billion years of tectonic mixing which has moved most precious metals to Earth's core. The few deposits near the surface are hard to find and therefore expensive (about $10,000 per pound for platinum). These same metals are not hidden on asteroids, since there has been no tectonic action and almost no gravity. There is more precious metal in one asteroid than we could every hope to mine from all the crust of the Earth.

Getting to a near Earth asteroid and back would not be nearly as expensive by using Space Tethers to get to orbit, a tether-toss toward the Moon, ion drives, gravity-assist from the Moon, and aero-breaking coming back, as it would be with rockets. In fact, it could be cheaper to mine asteroids for some metals than to find them on Earth. Mining asteroids does not have the problem of needing to certify a rocket for passengers. There is a real market for Gold, Platinum, etc. If you could bring the metals back, you know you could sell them. If a mining company decided they wanted to mine some asteroids, they might finance a Space Tether projects.

Mining will probably start off with some small test cases. These could take 2 to 5 years to get results back. After the first results come back the scale of mining could grow. However, for some years, it will probably be experimental and not high volume production. So mining probably won't need a high volume of launching for some time.


At one time Teledesic planned to launch nearly 1,000 satellites. If someone really wanted to launch a large network of satellites, it could be less expensive to first invest in SSTT.

US Department of Defense

The total 2004 DOD budget is $400.5 billion. The DOD is working on a defense against ICBMs and launching many other payloads into space. If launching costs were brought down by a factor of 10, they could save a bunch of money. So it would make sense for them to back such a project. There are many ways they could do it. For example, it might be enough for them to offer a contract for $1 billion worth of launches at $200/lb. (That's 5 million pounds for the cost of two shuttle launches.) This is 10 times cheaper than todays going rate, so not a bad deal for the DOD.

Non-US Country

There are a number of other countries that could easily afford a system like this. I can imagine China, England, India, Japan, Russia, or Israel doing this. It is not really that hard. In fact, China has said they want to put a manned base on the Moon. If you want to put a manned base on the Moon, you really want a couple tethers so you can send stuff from LEO to the Moon and back easily. Once you see how much that helps, the idea of using a tether get to LEO is very attractive.

Billionaire having Fun

Someone like Elon Musk who founded both PayPal and Space-X, or Jeff Bezos who founded both Amazon and Blue Origin, could just decide to do it. In fact, much of what Space-X is working on could probably be used in this project. Note that Paul Allen gave $12.5 million for a radio telescope with no possible financial payback. This project has very real potential for making money. It can also make a difference on the future of mankind, which can motivate some people.

Selling Shares to the Public

Investors could be individual or company wanting to invest, if they become convinced that space tethers are a sound investment, with good expected return and reasonable risk, It might be 10,000 people investing an average of $50,000 each. The US has regulations which make this approach not practical with US investors.

Advanced Ticket Sales

Some companies have taken money for rides to space before they actually have rockets to fly people. If this money is used for development, it seems unethical, because there is the chance they can never deliver the service for which the customers paid. This kind of money probably should be held in escrow. While this can help convince other people to invest, money in escrow does not directly provide funds for development.

Investors get a cheap ticket option

While I would be very careful about selling tickets to ride on a rocket that does not exist, I can imagine a deal where for every $50,000 that someone invests, they get one option to buy a ticket at a special price of $10,000 if everything works out.

Like any other investor in a startup, they would understand they could loose their investment. However, if it works, they have an option to fly cheap. This plan also would probably not be able to accept US investors.

Microgravity Manufacturing

There are some advantages to making computer chips in space. Having a vacuum everywhere lets you avoid many steps in manufacturing chips. Having no gravity can let you grow better crystals. If it turns out that by making chips in space you can get faster or bigger chips, then Intel might be interested in sending stuff into space. If all they need to do is grow some crystals, then they will not need to send much into space. But if they want to operate a full fab line in space, they could be interested in a cheaper way to get to orbit. The semiconductor industry is around $200 billion per year. Intel, or some other company, could fund a Space Tether project if it made sense for them.

There may be other micro-gravity manufacturing that makes sense. Some people have been interested in making drugs in space. But to be interesting from the launchers point of view it has to be a sizable volume.


It has been said that NASA is hostile toward "space tourism". NASA has some 15,000 people working to support the Space Shuttle. The Space Tethers approach has the potential to make the Space Shuttle obsolete. If a private company is selling tickets to space for $50,000 it is hard to justify NASA spending many millions for each astronaut they launch into orbit. If congress cancels the Space Shuttle there could be 15,000 people out of work. So there is reason to speculate that some people at NASA might not favor the Space Tether / SSTT approach.

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Copyright (c) 2002, 2003 by Vincent Cate. All rights reserved.