The U.S. space agency is planning to launch a venture capital fund this year, following in the footsteps of other government agencies that have sought to improve their access to cutting-edge technology and goose its development with strategic investments of federal funds.
The National Aeronautics and Space Administration introduced the effort quietly this month with no formal announcement, just a “Request for Information” from organizations interested in partnering with the agency to set up an independent venture capital fund.
The fund, to be called Red Planet Capital, will be modeled on In-Q-Tel, an independent nonprofit firm set up by the Central Intelligence Agency in 1999.
The CIA’s idea was that an independent investment firm could much more easily identify, partner with, and invest in startups developing technology that might be crucial to the agency’s mission than could a bureaucracy-bound government agency. Making such investments was also seen as a way to accelerate crucial research and development efforts.
“NASA’s looking at going to the moon and returning to Mars and at ambitious plans for human space flight,” said agency spokesperson Melissa Matthews. “We’re building on existing technology, but obviously there’s technology we need to foster, so this is one way of doing that.”
Tapping Startup Savvy
NASA hopes the effort will help it tap into the savvy of startups that might not be traditional government contractors, she said. The agency expects to invest $11 million in fiscal 2006 and eventually grow to about $20 million a year.
Since its origin, In-Q-Tel has invested in more than 90 companies and reviewed more than 5,400 business plans. It often partners with other private equity investors, with the result that each dollar In-Q-Tel invests leverages more than $8 in private capital.
“We would envision a similar kind of situation,” said Ms. Matthews.
The idea of setting up a NASA venture capital arm “has been circulating for at least a couple of years,” she said. “It predates our current administrator.”
In-Q-Tel Connection
NASA Administrator Michael Griffin, who joined the agency in April 2005, was formerly chief operating officer of In-Q-Tel.
The initial technologies NASA wants its venture program to focus on are those that involve water reuse and recycling, improvements to space suits and other machinery used in exploration, environmental monitoring and control, and data systems and biomedical support for exploration missions.
NASA is also looking for technologies that can help astronauts fix equipment malfunctions with whatever items they have on hand.
“That’s a really important thing if you’re going to set up moon bases or take a six-month journey to Mars,” said Ms. Matthews. “They’re having to do some of that in the space station—some astronauts call it MacGyvering.”
MacGyver was a popular 1980s television character who used common items such as light bulbs, pine tar, and cleaning fluid to devise inventions that would help him get out of tough situations.