Broadcast 1289 (Special Edition)

11 Jan 2010 John Vornle
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Guest: John Vornle. Topics: Space business finance, SSP, private equity solutions to develop space commerce. John Vornle of Long Term Capital was our guest for this program to discuss private space business capital acquisition models using space based solar energy. In our first segment, Mr. Vornle outlined three methods of financing space projects including the traditional government solution, public/private partnerships, and private equity financing which was the main topic for tonight's program. In discussing private equity solutions, he talked about the banking and lending component, insurance, and the different categories and phases for investors. He also introduced us to the exit strategies most likely to be used for each phase or category of investment. Mr. Vornle explained the risks, how bankers and equity investors view the situation and he put forth the case as to why now is the time for developing space based energy. Toward the end of this segment, our guest pointed out that as of now, we have no political will to move such a space energy company forward but then he mentioned some developing signs of hope in this area. Listen carefully and see what you think. In the second segment, Mr. Vornle outlined the private equity solution advantages for pursuing this investment model and for pursuing an SSP energy company. We talked at length about the market cost for electricity and said that it needed to be set by third parties, there needed to be corporate profits and the payment of corporate taxes. This took us into an extensive discussion on why utility companies were not the best source of SSP energy company development. You need to listen to this comprehensive discussion as its about the need to develop and implement new, cost effective technology and why the utility company model does not work. As we started the third and final segment, we talked about financial returns on investment associated risks. John stressed the need for simplicity. Invest in a C-Corp, own stock, know exactly what percentage of the company you own, and seek a capital gains investment. He outlined for us suggested ROIs for the various phases of equity investment. Market timing was discussed as were space investments not suitable for equity investment but more for visionaries or grant financing. Later in the segment, he said the most important thing to do is to change the political will of the U.S. system to support the business development that has been discussed on this show. Toward the end of the segment, he described the contingency power purchase agreement which is at the root of the plan discussed. If you have questions or comments for John Vornle, please send them to longtermcapital@cs.com or to me at drspace@thespaceshow.com.

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