On March 6-7, we held our inaugural Air Force Pitch Day in New York. We invited small businesses from across the country to pitch their ideas, and our venture team had 51 of them on one page contracts, worth $8.75 million, in less than 15 minutes each. The fastest was done in three!
This took place during a fantastic week of 242 small business awards, many of which were space related. With $660 million in small business innovation dollars available annually, we are an ideal space investment partner: our money is non-dilutive; our company equity requirements, nil; our return on investment expectations, conservative; our resources, significant; our payment speed, lightning; and our mission, nothing less than inspiring.
That was Air Force acquisition chief William Roper, in a statement before the US-China Economic and Security Review Commission (April 25, 2019), “Hearing on China in Space: A Strategic Competition.”
The average Air Force award on Pitch Day was about $170K. Clearly these awards are not expected to achieve significant advances. The entire pot of $660 million small business innovation dollars is less than the value of Amazon stock Jeff Bezos sells every year ($1 billion) to fund his space startup Blue Origin.
Roper does make a good point, however, that funding from the government doesn’t come with many of the downsides to private venture capital investments, primarily in the equity stake. The problem is that these companies don’t really have a path to scaling up to capture the “significant” resources at the Air Force’s command. The companies can’t expect that future contracts will be on one page using Other Transactions Authorities.
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