Why Impulse Raised $500M to Move Things in Space | President & COO Eric Romo

Eric Romo, President & COO of Impulse Space, joins Sourcery on the company's manufacturing floor in Redondo Beach to break down the freshly closed $500M Series D co-led by 137 Ventures and BANNER VC that pushes Impulse past $1 billion raised. We get into what the capital actually unlocks (hiring and production, not flashy CapEx), why "space tug" doesn’t cut it for Mira, and how a single successful flight spurred demand from across the industry. Eric explains Impulse's three products — Mira, Helios, Caravan — and makes the case for staged access to GEO against traditional options. He also gets candid: reality on orbital debris cleanup, why Impulse is "closer to a fighter jet than a tugboat," and the hard lesson from his SpaceX days (he was employee #13; CEO Tom Mueller was #1) that made in-housing manufacturing non-negotiable. Eric Romo: https://x.com/_Eric_Romo Molly O’Shea: https://x.com/MollySOShea Sourcery: ⁠https://x.com/sourceryy 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝐋𝐈𝐍𝐊𝐒 YouTube: https://youtu.be/42035XPxgbA 𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒 • Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery • Turing https://turing.com/sourcery—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery • VCX https://fundrise.com/vcx—VCX is the public ticker for private tech, allowing investors of all sizes to invest in venture capital. View The Portfolio at http://GetVCX.com http://getvcx.com • Deel https://www.deel.com/sourcery—Deel is the global people platform that helps startups hire, manage, pay, and equip anyone, anywhere. Trusted by more than 35,000 fast-growing companies, Deel is the people platform that just works, so teams can scale without the chaos. Visit: https://www.deel.com/sourcery • Public http://public.com/sourcery–Investing platform Public just launched Generated Assets https://public.com/generated-asset, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. https://public.com/sourcery • Merge https://merge.dev—The leading provider of customer-facing integrations and agentic tools for frontier LLMs, Fortune 500 organizations, and B2B SaaS companies. Visit https://merge.dev Follow Sourcery for the latest updates! https://www.sourcery.vc https://www.sourcery.vc/ Disclosure Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time. 𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒 (00:00) Eric Romo, President & COO at Impulse Space (00:58) Fueling the next phase with a $500M Series D (04:30) Crossing the $1B funding mark (06:00) The freedom to execute (07:09) Why startups die from indigestion (08:30) Building beyond SpaceX (13:32) How defense became the real opportunity (16:19) Impulse’s product stack: Mira, Helios & Caravan (23:43) The economics of urgency (26:23) "Closer to a fighter jet than a tugboat" (30:40) The new era of space defense (37:33) The SpaceX DNA at Impulse (38:27) The biggest lesson from SpaceX (44:23) Hiring world class engineers (45:38) If not COO, then what? (46:43) The road to first Helios launch

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Molly O'Shea?

  You've just raised a massive Series D. This was a $500 million round. This brings your total funding to over $1.025 billion.

• 0:07Speaker 01

  Yeah, a little over a billion dollars. That just means the bar just got higher for us. This funding will allow us to be just a little bit more forward leaning to have the freedom to execute. We've got our Mira product line, which is now scaling to where we have to build one of those per month. If they had an option to go directly and it was economical, they would take it. So Helios gets them to their same place they want to go, the same day to launch, eight hours later. The middle of that distribution is in the tens of millions of dollars of value for a single flight at Helios. China launches XYZ thing, it's headed towards GEO. The reality is from the ground, we don't know what that thing is. Does it have robot arms? Does it have machine guns? We don't know. The way that you figure out is you actually have to get quite close to it. All of a sudden, the defense market unlocked for us. And that's why you've seen us get a lot of traction in that market.

• 0:58Molly O'Shea?

  Eric Romo, welcome to Sorcery.

• 1:00Speaker 01

  Thank you for having me.

• 1:01Molly O'Shea?

  Thanks for having us here. So where are we today?

• 1:03Speaker 01

  We are in Impulse Space's headquarters in Winado Beach. You're in particular on the manufacturing floor right now. So I think you're going to take a walk around later and get shown around by the one and only Tom Mueller. The manufacturer's floor, but we're here on Manhattan Beach Boulevard. We've got a few buildings here, but you're going to see the dense and intense portion of our factory.

• 1:23Molly O'Shea?

  I want to get into what's sitting behind us right now because this is very cool. But before we do that, huge congratulations. You've just raised a massive Series D. So what happened?

• 1:34Speaker 01

  Yeah, so what happened is that it turns out space is pretty interesting to investors right now. You know, we started out a few years ago, Tom started the company five years ago, really focusing on Tom's excellence in propulsion and then figuring out where can we build a real business around that? Where can we build high-performance space vehicles that move things around quickly or far away? And I think as the company's grown up, we've realized where that really has a lot of traction. And there's a good bit of need for that in the commercial space with our product Helios. So I think I'll see you later. And then in defense with our product Mira and then we hope to have a business around NASA.

• 2:16Speaker 01

  And really in the last couple of years, all of those business segments have have taken off really quickly. We had a number of investors that have been following the company pretty closely through that time. And when they saw sort of the hockey stick start, they thought, okay, now it's the time to go ahead and do a round. In particular, we had the firms that led the round are one through seven ventures and Vanner VC. One through seven has known us for a while. They're relatively small shareholder before this round and and I decided this was the right time to step up. Pretty interesting timing for them because as I like to joke to them and to other other board members, they're not exactly household name yet, but they're kind of about to be.

• 2:57Speaker 01

  They're a very large SpaceX shareholder. I've been investing in that company for a long time and are about to deliver an amazing return to all of their investors. Which I think is going to get a lot of news for them. I think they just actually just a few weeks ago raised another couple of $700 million in new funds as well. In addition to SpaceX, they're big Andrel shareholders and Brex shareholders and so. So they're they're a firm that's been like maybe a little bit below the radar for the last few years, but I think they're now coming out. And so it was exciting to see them essentially decide that we were the next big ones in space. That's a real big endorsement coming from somebody who owns more than 1% of SpaceX.

• 3:35Speaker 01

  And then Banner is a new firm, but we've known the GP there for a while as investor that his prior fund as a shareholder in impulse and so. Again, both of them sort of tracking the company and watching that growth really start and saying, okay, now's the time to to write bigger and bigger checks. And then very fortunately, you know, that happened pretty quickly after we decided we wanted to raise a round and what happened from there is that. Usually in this this process, like my first call after the term sheet is to go out to insiders and say, hey, you know, what do you want to do in this round? It's kind of starting to come together. It's evaluation, etc. And then see how much of the round they they might take up versus we want to fill from outsiders and we're just massively oversubscribed just from insiders.

• 4:17Speaker 01

  Good problem to have. And so that came together really quickly as well. So. It's a, you know, it's a good sized round, but it's one of the quicker ones I think I've ever done, just because there was so much interest in the company.

• 4:30Molly O'Shea?

  So this was a $500 million round. This brings your total funding to over 1.025 billion dollars?

• 4:37Speaker 01

  Yeah, a little over a billion dollars.

• 4:38Molly O'Shea?

  You got the big B.

• 4:39Speaker 01

  Yeah, yeah, there you go. Yeah, yeah. I mean, so, you know, I think some people maybe think that they're putting numbers up on the scoreboard and they should be excited about that. That just means the bar just got higher for us, right? About we've got to return that capital and then some, right? To those shareholders, which means we need to build a really big business. And so it's exciting, obviously, to have that amount of funding to run the business. We had quite a lot of money on the balance sheet even before we raised this round. So there was no kind of forcing function, you know, it wasn't a sense of urgency or anything around it.

• 5:14Speaker 01

  But now we just get to expand the business and hire. I think we've been, I think some folks internally would argue we've been, we've been a little bit cautious in how we've hired. I mean, we're a company's now almost 500 people. That's a lot, obviously. But I think we arguably could have hired even faster than we have in the past, but really wanted to make sure we had the throttle at the right place, where we had enough runway and had enough business. We're kind of matching those things. This funding will allow us to be just a little bit more forward leaning and in the people we hire and how quickly we staff up. A little bit more forward leaning in facilities and capitalizing the business. So I think it's, it's going to help us to have the freedom to execute

• 5:57Speaker 01

  that maybe we were holding ourselves back a little bit before.

• 6:00Molly O'Shea?

  So this unlocks hiring, expansion, what else?

• 6:04Speaker 01

  It's, that's the bulk of it. I mean, people are really the biggest place we spend money and the biggest resource that we need internally. And so this will allow us to continue to hire great people, I think. You know, in the, in the past, we would, you know, really limit ourselves and kind of hold ourselves to the tight budgets, which we'll continue to do, but will budgets be higher. And that meant that really talented people, you know, maybe didn't make the cut, right, to, to get hired. And I think this allows our hiring teams to say, okay, let's go make sure that if it's this is an amazing person that works in the stuff that we do, let's, let's make sure we find room for them. You know, and capital has always been a thing we've invested in. I think, you know, it's, it's an interesting conversation around businesses like ours and just how capital intensive they really are.

• 6:47Speaker 01

  Because I think there's this perception, you know, outside of hard tech, deep tech, whatever you want to call the segment we're in, that they're incredibly capital intensive and you can't imagine how much they're spending on CapEx. But that's, that's not really the case. I mean, you're going to walk around and see stuff, but, and certainly we do buy a lot off auto machines, but people are by far and away the basically expensive a company that's going to continue.

• 7:08Molly O'Shea?

  So what does scale actually mean for Impulse?

• 7:12Speaker 01

  Yeah, being able to simultaneously execute a number of things. So, you know, we are, we've got our Helios program, which is to build effectively a third stage for medium launch vehicles. That's building a rocket stage. You know, it's like, it's roughly the same size as like the second stage of Falcon 1, for example, like as a size of the, the program. That's a big undertaking. We've got our Mira product line, which is now scaling to where we have to build one of those per month at this point. That's a big deal because we both need the engineers to develop it and the production to get it done. And then we've got aspirations on building a number of other vehicles as well. And so being able to simultaneously do multiple things is not easy for a company.

• 7:57Speaker 01

  So scaling for us is really how do we hire great engineers across all of those programs? There's a saying in, in the valley that, you know, startups don't die from starvation, they die from indigestion, right? And I think it's a balance that we always try to find the right place to strike of, hey, should we actually go out and try and execute on this amazing business opportunity? Or should we leave by the wayside? And as I think we've maybe talked about a little before, there's not that many great opportunities in the space business segment. And so when we see a really big one, it's hard for us to turn down.

• 8:30Molly O'Shea?

  The company was started in November 2021. What were the early days of product development like?

• 8:36Speaker 01

  Yeah, so I only got here three years ago. So I don't exactly know what the first couple of years were like. But I know that, you know, Tom left SpaceX. He was there for almost 20 years and I think tried real hard to be retired. And found himself nights and weekends building rocket engines in his garage as he is want to do. And talked to some folks that we all know well. And they said, hey, look, you're doing this anyway. Why don't you have a company around this work? And so he was able to quickly capitalize the company. When you're, when you're, Tom, you're starting a company and you can just kind of raise your hand and people then send checks your way. And that's kind of what happened in the early days of the company. And then as a result of that, starting the company was also able to attract

• 9:22Speaker 01

  a lot of really strong talent quickly. People that he'd worked with in the past who were maybe ready for a new thing. And so this meant that your company immediately is well capitalized with extremely strong technical talent, kind of best in class talent. Then the question is, okay, well, what do we do? And, and where's the real market opportunity? When I got here, the company had been working on the MIRA vehicle for a little while. And it had, MIRA went from not existing to being built and ready to fly in about 14 months. So really, really fast, which is tested at the time and the talent that the team had.

• 9:57Speaker 01

  But when we flew MIRA for that first time, we had this hypothesis of what we thought the business was going to be for MIRA. And there was a hypothesis around the commercial market for orbital transfer vehicles in low earth orbit. Okay, it's kind of space tug market. And I came in and I, with kind of fresh wide eyes, having not been in the space industry for almost 20 years. Said, all right, let's, let me learn about this market a little bit. And what I saw as I dug in is a, is a market where the, the value proposition to the customer kind of existed. So I'll give you a quick pitch. It's like, you, so Rocket Lab has this, this product called Electron. I always forget the names of their rockets. Electron is a small one, okay? And it'll lift a few hundred kilograms to low earth orbit.

• 10:42Speaker 01

  Okay, so 200 kilograms somewhere in LEO.

• 10:46Speaker 01

  SpaceX has this this program called transporter, where they'll they send a big bus of of payloads, a bunch of 200 kilograms at a time, you know, 40 of them or whatever. Uh, and they send them up to low Earth orbit as well. So Rocket Lab will go anywhere in low Earth orbit you want to go. It's not, it's not all one thing. There's a bunch of different ways you can be in low Earth orbit. They'll go anywhere you want to go, kind of anytime you want to go there. Um, SpaceX, you're taking the bus. So you go on the bus schedule and you go to the bus stop. Alright, so, uh, but the price for an electron for those 200 kilograms is way higher. It's like $8 million than the price for that equivalent transporter slot. It's like $2 million, maybe something like that. Um, so there's a big spread between, you know, eight and two.

• 11:29Speaker 01

  But in theory, you're paying for, I get to go exactly where I want to go. And I get to go exactly when I want to go there. Okay, so the pitch for orbital transfer vehicles at that time in the commercial market was, with that, you know, difference between eight and two, can I add an orbital transfer vehicle? Can I add the launch costs to send that up as well? And still save the customer money on that eight. Right, and the answer when we looked at the economics was, yeah, actually you can maybe save like a million, maybe a little bit more than a million dollars for that customer. Maybe you end up charging them seven or something all in instead of eight. A million dollars, pretty meaningful. Um, the challenge with that market is that, uh, number one is not that big. You know, Rocket Lab does something like 30 launches a year. And you're basically pitching that you're going to steal share from them, right? So how many are you really going to steal?

• 12:15Speaker 01

  Problem number two is that in order to make that math work there, the economics for the orbital transfer vehicle, the margins are pretty skinny. So like a 20% gross margin, something like that. It's not great in in hardware. And the killer was, uh, in order to serve those customers well, I needed to go out and buy a bunch of launches from SpaceX. I gotta, if I need to do 20 of those a year, I gotta buy 20 launches a year, which means I need two years worth of launches. I need 40 launches, which means I need, I don't know, like 50, 70 million dollars tied up in launch costs for a company that had only raised 30 million dollars at the time. Right, so it's just, so when you stack those things together, you know, dubious economics, small market and, uh, uh, bad working capital dynamics, it just didn't really pencil. So here we are, we just launched this first Mira. And we thought that had this commercial market.

• 13:00Speaker 01

  We kind of realizing, oh, actually that market's DOA. Uh, so what do we do? So Tom and I have this conversation and he said, well, you know, maybe Mira is our Falcon 1. You know Falcon 1 SpaceX was the thing launched a few times to get to the bigger one. We launched Mira once or twice. We show we can build a spacecraft. We show we can operate on orbit. And then we'll move on to the bigger thing, Helios. Because Helios, the unit economics work and capital dynamics, all that's really good. Market's not that big, but that's a different discussion. But anyway, so we move on to the bigger thing that we know kind of works. So we launched Mira, first mission, you know, kind of by the skin of our teeth goes well. And all of a sudden, our conversations with Space Force kind of shifted in tenor really quickly.

• 13:43Speaker 01

  It went from, hey, there's all these sorts of things, maybe we can work on together to, we now know exactly what we can work on together with you and we want to talk about it more. And so we went from not knowing if we had a space defense business, not knowing what it could be, to laser focused on kind of this high thrust, high delta V business for Space Force. And they kind of, to some extent, led us by the hand to say, here, here's where we think the market could be for vehicles like Mira. Here's how we think you need to change it, because it went from a first version of Mira to a second version of Mira to get that market. And that's a big thing that changed was all of a sudden the defense market unlocked for us on the Mira side. And that's gone on to now we're increasingly a trusted partner with them.

• 14:27Speaker 01

  And so it's something that we can work on more and more stuff with Space Force. So this is, this is kind of the big shift from the initial founding of the company was, hey, we think maybe there's this, this commercial angle to now we not only have a commercial angle with Helios, but also have this defense signal with, with Mira and eventual cousins of Mira. And then we, we really hope to be a big part of NASA as well.

• 14:49Molly O'Shea?

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• 16:19Molly O'Shea?

  So I know we talked about this in our New York Stock Exchange Space Summit Hot Takes. The breakdown of the products, Mira, Helios, and Caravan, and then the customer sets within them.

• 16:31Speaker 01

  Yep.

• 16:31Molly O'Shea?

  But to reiterate those, you went through it a bit. I'd love for you to break down where they fit in the market a little bit more and how you're helping your customers out.

• 16:41Speaker 01

  Yeah, let's start with with commercial. And Helios and Caravan are our products for the commercial market. Right now, commercial space is largely comms. And comms is kind of divided in a really blunt way, like between Starlink with operates and low Earth orbit. And traditional legacy comms operators operate in geosign or so. So and GEO is, for for reference, is about 100 times further away than LEO. Really far away, really hard to get to. But that's where, you know, the SES as one of our customers, Astronis is another of our customers. That's where they operate their spacecraft is out in GEO. You get to GEO, you get to park over one spot on Earth. You get to park over LA and I just stay there. Whereas in LEO, if you want to serve LA, you need, you know, hundreds, if not thousands,

• 17:25Speaker 01

  because your spacecraft are orbiting all the time. So GEO is super far away, hard to get there. The way a typical GEO ComSat operator will get there right now is they'll launch on a Falcon 9, or presumably another launch vehicle, but basically on Falcon 9. They'll launch to a transfer orbit, so it's what they call GTR, geostationary transfer orbit. And they'll take somewhere between six and 10 months to finally reach their destination. So they launch on day one, and then on day, I don't know, whatever it is, 300 or something, they finally get to where they're trying to go. And during that time, between, you know, day one and day 300, they don't make any money. They're not actually revenue producing at that point, they're on service.

• 18:05Speaker 01

  They burn something like four to six million dollars worth of like expensive gas to do that raise to get there. They go through these intense radiation belts where they get the spacecraft gets pounded by radiation over and over again, which means they need to design the spacecraft to overcome that.

• 18:23Speaker 01

  And they have to operate on the ground, they have to watch the spacecraft, that costs a bunch of money to do the operations around that orbit raise. So they spend, you know, in hard costs, they spend millions of dollars, and then in their time, they spend probably tens of billions of dollars, depending on the spacecraft. So the alternative to this is you go direct to GEO. And so the main spacecraft, the main launch vehicle that goes direct to GEO right now is Falcon Heavy. So Falcon Heavy will launch you, get to GEO the same day you launch, eight hours later, something like that. But the thing is Falcon Heavy is extremely expensive.

• 18:56Speaker 01

  In part because it's three Falcon 9s strapped together. And it's part because SpaceX has been clear they don't, would prefer kind of not to fly that vehicle. And it makes sense because every time they fly one of those, they have to shut down the pad for longer than they would for a Falcon 9. So when you look at how much time does it take to launch one Falcon Heavy, and how many Falcon 9s they could have launched during that time, it's actually economically better for them to launch Falcon 9s. But they have to launch Falcon Heavies because they've got big contracts with the Space Force, our government really needs it, NASA really needs it. But in the commercial market, those launches don't happen very often. There was just one a month ago when this comes out. But they there haven't been many in the last two years. So, commercial customers basically don't go direct.

• 19:41Speaker 01

  They only go through through the transfer orbit. That transfer orbit takes a super long amount of time. If they had an option to go directly and it was economical, they would take it. And that's our product Helios. So Helios gets them to their same same place they want to go, the same day to launch, eight hours later. And it's cheaper than a Falcon Heavy, more expensive than Falcon 9, obviously, because they need to play for pay for that and the Helios. But the economics tend to work out real well for them. And that's why you've seen us get a lot of traction in that market. In addition to that, what a big trend that's happening in the commercial market right now for GEO is moving to smaller and smaller spacecraft. So here, Astronis is a really good example of this, or kind of bellwether of this change.

• 20:21Speaker 01

  Where it used to be that in GEO, you have these monolithic mega spacecraft, or you know, four tons and up. Costs hundreds and hundreds of millions of dollars. What's interesting is that the trend that you saw in LEO, where LEO spacecraft also used to be really expensive. And then you had folks like Planet Labs and then eventually Starlink really iterate on taking commercial components and making spacecraft smaller and kind of the shoebox satellite type thing. That never happened in GEO until now. And so what's happening is you have the the miniaturization is the wrong word, but because they're still way like 2,200 pounds or something, they're massive things, but they're way smaller than they ever used to be before.

• 21:02Speaker 01

  And so you're now finally seeing this almost, you know, consumer electronicsation of GEO spacecraft. And Astronis is one of the ones leading the charge, and there are a few more. The problem is that those spacecraft don't have really good ways to get to GEO. So again, back to how do they typically go? They go through that transfer orbit. Well, in order to go through the transfer orbit, you kind of need a lot of power to drive your electric propulsion system. And those smaller spacecraft have a hard time kind of making the math work around how much power they have, how much electric propulsion they can use to raise the orbit. So they actually tend to use to take longer, like on the high end, that range of the orbital transfer. And then for getting directly to GEO, they basically have no options.

• 21:41Speaker 01

  There's been one example in the last two and a half or three years of a way for small spacecraft to hitch a ride to get direct access to GEO. So Caravan serves this niche in the market where there's a lot more of these small spacecraft that have no good options to get to GEO. We can provide them a good option by essentially taking a number of them together. And it might be, you know, four, five, seven of them together on the same ride. It's kind of, you know, SpaceX transporter but for GEO is sort of the way to think about it. And this, as it turns out, has been a really big hit in the market. More demand than we expected in that marketplace. And so we have a couple of flights in 2028 that we'll do around this offering.

• 22:22Speaker 01

  And what's fun about this is that both Helios by itself and then Caravan, as people understand the capacity here, they can change the designs of their spacecraft so that they can assume that this is going to be available. So for example, on those bigger spacecraft, they can say, hey, we can drop the electric propulsion down and make it smaller. We can get rid of some of that shielding for the radiation that they need to go through. They can make the tanks smaller. And that by itself actually could come close to paying for the ride on Helios. Just the changes that they made in spacecraft. And by the same token, if folks assume that Caravan is in the market, then they can assume that they can get rides for smaller spacecraft and they can go smaller and smaller to GEO.

• 23:03Speaker 01

  So we didn't expect sort of that impact in the market to happen for a little while. Because, you know, we haven't flown Helios yet. We'll fly at the beginning of next year. But we're hearing from customers that they're excited about what it can bring to them. So we're hopeful that this helps the market. Because as I think alluded to in our conversation, the GEO concept market, you just look at the data, it's kind of flat to down in the last 10 years. It's not grown heavily. I think it's something that we would like it obviously to grow. And if we can improve the economics of the people that operate there, then it should grow. You know, supply, demand, and plasticity. And we're hopeful to see that in the next few years.

• 23:43Molly O'Shea?

  If you can talk about this, could you walk through the business model costing a bit, even if it's frameworks? And then how customers measure value and success?

• 23:51Speaker 01

  Yeah, absolutely. And so when we're talking about getting to GEO, when you look at those components of that time, how much is the time worth to them? And then how much are the hard costs worth to them? The fuel, the radiation shielding, et cetera. Time tends to be the biggest one there for sure. And when we looked at that time, it's a pretty wide distribution. Because you have some customers in GEO where they have, for example, they might have a contract with a ground operator, a local telco or something, where they have to provide that, the bits down to that local telco. And if they don't do it by a certain date, then they have huge penalties or they lose the contract.

• 24:33Speaker 01

  And the penalties or the delay fees or whatever it might be, they might be hundreds of millions of dollars potentially in that contract. Whereas if you just looked at the revenue that they would get through that time, because we're basically pulling that revenue stream forward, it might be tens of millions of dollars. So we look at the different customers, we think kind of the middle of that distribution is in the, you know, is in the tens, maybe middle tens of millions of dollars of value of that time per a single flight of Helios. And then the hard costs around fuel, et cetera, et cetera, might stack up to something like five or 10 million dollars in total. So there's a pretty good amount of value there, but the interesting thing is, and you know, I don't know how much of this is still on the website, but when you look at like

• 25:18Speaker 01

  the difference between a Falcon 9 and a Falcon Heavy, it's like 70, 80 million dollars, something like that historically. And so that probably is bigger than the value that the average customer would get there. And again, there's some customers way on the end of the bell curve that it would still would pay for them to use Falcon Heavy. Whereas we look at our pricing and we don't talk about pricing publicly, but it's lower than that. Right. And so the typical customer can quickly do the math basically in their head and say, okay, my time's worth $50 million, my hard cost is worth another $7 million. Therefore, here's the price. Okay, cool. I want to do that. And it's a really straightforward sort of value proposition to that end customer.

• 25:58Speaker 01

  Contractually, it's provided as a service. So it actually looks an awful lot like a launch contract for these customers. You know, we need to ride on a Falcon 9. So sometimes like in the case of Caravan, we buy the Falcon 9. We have a free launch agreement with SpaceX. And some of these rides that customer buys the Falcon 9 and we tack Helios on as part of the payload. But we're a sort of end to end pair.

• 26:23Molly O'Shea?

  We're in Southern California, specifically LA. And there's a ton of space companies here now. So what is the competitive market look like? And could you walk through different kinds of sets of companies? Especially, I know you don't like this word, but could you walk through what a tug is and define that? And how you're not a tug?

• 26:43Speaker 01

  Yeah, I think people, people thought that there was this market for this tugboat service between parts of Leo. And they thought that that was a thing like if you, I missed the whole SPAC thing. I don't know if you're around during the SPAC stuff. But, but I kind of got back into space like just after all those kind of stocks tanks. And it was kind of like, I don't know, going to a frat party like, but, but like seven o'clock in the morning. There was like a bunch of half drunk silo cups around and, and there's a bunch of people kind of laying on the floor. It's like, wow, I missed a really good party here and now I maybe have to clean up. I'm not sure. But, uh, so I, so I, so I missed all this, but I gather that in this back nonsense, there was sort of this big picture around how we're going to just be moving things around Leo all the time.

• 27:28Speaker 01

  We're going to be picking them up from one spot and dropping them off to another spot. And we're going to be, you know, going up on transporters and tugging them around. And, um, uh, just generally that market has not manifested at all. There, there's been almost no examples of this actually getting transactions actually completed in the market. For this kind of Leo. Go to Leo, move things around, you know, people throw in that in that bucket like orbital debris remediation, right? Of like, hey, we're going to clean up space junk. So I've got some feelings on what we're talking about. Oh, wow. Things like, yeah, it's a scam, I think largely. So, look, orbital remediation could be a problem one day. Could be. It is not currently a problem. And I think there are, there are studies you can point to on this around like,

• 28:13Speaker 01

  what's the probability of collision and what chance could that cause? How, if there was a collision, how much economic value would be removed? There's like a long tail black swan event possibility around orbital space debris. But you, but people show these really misleading graphics around low Earth orbit where they show like, here's Earth. And then here's, oh my God, look at all that junk around Earth. It's so congested. It's crazy. It's all gonna blow up and crash into each other. The reality is if you showed that at scale, you wouldn't even see the satellites. Because they're all so tiny. You're talking about, you know, thousands and now maybe some tens of thousands of objects

• 28:52Speaker 01

  that are like the size of mini fridges, a lot of these. And yes, like if we put data centers there, like maybe that starts to become a bigger problem. But right now, today, there's basically no economic value in helping solve that problem. There have been a bunch of companies, however, who have wanted to prove to investors that they are doing social good work. And so they've said like, let me show you that I'm going to help clean up this huge problem. And so I've made a big deal out of it. The reality is, I think, when you, when you really look at the dollars and cents of it, you know, if you could wave a wand tomorrow and say, okay, I'm gonna, I'm gonna clean up the different problem, how much would that be worth? It's like tens of millions of dollars. There's this good report that I can never find every time I remember it, but it's, I think NASA did it like five years ago or something. And it's just the economic value of cleaning up space debris is not that high. But anyway, this was one of the things

• 29:38Speaker 01

  in that category of like, we're gonna move stuff around, we're gonna be a tugboat.

• 29:43Speaker 01

  Satellite repositioning is another one of like, hey, it's in the wrong spot. So bring it and put it somewhere else. Nobody does. There's not a thing that happens. There are some companies that are working on life extension. That's useful in GEO where satellites are really expensive. And so therefore we should extend their life a little bit. Never going to be useful in LEO. It's not a LEO, we just replace it. It's easy to get there now. And then there's the kind of Rocket Lab SpaceX arbitrage case that we talked about earlier. So these were all in like the tugboat category. The practical reality is that the product market fit for MIRA for a high thrust, high delta V space vehicle is it's closer to a fighter jet than a tugboat. This is a thing that the, what Space Force wants to do with this is move really fast at some foreign actor spacecraft and characterize it. That is not a tugboat mission.

• 30:28Speaker 01

  That, that maybe it's a speedboat. I don't know, but I don't like the boat analogies. Anyway, it's, it's more like, it's more like a fighter jet. And I think that's, uh, couldn't be further from tugboats.

• 30:40Molly O'Shea?

  At the, at front summit, you gave a really good keynote on the national security advantage of being able to reposition in space. So I'd love for you to go deeper into that. And especially as competition between US and our adversaries just increases more. And you know, we can get into Golden Dome too, but, but could you just explain that a little bit further of the current state of that? And why it's been so important?

• 31:03Speaker 01

  It's probably useful to start by just framing up what space defense is historically.

• 31:10Speaker 01

  For, for, for most of the, the existence of Space Force and our, our nation's opportunities in space. It's, it's been assets in space that help the warfighter on the ground.

• 31:20Speaker 01

  A really good example of this is GPS constellation. So GPS provides, you know, position navigation and timing to warfighters. It's how the air force drops precision munitions and things like that. It's also become a social good for, for the world. It's a amazing thing for, uh, for each of us. I think I've seen estimates where it's something like a trillion dollars in economic value every year. Really rely on, on GPS.

• 31:50Speaker 01

  But so GPS is, is like the one canonical example of these assets in space that provide benefits to the warfighter on the ground. But we also have things like, uh, the missile warning tracking layer. So anybody shoots off an ICBM somewhere, we find out. Things like secure communication. So how do you tell somebody else that somebody shot an ICBM? So historically, we've invested, you know, tens, if not hundreds of billions of dollars in these assets in space, light value on the ground. They've traditionally mostly been in medium Earth orbit and geostationary orbits and not really in LEO. The thing that's happened recently is I think we've been able to rely on the fact that we didn't really need to defend those assets.

• 32:33Speaker 01

  So Russia was the only other country that had consistent access to space and we had an understanding with them. Don't come near our stuff and we won't come near your stuff. That understanding may be breaking down, depending on what you read in the public news. And then China now has consistent access to space and has a massive program to essentially duplicate our launch capacity. They've got, you know, five different companies trying to be SpaceX over there that they're throwing lots and lots of money at. And it's not just for commercial purposes, it's for a lot for defense. So now, and we, I think Space Force knew this was coming when it got started, but there's this real need to actually defend those assets for the first time. And this is part of why you see Space Force's budget going from $17 billion a few years

• 33:17Speaker 01

  ago to now the request is for $71 billion. And how you defend those assets depends on where they are. So right now, a lot of action is deploying new assets in low Earth orbit to where Starlink and Starshield are. And the strategy for defending the assets in LEO is proliferation. So you have hundreds, if not thousands of targets for the enemy to need to take out if they're going to cripple your capacity. And so you solve defending it by just having more things for them to, they can't take them out, out all of them, so just put more. The problem is that when you look at the, the volume of LEO compared to the volume between LEO and GEO, MEO and GEO are a million times bigger, literally a million times bigger than, than LEO.

• 34:01Speaker 01

  So if you're going to have that same strategy of proliferation of, hey, there's always an asset somewhere around here, you'd need a million times more assets, which is just impractical. So instead, you solve the defensive problem in MEO and GEO with spacecraft that can move really rapidly from one part of that orbit to another. Okay, and so, near our spacecraft. Is really good at this, going from one part of GEO to another. Because it's really, really big. And so in order to cover all that ground, you need to move fast. And this is, you still have those same assets that provide value to the warfighters. But now you need to patrols to vend them. You need bodyguard satellites that stick around them.

• 34:40Speaker 01

  And what those missions typically start with is characterization of understanding what is that foreign actor asset that's out there?

• 34:49Speaker 01

  You know, because space is so big, you know, you'll see these pictures of assets from the ground. Like a telescope will take a picture of something in space. And the picture of the thing in in LEO will be this kind of like blurry thing that you can sort of mix out as a box. And maybe those are solar panels. And the picture of the thing in GEO is literally like one pixel. Is it not? You can just don't, I have no idea what the heck that thing is. And so when you see in the news, you'll see, you know, China launches XYZ thing. It's headed towards GEO. The reality is from the ground, we don't know what that thing is. Like, does it have robot arms? Does it have machine guns? Like, we don't know. And so the way that you figure out what is that thing? And what should I do about it? Is you actually have to get quite close to it. And in a kind of contested environment, you probably want to get close to it pretty quickly.

• 35:32Speaker 01

  And so you want to move very rapidly from one part of GEO to another. So this is the part of it we work on. And Space Force is investing across the whole gamut, right? They're investing in proliferating and having more and more stuff going on in LEO. And then they're investing in these defensive capabilities in MEO and GEO.

• 35:48Molly O'Shea?

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• 36:33Molly O'Shea?

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• 37:17Molly O'Shea?

  Founders scale faster on Deal. Set up payroll for any country in minutes. Hire anyone, anywhere. Get visas handled fast and get back to building. Visit deal.com/sorcery. That's D E E L dot com slash sorcery. So I want to talk more about the product development cycle. You were the 13th employee at SpaceX. Tom Mueller was the second. So I would assume, this might be crazy, that there might be some SpaceX DNA within the company.

• 37:46Speaker 01

  A little. Tom was officially in the payroll system the first.

• 37:51Molly O'Shea?

  Really?

• 37:52Speaker 01

  Employee 001.

• 37:53Molly O'Shea?

  So Elon's not even an employee?

• 37:55Speaker 01

  I don't know what the, I don't know how that works, but it's, yeah, in the payroll system. I mean, I think, you know, he found Tom and I think that was really the impetus for saying, okay, I actually think I could make a company around this. Because, you know, the engines are the thing that failed, they're the thing that's the hardest to build, they're the thing that is always the critical path in the schedule. And so I think without Tom, I don't think that company goes in the first days. And so I think, I don't know, that was part of the calculus for making an employee one of the payroll system or whatever, but that's officially the case.

• 38:27Molly O'Shea?

  So what was the hardest lesson that you learned at SpaceX in the very early days that has kept with you through this time and through the build of Impulse?

• 38:36Speaker 01

  One of the really, really biggest things that I think we learned there, that I watched happen, that is definitely part of our DNA now, is really about the iteration speed or the reduction of cycle time for development. So how quickly can you learn about this thing you're trying to build? And so I was there in the early days and I was an analyst on the propulsion team. So what that means is that I'm not real good at hardware or using machines or building anything. I kind of spend all my time in simulation land and Excel spreadsheets.

• 39:12Speaker 01

  Which is funny because Tom is like super hands on, right? And when I first met him, he asked me all these questions about, you know, when's the last time you used a lathe and a drill press? And how do you spec tubing on this thing? And I'm just like, dude, I have no idea. Like I excel real good. And like, if you want that, I'm your guy. And so I was pretty sure he was not going to hire me, but then luckily he did. But so I was an analyst on the team, but the team was so small that I basically just had to like stay attached to Tom no matter where he went. And it was right around the time when I joined in early 2003, when the team started going down to the test site in McGregor in Texas for the first time.

• 39:52Speaker 01

  And at the time, the team in McGregor, there was one full-time employee there. And the rest of us would fly in and spend 10 days there and, you know, work for 10 days. And then we'd come back to LA for four days and we'd do that over and over and over again. And I did that for like nine, 12 months, something like that. I did that for years until the team finally stood up there and was built out. And what we were doing is we would bring hardware there to test. So like, hey, we've got this new version of the engine. Build it up there, we're going to test it there because testing it, you know, in LA, these things blow up. So, you know, you can't test them around here.

• 40:29Speaker 01

  And, you know, we would go down there and we'd bring our new hardware. And then we'd get everybody to, you know, McGregor, which is, you know, a little west of Waco, give you an idea of kind of where it is in the middle of Texas. And we would have brought the wrong part.

• 40:44Molly O'Shea?

  Oh no.

• 40:45Speaker 01

  And it's like, well, I guess we're going home. And so sometimes we would, right? We'd get back and get on a jet and fly back there. At that time at SpaceX, the big philosophy is funny. I took away as a, you know, 20 whatever year old kid. Like I had two things that I remembered about like a strategy of SpaceX. And one was we're going to not rely on the government as a customer. We'd do all commercial, which is amusing to me because a few years later NASA became the anchor customer. Basically made the company what it is today. And then number two was we're going to outsource all manufacturing because there's such an amazing supply base here in LA. That why would we make stuff internally when we could just rely on all these defenders? Or these vendors?

• 41:29Speaker 01

  Which of course amusing because they're, you know, canonically so integrated now. So, but at the time we were outsourcing basically everything, right? So we did, we had a little tiny machine shop, but, but basically anytime we would need some new part built. It was okay, send the drawing to the vendor and get it built. And that would mean that, you know, you need some new piece to the engine built. Okay, well send in the drawing and maybe two weeks later, if you're lucky, you get this thing back. Oh, by the way, you got the wrong one and you flew to Texas to test it. Get on back and wait two weeks to test that thing because you gotta go, go fix it. So we got through the cycle where we had a couple of vendors that we were really reliant on that were doing well for us.

• 42:08Speaker 01

  Okay. And one of the ones was, you know, always the quickest and they're pretty cost effective and they're very communicative. So they were okay, we're really relying on this one. They're the ones that are helping us move fast. And I remember sitting in the bunker in Texas and underground, Tom and the team. And we get a call from that vendor and it's like, hey, sorry, but we're shutting down. We're closing our doors. We can no longer, I don't know what the heck happened, but you know, some internal dispute or whatever. I don't know. And they're shutting down. So we're like, we're screwed. You know, this is our number one vendor. This is the vendor that's helping us move quickly. Right? And we're sitting around having a conversation and we realized like, oh, we gotta go hire as many people from that vendor as we can. And we gotta build up the internal capacity because that's

• 42:53Speaker 01

  Wouldn't help us iterate. It's all stuff that seems like super obvious now, right? To most, you know, hard tech companies, you walk around, they have a bunch of machine shops and Lays and 3D printers and all that sort of thing. But 2003, that was not so obvious at the time. And now it's so core to what we do here, that if you want to move quickly, you absolutely must in-source a lot of the development. You must build your own components. You must take as much internally as you can, which is not easy to do. These spacecraft that we build are really complicated. They have a lot of components. And so there is a, it's not the norm to build all this stuff in-house. It's the norm from the primes to integrate from, from other suppliers. They very proudly proclaim like, hey, we have suppliers in 50 different states, right?

• 43:38Speaker 01

  The reality is that, that, that those 50 different suppliers in 50 different states on their spacecraft create a ton of risk in their supply chain. And when they're in the development stage, where they're trying to build something new, it means that they're super slow. Because they have to wait two weeks for that next component to come back.

• 43:55Speaker 01

  And there are companies that are startups that it's hard to hire the level of technical talent that we have. And when you're trying to do something that has a broad range of technical competencies needed, you got to hire smart people across all those ranges, and that's really challenging to do. Having Tom be a founder, the founding team that we have here, I think, really helps us to bring in that talent and helped us to be able to do this. Whereas I think other companies are kind of struggling at sometimes.

• 44:23Molly O'Shea?

  Okay, as we wrap up, I'll have some quicker questions, but you're going to be hiring a bunch.

• 44:29Speaker 01

  Yeah.

• 44:29Molly O'Shea?

  What roles are you hiring out for?

• 44:31Speaker 01

  Yeah, almost all of it is technical talent. It's either people who are going to be working in the machine shop or in the integration facility building spacecraft, or engineers who are helping design those components, or engineers who are building test setups. I, I think when we look at budgeting for the company, it's typically, you know, 85 to 90% is those people. And the rest is kind of overhead like me. But, you know, we really want to continue to keep being a, focus on being a technical company. And I think what's a little different is that we tend to hire, we have something which you could talk to Tom about. If you wanted, really around this responsible engineering mindset. So, you know, who is the person that's ultimately accountable for the success of this part? Or this vehicle or this process?

• 45:14Speaker 01

  And we want people to be that single point of accountability. Whereas other companies takes more of a this systems approach where it's kind of diffused throughout the organization. It's really important when people come in and say, you are going to own this. Like you're going to be the owner of this thing. And I think that's really empowering for people to come in here and we need 200 more owners of important stuff.

• 45:37Molly O'Shea?

  If you weren't president and COO, what role would you want here? Pick any role.

• 45:42Speaker 01

  Oh, my gosh. Well, they don't want me in the prop team anymore. The propulsion team is like so far light years advanced from where I was 20 years ago. It's crazy. Like I look at the work that they're doing and I don't know how they do that. And I look at the resumes of some of the people that we bring in and it's like, oh, my God. Like I've never gone here for that job. I mean, I think I invariably spend a bunch of time selling stuff in the company. So that's a big part of what I do. And again, our sales team is better than I am at that. So luckily they don't need me too much for it.

• 46:16Speaker 01

  What's the most fun job here? Trying to think. I, you know, I was always a little, I'll be honest, I was always a little jealous of the folks who are really good at testing stuff. Like when I would go with Tom to the middle of the desert and in Texas and I would sit in the bunker and play with my spreadsheets all day. And the guys were out there, you know, blowing stuff up. That was always seemed like a lot of fun and I always wished that I had spent, I'd been better at that. And so I think probably somewhere in the development of test side.

• 46:44Molly O'Shea?

  One of our sponsors is Brex and they're all about performance. So I'll ask this quickly, but what are the biggest milestones that you're looking forward to over the next year?

• 46:54Speaker 01

  We've got to do an awful lot of development on Helios. We're testing that engine a lot. We've fired it hundreds of times. We need to keep doing that. We're about to bring the Helios tank, second tank out to the desert, set up the vertical test stand there. It's going to be really exciting. Start testing on the vertical test stand. We've got to continue to produce mirrors. We've got contracts we've announced and others that we have not where we need to build a lot of these over the next few months.

• 47:19Speaker 01

  And then we're going to continue to develop some of the other engines that we've talked about, like the Rigel engine that we announced. That's for a wide range of programs. So lots and lots of development on complicated spacecraft.

• 47:31Molly O'Shea?

  Amazing. Well, thank you so much, Eric.

• 47:33Speaker 01

  Thank you, Robyn.

• 47:33Molly O'Shea?

  Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once-a-week top deals and tech headlines email, and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.