Close Encounter with an Investor

8 03 2010

February 7, 2010 3:35:46 PM PST

Willem – Jan Schutte, a Dutch angel investor in the renewable energy sector contacts me about a potential sponsorship for Prometheus Fusion Perfection having found the project on kickstarter. I provide my resume and answer questions about the competing technologies and patents.

February 10, 2010 9:22:50 AM PST

I meet Willem in person at the Sheraton in Manhattan. This was a fun meeting. He was clearly interested in the fusion space and to my surprise was very excited about the open source aspect of our project. I spoke of the huge social and financial rewards promised by the reactor. I outlined my vision for the project and answered questions. I explained how the project would benefit from small or intermediate investment presently, but ultimately would require a very large investment to enter commercialization. I left this meeting with the sense that an investment of some kind was likely.

February 19, 2010 9:02:59 AM PST

I received this email from Willem’s technical analyst Maarten Dieleman:

Hi Mark,
I am mailing you on behalf of Willem-Jan Schutte who you met last week. I have an Applied Physics background and am now working for Willem as his technical analyst. My knowledge on nuclear physics is only basic, but the idea of nuclear fusion is not unfamiliar to me. After reading some articles and watching the youtube video of the late Dr. Bussard, I have some questions concerning your project.
According to the site of EMC2, the company Bussard worked for, they estimate to produce the first full-scale 100MW fusion reactor in about 5 years if enough funding can be found ($~200M). How do you see the development of your project (time, cost, size)?
You want to build a open-source Bussard Polywell Fusion Reactor. As you know, EMC2 is funded by the US Navy which put an publication embargo in place. According to Bussard the company holds all important patents. So in the case you do built a working reactor are you allowed to? And most importantly if the project is open-source, how do you plan to make money with it and within what time span?
Concerning your current situation, you plan to raise $3000,- via Kickstarter for 3 months of research and equipement. However in your email to Willem you are talking about $100k. What do you plan to do with these funds?
In summary could you give a more clear picture of the expected development of your project concerning the funds and time needed as well as expected earnings?
Best Regards,
Maarten Dieleman

February 23, 2010 1:01:37 PM PST

So this email is really asking the big questions. These are questions I’ve been thinking about myself since I started. I have an evolving plan in my head, but I’ve never really typed it out. At this point I contacted M. Simon to help me refine and articulate the vision. M. Simon put me in touch with Physicist Mike R. With their help I put together this response:

Hi Maarten -

Here are my responses to your questions.

On Feb 19, 2010, at 12:02 PM, Maarten Dieleman wrote:

Hi Mark,
I am mailing you on behalf of Willem-Jan Schutte who you met last week. I have an Applied Physics background and am now working for Willem as his technical analyst. My knowledge on nuclear physics is only basic, but the idea of nuclear fusion is not unfamiliar to me. After reading some articles and watching the youtube video of the late Dr. Bussard, I have some questions concerning your project.

According to the site of EMC2, the company Bussard worked for, they estimate to produce the first full-scale 100MW fusion reactor in about 5 years if enough funding can be found ($~200M). How do you see the development of your project (time, cost, size)?

This endeavor demands developing the Bussard reactor technology past the point of break-even fusion, a history-making feat. This plan is based largely on the path outlined by Dr. Bussard in his Google tech talk ( http://bit.ly/d09bi0 ) and the WB-6 report (attached). The major deviation from Bussard’s plan is the inclusion of a intermediate sized test reactor focusing on superconducting coils and p-11B fuel. Full realization of a break-even reactor will require $200M+. Full commercialization will require another ~$200M. Successful development and commercialization will lead to net income on the order of $100B/year.

Year 1: Tackle small-scale research. < $1M
Year 2: Build a sub-break-even superconducting reactor running p–11B continuously with a single cell of direct energy conversion. $11M
Year 3: Build-out of break-even reactor. $100M
Year 4: Build-out and operation of break-even reactor. $100M
Year 5: Begin commercialization. $200M
Year 6: IPO

***
YEAR 1: SMALL-SCALE RESEARCH

• Superconducting coils
Superconducting coils are necessary to avoid losses from the ohmic heating of copper coils. Superconducting coils require a smaller volume for a given magnet strength which will result in a smaller reactor. Most importantly, superconducting coils open up the possibility of a continuous, running reactor. To date, no one has built a superconducting Bussard reactor.

• Continuous operation
A fully functional Bussard reactor will need to run continuously. To date, the Bussard reactor has only been run in millisecond pulses. Superconducting coils are a big step towards continuous operation.

• Liquid cooling
A continuous running reactor will require active cooling of the magrid to remove heat from ion bombardment and current flowing into the grid.

• p–11B fuel
The full promise of the Bussard reactor is its ability to burn proton Boron11, an aneutronic reaction that works with direct energy conversion. EMC2 is working on this now.

http://en.wikipedia.org/wiki/Aneutronic_fusion

• Direct energy conversion_
The p–11B reaction allows for efficient direct energy conversion into DC electric. We will build and test a “venetian blind” energy capture device outlined in this paper.

http://www.askmar.com/Fusion_files/Venetian%20Blind.pdf

• Cusp losses
The connectors between the toroidal magnets are a remaining source of electron losses.

• POPS research
Periodically oscillating plasma sphere is a technique that may amplify fusion.

http://fti.neep.wisc.edu/static/TALKS/12Oct1100yonghoki.ppt

• Neutron shielding for deuterium-deuterium fuel
Fast neutrons from deuterium-deuterium fuel will damage superconducting coils unless protected.

• Software
Develop parametric software tool-chain to produce mechanical blueprints, thermal models, magnetic force models, tensile strength models, electrical properties models, etc.

• Master instrumentation
Photometry, interference filters, optical light spectrometers, spectrum analyzers, residual gas analyzers, Langmuir probes, Gaussmeters, fiber-optic isolation of instruments floating at high potential.

• Dodecahedral magrid
Bussard claims better confinement with a truncated dodecahedral magrid. Nobody has built this yet.

***
YEAR 2: INTERMEDIATE REACTOR
Build intermediate sized superconducting reactor running p–11B continuously with a single cell of direct energy conversion: $11M

Three Tesla superconducting magnets with a 1m bore. 100 KV @ 25 A power supply. Vacuum chamber, two to three meters on a side.

This will be a fully realized reactor at a fraction of break-even size. The direct energy conversion system will consist of identical conversion units arrayed around the reactor. We will build and test a single conversion unit that will produce usable current. The output from this single test unit will be used to extrapolate the output with the full array of conversion units. This machine will require radiation shielding and a larger facility with an overhead gantry.

Develop schematics for break-even reactor. Develop relationships with key subcontractors.

***
YEAR 3 and 4: BREAK-EVEN REACTOR
Build-out and operation of break-even reactor: $100M

A break-even reactor will require a three meter diameter magrid for deuterium-deuterium reaction (four meter for p-11B), which in turn will require a nine meter diameter vacuum enclosure (12 meter for p-11B). Beyond this, there is shielding and support machinery like vacuum pumps and power supplies.

Bussard cites power scaling of radius^7. This is based on the composition of B-field^4 * radius^3. Cost scales radius^3.

This stage of the project will require a large test facility away from people. This is a large-scale engineering and construction project. It will require an array of subcontractors, specialist and integration oversight.

***
YEAR 5: COMMERCIALIZATION
$200M

Package the reactor technology into a safe and easy to use commercial product. Hire experienced CEO and COO to sell the reactor or the electricity it produces.

You want to build a open-source Bussard Polywell Fusion Reactor. As you know, EMC2 is funded by the US Navy which put an publication embargo in place. According to Bussard the company holds all important patents. So in the case you do built a working reactor are you allowed to?

The patents have expired and the renewal was withdrawn.

And most importantly if the project is open-source, how do you plan to make money with it and within what time span?

Charge for the reactors and their maintenance. Alternately, one can structure it as a utility and charge by the kilowatt-hour.

Concerning your current situation, you plan to raise $3000,- via Kickstarter for 3 months of research and equipement. However in your email to Willem you are talking about $100k. What do you plan to do with these funds?

$3000 is the amount I believed I could raise on Kickstarter. It will buy me some time, and allow me to replicate the Sydney experiment (powerpoint: http://bit.ly/cIjAA6 ).

Ultimately, this project will require the $~200M+ that Bussard predicts. $100K will get me back in the lab and moving forward with the research in a meaningful way. But that is a garage budget: no staff, used equipment from eBay, extra resourcefulness required.

One must reach break-even fusion to make money. An ideal budget is $1M to start, but anything from $100K to $1M will get the ball rolling.

In summary could you give a more clear picture of the expected development of your project concerning the funds and time needed as well as expected earnings?

Five years, ~$200M to break-even, $100B/year net income.

March 7, 2010 12:38:50 PM PST

Willem writes:

Hi Mark,
I am sorry but in this stage it is too risky for us to participate in your venture.
I really hope you get the right traction and do not give up on your dream.
Next time I am over in NY I would like to meet you again to continue our converstations.
Regards, Willem

keep me posted

Ultimately this is more encouraging than discouraging. It changed the way I think about the project. For a good month I was living in a headspace where I imagined my task ahead was to execute on this extremely challenging plan once the funding was secure. Expanded my mind.

I believe this project will eventually get fully funded. The investor must be fearless. Maybe this investor is you:

You only live once.

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14 responses

8 03 2010
M. Simon

Glad I could help. I don’t mind you mentioning my name but the physicist might not want to be publicly named.

8 03 2010
FAMULUS

OK. Last name redacted.

8 03 2010
M. Simon

Good now I can blog it.

8 03 2010
Heiner Wolf

If an “investor” sees potential, investigates, but stops because the stage is too risky, then I do not understand why he does not at least donate a bit. 1000 $ should be small change for an “investor” with millions in an investment fund. I’d fund your current project, just to see where it goes. Bailing out after this conversation indicates pure commercial interest. That’s ok for a later commercial phase, but currently this project needs more dedication.

Caution, if they do not believe in the cause, only the profit. The book says, money is enough. You work, they give the money. But when the going gets tough (and it happens in every startup), these diverging interests may break you. In other words: investors demand that you not just work, but also know the financials. So, you have every right to expect not just money, but also a little bit belief in the cause.

24 03 2010
Willem

Donate a bit, “1000 $ should be small change for an “investor” with millions in an investment fund”.

I do not have an investment fund of millions and I certainly don’t know investors who think $1000 is a small change.

Mark’s idea is ambitious and we hope he can get it to the next level on his own. We will meet each other again soon for follow up.

If the interest is only commercial we wouldn’t have met in NYC the first place. It will take a while before we understand exactly what this will lead to.

10 03 2010
M. Simon

I posted here on your encounter with an investor:

http://iecfusiontech.blogspot.com/2010/03/investing-in-polywell.html

I would have done it sooner but my computer died. I’ll also post at my other usual spots.

10 03 2010
M. Simon

Oh. Yeah.

Dr. Mike is how he is known in the Polywell community.

12 03 2010
14 06 2010
Pat

Whilst I find your project endearing and I wish you the best of luck, I really think you are overreaching by engaging investors with such ambitious goals.

I think the timeline you have presented this prospective investor is incredibly unrealistic. The logistics alone involved in the hiring of staff, design, purchasing and construction of a multi million dollar project would take far longer than you are proposing, let alone the fact that there are no certainties in research.

Writing things out on paper is very different to actually creating a tenable timeline, which is again different to actually executing it, as most project managers will attest to. I feel that you have over-trivialised the staggering amount of work that needs to be done to achieve commercialised (read: profitable) power production.

Why do you believe that you can beat Emc2 to breakeven based on a small amount of information they’ve chosen to release on the polywell and an hour long talk to the public by Bussard which is now slightly dated?

Once again, I admire your efforts and encourage you to continue pursuing your research, but I think you need to set more manageable short term goals to probe the underlying physics, and let the big picture stuff evolve over time.

14 06 2010
FAMULUS

Hey Pat,

I would take it one step further and argue that attempting break-even fusion on ANY timescale is unreasonably ambitious.

This project is unreasonably ambitious. That’s what makes it exciting and worth following.

I’m not trying to “beat” EMC2… I’m trying to participate in something potentially world changing.

Being open source is my leverage. I have at my disposal every smart/resourceful/wealthy person who forms an emotional connection with this project. That power has put Linux on servers all over the world and Obama in office.

14 06 2010
Pat

I certainly like the idea, however I think that open source paradigm isn’t quite as workable when it comes to science and research. Unfortunately contributing isn’t as simple as firing up your favourite text editor.

Ideas are plentiful, but it’s the legwork and subsequent results that will get us there in the end. “The devil is in the details”, so to speak.

P-B11 is incredibly ambitious. I don’t know the current state of emc2’s research, but I’m guessing they’ve been sticking to DD or DT so far.

I guess I should rephrase. Why are you more deserving of a large amount of funding than Emc2? I am not sure whether they are looking to get in bed with investors, but they certainly would take any donations they could get.

I think that the promise of profits and the end of reliance on fossil fuels is still very much in the pipedream stage. Engaging investors under this premise seems counter productive. I think you are better off looking for small amounts of philanthropic funding to pursue bite sized goals in the near term.

For example, a good place to start could be the verification of some of the claimed scaling laws, or the design and testing of this venetian blind energy capture method. By gaining momentum this way, with demonstratable results, you are more likely to attract interest and larger sums of money.

14 06 2010
FAMULUS

Q: Why are you more deserving of a large amount of funding than Emc2?
A: I publish my results.

I basically agree with you.

My current focus is very much on small scale short term goals, like replicating the Sydney Experiment:

http://prometheusfusionperfection.com/2009/12/25/new-copper-coil-polywell-on-the-scene/

What I need today is between $100K and $1M so that I can work on this full-time. I currently work 50 hours a week to finance all this.

But if an investor asks what it will ultimately take to reach profitability…. $400MM and 6 years AT BEST. At the very least this gives a potential investor a sense of the scale required.

5 07 2010
P Deshayes

Hi Mark.

Just saw your story on CNN and you just made me really happy, Its entrepreneurs like you that makes the world keep on going. I as myself is trying to get a really good wave project running here is the US with proven numbers and new patent with an output that is more then 40 over the closest wind or solar and still have hard time to get real investors to the project can definately see your uphill. But please keep on going and do not give up.I will also forward your website to some investors that might can help you with something.
Best
P Deshayes

17 04 2013
aneil

Mark,

Don’t worry about the money. Money will come. keep this stuff open sourced. Big oil may shut you down or create life threatening situation, but they cannot suppress the internet or millions of people who also know how to make it. Don’t keep this just to yourself. keep it open. Designs, processes, methods, etc. Your money will come. We don’t really need that much money to be happy. Happiness is achieved by some other means, not money.

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