Space Energy
Space Energy
About Space Energy
Space Energy represented an ambitious attempt to commercialize the technology known as Space Based Solar Power (SBSP). It was incorporated in Switzerland in 2008 following two years of in-depth preparation and collaborative work with other companies in the same field. Start-up capital was half a million Swiss francs of co-founder’s funds.
By 2010 it had grown to have fully staffed offices and branches in five countries and was widely recognized as the global leader in bringing SBSP to reality. It also appeared in a multitude of press and media articles including The Sunday Times. The majority of funding came in the form of personal investment from Co-Founder Peter Sage. This totaled approximately $4m. This was also supported by funds from a number of private individuals.
During its years of operation, Space Energy accomplished many milestones and attracted some of the most talented and prestigious names in the field of energy, aerospace and commerce. ( Space Energy Team ). It also had tier one partners in all aspects of commercial business and compliance. ( Space Energy Partners )
In 2010, Space Energy successfully hosted the Sichuan Governments International Clean Energy Conference in China (Click here). This resulted in a purchase agreement to purchase the energy from Space Energy’s first commercial satellite, supported by a bilingual draft power purchase agreement prepared by Space Energy’s and the Chinese Government’s Lawyers.
Space Energy also branched into the terrestrial based solar market with a view to developing ground based solar in various countries including the U.S., India, Africa and the Middle East. (Click Here) This would enable the company to self-finance the large investment required in developing the SBSP low-earth orbit demonstrator and proof of concept. This resulted in a multimillion dollar offer from the global giant AES which Space Energy refused as it felt there was more profit in owning the project itself.
In addition, Space Energy set up a minerals division to broker the sale of yellow cake uranium from The Namibian Government to The Dong Feng Corporation of China as part of China’s nuclear power programme. ( Click Here ).
In late 2010, Space Energy’s ground based division suffered a setback days before it was due to complete its first major project. This was a result of the Euro crisis which caused their merchant bank, Natixis, to re-evaluate the project finance agreement. This led to a legal dispute in the U.S. and the subsequent and unfortunate closure of the Swiss & U.S. Division.
In Dec 2010 through to 2013, Space Energy continued to pursue ground and space-based projects with many milestones achieved. In an attempt to support cash-flow and protect investors, Space Energy also placed and sold various orders of IT equipment. These transactions were within the bounds of all agreements signed by Space Energy and were supported at various levels by the suppliers and buyers themselves.
In 2013, Space Energy secured its first Power Purchase Agreement (PPA) via its joint development partner, Swara, to build a 1MW plant in Rajasthan. ( Click here )
Shortly afterwards, the company suffered a major loss having been targeted by organized criminals who posed as legitimate buyers of one of the IT purchasing deals. This caused a debt to Space Energy of £1.8m. The main people responsible for perpetrating the fraud were Gary Massingham, Eddie Ellis, Paul Cummings, Mark Jones and Neil Percival.
Despite extensive personal efforts and substantial personal investment by Mr. Sage in the recovery of the debt, the company could not trade out of the loss and was eventually forced to cease trading. A copy of the report from the private investigation firm hired by Mr. Sage to recover the debt and to pursue the fraudsters can be seen here.
A Word About The Nature Of Investment.
Some investors have publicly stated their upset and have cast criticism at Space Energy due to the loss of their money. While this can be an expected reaction, it often fails to recognize the reality and nature of investment. In the interests of cutting through the distortion it may be useful to offer some facts and analogies that may help put things into their proper perspective.
A private investor invests into a business they do not control hoping to make a profit. It short, it is a gamble. Similar to betting on a football match. Of course, it is a calculated gamble based on research and the investor would only proceed should they be happy with the risk to reward ratio. Using a soccer analogy, this would be similar to betting on Chelsea FC to win the Premiership title in 2015 and betting that Leicester City wouldn’t. To the vast majority, including professional assessors, it would appear a reasonable bet. It is also worth remembering that the investors themselves are not participating in the game. Many are sitting on the couch with their fingers crossed while the players themselves do all the work on the pitch.
Investors also know that no particular result is ever guaranteed and sometimes even the most carefully placed bets do not pull through. Space Energy was one of these. In football terms, the company played a good game and scored some good goals, as evidenced by the facts above and the links to further documentation below. However, it still lost the match. It happens.
In our football example, if Chelsea lost the title and Leicester won it (which is what actually happened in 2015 at odds of 5000-1), the investor cannot march into a betting office and ask for their money back. Nor can they ask for a rematch. Instead, they learn what they can from the experience and hopefully make a better bet next time. Or they quit gambling. Or they choose to become a player themselves and see if they can do better in their own match.
If the team that has been bet on lose because they haven’t trained, or turned up to the match drunk, the investor would be somewhat entitled to be upset. But if the team perform their best on the day, then the cards fall as they do. Therefore, if someone is upset at their loss, it invites the question ‘What is the real issue?’ Is it that they simply do not like losing? (And who does?) If so, this has more to do with their relationship to losing than criticizing the standard of play. It does not give them the right to misdirect facing their own issue by blaming the players. That would only happen if they were upset at the players’ performance. Albeit judged from their position on the couch.
To address this directly, it is worth looking at the performance of Space Energy. The enclosed documentation and hyperlinks give an insight into how hard the team worked (for years). This highlights where time, energy and resources were spent (including personal money and money from investors).
As a reminder, the primary outcomes of Space Energy were to:
a) Commercialize Space Based Solar Power.
b) Build, own and operate a series of ground based solar parks in various countries.
c) Look to exploit any commercial opportunities that would support the company financially in its above aims. (i.e. Formation of Space Energy Minerals, Purchase and reselling of IT equipment, developing IP rights to thin film solar technology and more.)
Once the hyperlinked documentation has been properly perused, it provides a foundation for answering the following questions upon which to judge the performance of the ‘players in the game’.
Were any decisions taken maliciously or without commercially valid intent?
Could the founders or staff have committed any more working hours on top of the years of 100 hour weeks, public holidays and intense sweat-equity they poured into the project?
Can evidence be found of anything less than 100% total commitment and personal belief from anyone involved?
Is there one piece of commercially sound advice any investor gave that the company deliberately ignored?
Could the company have hired or retained any better or more competent commercial, industrial or legal advisors or partners?
Was the cause of Space Energy’s eventual closure attributed to anything other than a direct consequence of being targeted by deliberate con-men?
As the company’s single biggest investor (and therefore loser), could Mr. Sage have invested any more of his own funds? Incidentally, the information below includes evidence of the last $624,000 he invested personally, following a remortgage of his dream home at 18%, so that he could keep the business going. His home was subsequently repossessed by the bank.
Conclusion
Hopefully, your answers to the above questions will demonstrate that this was not about players turning up on game-day unprepared. The evidence supports the fact they played well.
The bottom line is that both the players and the investors were all on the losing side of the game this time. As the principle investor and co-founder, I personally lost more than all other investors combined. Part of that, was also because I was prepared to put my own money in first. And last. Following the failure of Space Energy, (due to being targeted by fraudsters and not through any direct fault of the employees or management), I also chose to focus on what I learned rather than what I had lost.
In my experience, this single switch in focus can be the difference between a life of growth versus a life on anti-depressants. As much as it may be a painful lesson, crying over spilt milk will never put it back in the bottle. So personally, I’m going to do what I’d do after any negative result (and yes, I’m not perfect and have had many) and that is to pick up the pieces and move on to whatever game that life hands me next. Only this time, I’ll try to play it better, supported by the expensive lessons I have learnt from the previous game. That is the nature of growth. Of course, one lesson is not to ask non-players to bet on the match. Something I’d only ever done in less than 5% of the businesses I’ve ever started.
I’ll also finish this statement by saying that I am no better or any more special than anyone else. Therefore, if you have suffered loss in Space Energy or any other bets you have taken in your life, there is nothing stopping you from doing the same thing and using it as a way to empower you moving forward. After all, our history is not our destiny.
If I can help in any way with making that shift in focus, I’d be glad to. And I mean that sincerely. Or, if you have something constructive to add that may help recover any of our money, please get in touch.
