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Paul Allen: Billionaire Backer of Private Space Ventures

Paul Allen is a co-founder of Microsoft who has turned his attentions to other ventures – including space businesses.

Allen was the financial backer of Scaled Composites' SpaceShipOne during the spacecraft's successful attempts to win the Ansari X-Prize in 2004. More recently, in 2011, Allen announced he would work with Scaled Composites again to develop a large space plane for private launches.

Aerospace designer Burt Rutan (left) and Microsoft co-founder Paul Allen (right).
Aerospace designer Burt Rutan (left) and Microsoft co-founder Paul Allen (right). Rutan's company, Scaled Composites, designed SpaceShipOne, the privately-built suborbital rocket plane that snagged the $10 million Ansari X Prize in 2004. SpaceShipOne was bankrolled by Allen. Rutan retired from Scaled Composites in April 2011.
Credit: Scaled Composites

With an estimated net worth of $15 billion in 2012, according to Forbes, Allen has plenty of money available for his various ventures.

The magazine calls Allen "that rare billionaire who combines passions for sports and science." He owns or co-owns three professional sports teams, and has also contributed $500 million so far to the Allen Institute for Brain Science. He also donates to various Seattle philanthropic causes.

Microsoft years

In 1975, at just 22 years old, Allen teamed up with Bill Gates to found Microsoft Corp. The school programming buddies were spurred to start their company after the first personal computer kit, the Altair 8800, came out in 1974.

paul allen
Paul Allen
Credit: Stratolaunch Systems

Gates and Allen were sure they could make a better operating system using the computer language Basic, and convinced the president of Altair manufacturer MITS (Micro Instrumentation and Telemetry Systems) to try out their idea. "Micro-soft", as it was then known, was formed while Allen was director of software for MITS.

In 1981 came the watershed moment for Microsoft: IBM's first personal computer hit the public market with Microsoft's MS-Disk Operating System (MS-DOS) running it. This contract ended up being a blockbuster deal for Microsoft, and was the determining factor behind Allen's wealth.

However, Allen's health took a turn for the worse the next year. He received a diagnosis of Hodgkin's lymphoma, but successfully went into remission after receiving radiation treatments. (Allen also battled and beat back non-Hodgkin's lymphoma in 2009.)

Around this time, Allen's biography alleged, Gates tried to dilute Allen's stake in Microsoft. While Gates disagrees with the version of events portrayed in "Idea Man," what is known for sure is Allen left Microsoft to pursue other ventures. But Allen found himself sitting on a rather large fortune.

In 1986, Allen co-founded Vulcan Inc. as a portfolio company for his business and charity work, a venture that he still is a part of today. (Allen has said in media reports that Vulcan is not a nod to the fictional planet on Star Trek, but a reference to the Roman god.)

"Those endeavors include the creation of innovative technologies, award-winning films and vibrant new neighborhoods," Vulcan stated on its website in 2012.

"They're about the revolution of rock 'n' roll, the humanity of science fiction, and the poetry of a fingertip catch. They're about reaching from the tiniest genome to the very stratosphere, and most importantly, about improving the way people live, learn, do business, and experience the world."

Funding SpaceShipOne

In 1982 – around the same time that the Microsoft IBM contract took hold – entrepreneur Burt Rutan founded Scaled Composites. Scaled began as an "aerospace and speciality components" firm, but as the years progressed the company had much loftier aims: spaceflight.

The Ansari X-Prize for spaceflight was announced in 1996, promising $10 million to the first non-governmental organization to fly a spaceship above Earth's atmosphere – twice – and come back to Earth safely.

Allen had been interested in spaceflight since childhood, and by some accounts he went to Florida to watch Columbia's first space shuttle program flight in April 1981. Allen met with Rutan in 1996 to chat about supersonic flights, but the partnership didn't really get moving until Rutan's design for SpaceShipOne firmed up in the late 1990s.

Quietly, Rutan and Allen brokered an agreement in 2000 to develop SpaceShipOne. Media reports indicate that Allen did not reveal his involvement until late 2003, after SpaceShipOne did its first supersonic test flight.

"Our flight this morning by SpaceShipOne demonstrated that supersonic flight is now the domain of a small company doing privately funded research, without government help," Scaled wrote in a December 2003 press release.

"The flight also represents an important milestone in our efforts to demonstrate that truly low-cost space access is feasible."

SpaceShipOne went on to win the X-Prize in 2004, but the next stage in Scaled's development passed to another rich entrepreneur: Richard Branson. The charismatic Virgin founder wanted to establish a space tourism company, Virgin Galactic, on the back of Scaled technology.

While the first test flight has been pushed back several times to a reported 2015, this represents a large potential spinoff for Allen's investment.

This image shows the planned Stratolaunch Systems carrier aircraft.
This image shows the planned Stratolaunch Systems carrier aircraft.
Credit: Dynetics/Stratolaunch Systems

Gigantic cargo plane for space

In late 2011, Allen announced he and Rutan would team up again under the name Stratolaunch Systems. Their goal this time would be to build a gigantic aircraft that would, when ready, send a rocket and passengers into space. [Infographic: Biggest Aircraft in History to Launch Spaceships into Orbit]

At the time, they predicted the first test flights would take place in 2015, with cargo flights beginning in 2016. Customers would come from both the private and the public sector.

"I have long dreamed about taking the next big step in private spaceflight after the success of SpaceShipOne – to offer a flexible, orbital space delivery system," Allen said in a statement in December 2011.

"We are at the dawn of radical change in the space launch industry. Stratolaunch Systems is pioneering an innovative solution that will revolutionize space travel."

The company originally planned to use Space Exploration Technologies (SpaceX) – best known as being the first private company to berth with the International Space Station – to power the rocket launches.

However, SpaceX reportedly pulled out of the deal over requested design changes to its Falcon 9 rocket launcher for Stratolaunch's work. Stratolaunch then went to Orbital Sciences Corp. to see if they were capable and willing.

"We have been engaging Orbital over the past few months and have them under a study contract through early next year with specific design deliverables," Stratolaunch chief executive Gary Wentz wrote in a November 2012 e-mail to Space News.

"They are currently evaluating several alternative configurations that appear promising. We expect more information to be available in the February 2013 timeframe."

As of late 2012, the first test flights for Stratolaunch are expected to happen in 2017.

— Elizabeth Howell, SPACE.com Contributor

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