Iridiums failure came after intensive capital formation and the assembly of what many investors said at the start was an impressive management team and a commitment to aggressive marketing. Few of the new proposed commercial launch service providers have been as fortunate.

Kistler Aerospace, proposing a two-stage reusable cargo rocket has assembled senior managers from the civil space agencys Apollo glory days, but has faced difficult times in raising the millions it needs to build and fly its K-1 space vehicle. Already Iridiums failure has been felt by the firm. "Its been touch and go for a while, with Iridiums folding," Kistlers Charles McBridge, Chief Financial Officer, told space.com. "Thats really colored the market. Public money has dried up a bit," he said.

McBridge said that funding delays has caused rearrangement of Kistlers original launch schedule for test flights out of Woomera, Australia and the production schedule for contractors working on assembly of their first vehicles. "We had to slow our production down," due to lack of funding.

Kistler has also increasingly turned offshore for capital this year as well, finding some foreign investors more interested in obtaining a piece of a space launch startup than put off by the risk of the new technology.

Other firms take a longer view. "Theres no question that the difficulties Iridium faces present a concern to the nascent small launch vehicle industry," says Pioneer Rocketplane CEO Mitchell Burnside Clapp. "But at the same time its important to recall that the satellites are in orbit, the spectrum is allocated, and the reorganized Iridium LLC or its eventual receivers will still have a constellation to maintain and operate," he explained.

Clapp even saw some positive signs in Iridiums troubles for such launch providers as his startup. "Given that the financial pressures they will face will increase the level of cost-consciousness even further, " Clapp suggested, "it is possible to imagine a fairly nice silver lining due to Iridiums troubles increasing their desire for affordable launch services."

Clapps company is trying to develop a winged rocketplane that refuels in mid-air using tanker aircraft. But he also worried that the possible "chilling effect" of the failure would hurt other satellite constellation developers all potential customers for the Pioneer rocketship.

Among the launch providers in the early stages is the California-based Rotary Rocket, struggling to develop the helicopter-equipped Roton spaceship. Rotarys Vice-President of Sales and Marketing predicted tough times ahead for his business segment, but more because of the markets timidity than the real extent of the risks exposed by Iridiums troubles.

"We are sure the knee-jerk reaction from the financial markets will be that funding... will be harder to get," according to Rotarys Geoffrey V. Hughes. "Probably much harder to get in the short-term," Hughes said.

But he also made the point that satellite ventures such as ICO or Globalstar as well as Iridium "are potentially hugely profitable even with todays ridiculously high launch costs," if only they could actually get to market. Hughes said that the financial industry had yet to realize the potential for the future of wireless telecommunications services, such as offered by Iridium and others.

"We call personal wireless telecommunications the undiscovered country,'" Hughes said. The best way to achieve such capabilities globally were through satellites, he suggested. "Nobody in their right mind is going to wire the emerging nations when we can do the same job faster, better and cheaper much faster, better, and cheaper using satellites."

"Wake up people," Hughes urged. "We are all going to be connected, but unplugged."

He also predicted that establishment of low cost launch services would virtually make such mobile satellite constellations profitable from the earliest stages. So according to Hughes view of commercial space, the most logical step was for "the financial markets to heavily fund the nascent companies like Rotary Rocket."

The need and the market are there, Hughes predicted. But he doubted that there were sufficient risk takers on Wall Street. "Frankly, the only thing that is not there right now is a financial community with balls," Hughes said.