a dinner with the philanthropists behind the X Prize Foundation. Stein wouldn’t tell me who else attended, but he’s well acquainted with such X Prize supporters as Dean Kamen (a Boston Xconomist) and Ariana Huffington. “I thought the concept of using prizes to stimulate innovation was spectacular,” Stein says, “so I started doing my due diligence.”
His research led him to New Mexico for the X Prize Cup, which was conceived as an annual two-day Air & Space Expo. During the trip, he met four aerospace engineering graduate students from Romania who told Stein they had developed a composite rocket engine. “When I asked them if they had filed patents on their design,” Stein recalls, “they said, ‘Patents? We don’t even have enough money for lunch tomorrow.’ ”
Stein says the encounter encouraged him to take on a supporting role in developing future multi-million dollar “mega prizes” that induce technology innovation. Since the 2004 success of SpaceShipOne, which won the $10 million Ansari X Prize for its suborbital spaceflight, the X Prize Foundation has created similar prizes for breakthroughs in genomics, fuel-efficient automobiles, and to develop a robotic lunar lander.
Prize Capital, however, is exploring the idea of creating mega prizes that are more focused on Stein’s passion for the environment—in developing breakthroughs for next-generation biofuels, solar energy, and in energy efficiency. Stein says the kind of breakthroughs sought, however, are too “over-the-horizon” for conventional venture capital funding. “In order to attract capital to something that is extremely early,” he says, “you have to take a completely different approach.”
His approach is to have Prize Capital form a strategic alliance with a non-profit partner, such as the X Prize Foundation, with each taking a different role in a mega-prize competition. The foundation assumes a non-partisan role in setting the rules and in administering the contest. Prize Capital participates as an investor in
