SUNNYVALE, Calif. — Recent moves by House and Senate lawmakers to scale back NASA’s commercial crew transportation initiative will slow the momentum that has been propelling entrepreneurial space activities forward, but will not stall those activities, according to government and industry officials attending the Space Frontier Foundation’s annual conference here July 23-25.

“If the president’s budget does not pass, commercial space will prevail anyway, it just will be much more difficult,” said Esther Dyson, an entrepreneur and investor with holdings in several space companies including Space Adventures of Vienna, Va., and XCOR Aerospace of Mojave, Calif.

The White House budget unveiled in February included a plan to move away from government-owned and -operated spacecraft in favor of commercial crew taxis and cargo ships. Although House and Senate committees approved NASA plans to pay private firms to develop new cargo vehicles under the Commercial Orbital Transportation Services program, they balked at the plan of the administration of U.S. President Barack Obama to transfer human spaceflight to the private sector, voting instead to resurrect elements of NASA’s Constellation program.

“In this first big battle of the war, the new path hasn’t been embraced; the old path is still dominating the conversation,” said James Muncy, co-founder of the Space Frontier Foundation and president of PoliSpace, an independent consulting firm in Alexandria, Va. “No one should have thought this was going to be an orderly transition.”

Still, space industry entrepreneurs characterize the current fight in Washington as a speed bump that will slow the industry’s transformation from one dominated by a handful of aerospace giants building spacecraft according to government specifications to a bustling marketplace where companies compete to offer products and services to customers around the world.

Mark Sirangelo, vice president of Sierra Nevada Corp.’s Space Systems Group of Sparks, Nev., said, “The battle is not yet over. We all want to build a vibrant space industry.”

To create that industry, companies should focus on conducting successful flight demonstrations to show skeptics that entrepreneurs can offer safe, reliable space transportation. “They don’t believe us yet,” said Tim Pickens, chief propulsion engineer and commercial space adviser for Dynetics Inc., a scientific and engineering firm based in Huntsville, Ala. “We’ve got to fly, y’all. We’ve got to get some stuff in the air.”

Michael Mealling, business development vice president for Masten Space Systems of Mojave, Calif., echoed that sentiment. “There’s a strong perception that commercial can’t do the job,” he said. “Flying trumps all rhetoric. The number one thing to overcome the barrier is to fly, baby, fly.”

In addition, he said, companies will need to find new sources of funding instead of relying on NASA. “Come up with innovative ways to divorce the decision-making process from the political process,” said Mealling, suggesting that states, international partners or nongovernmental organizations could help fund space projects.

Alan Stern, former NASA associate administrator for space science and associate vice president of the Southwest Research Institute’s Space Science and Engineering Division in Boulder, Colo., urged his colleagues to “try to think of ways to build a business without any government help.”

One way to do that is to attract private investments either from angel investors who use their own money to back startups or from venture capital firms (VCs) that make investments on behalf of a group of limited partners, said Joshua Raffaelli, an associate at Draper Fisher Jurvetson. Space Exploration Technologies (SpaceX) of Hawthorne, Calif., has combined the investments made by its founder Elon Musk, who also founded PayPal, with millions of dollars from the venture capital firms Founders Fund of San Francisco, and Draper Fisher Jurvetson of Menlo Park, Calif.

Once suborbital flights begin to operate and investors see a viable commercial market, more capital will flow into entrepreneurial space ventures, Dyson said. “The VCs are looking for cool new things to do with their money,” she said. “They just don’t think space is it, yet.”

Some industry officials expressed concern that the current budget battles in Washington would make investors wary of the space business. Raffaelli said, however, that while his firm is paying attention to congressional action, executives are not overly concerned because they have a longer-term perspective. “We are watching it, but it would not stop us from investing in space,” Raffaelli told Space News.

NASA officials attending the conference acknowledged the importance of private capital but urged entrepreneurs not to write off the space agency as a potential partner. Small Business Innovation Research funding, for example, is a congressionally mandated program. “That money is going to be spent anyway,” said Jim Ball, center development manager for NASA’s Kennedy Space Center in Florida. “Targeted properly, it should help to stimulate new commercial businesses.”

The space agency also is a good customer for entrepreneurs who already have found investors and simply want to sell products or services. “If you walk in the door with your own check, NASA will bend over backward to help you,” said Dennis Wingo, founder of Skycorp Inc., a Huntsville, Ala., firm that seeks to manufacture satellites aboard orbiting vehicles, and chief technical officer for Orbital Recovery Corp., a company focused on extending the life of satellites.

The combination of entrepreneurial innovation and government backing can be extremely successful, according to Douglas Comstock, director of NASA’s Innovative Partnerships Program. “Small companies can do innovative things,” he said, adding that NASA can support those projects by offering funding, expertise and flight testing services. “There is great synergy in bringing these two cultures together.”

The key, industry officials said, is to make sure that a commercial enterprise does not rely exclusively on annual government expenditures for its survival. When Masten Space Systems was formed, for instance, company officials knew they might not get a dime from NASA, Mealling said. “Having NASA as a customer helps,” he said. “But when I get into my planning, I know that any customer can go away. If I lose a single customer, I can still sleep at night.”

Debra Werner is a correspondent for SpaceNews based in San Francisco. Debra earned a bachelor’s degree in communications from the University of California, Berkeley, and a master’s degree in Journalism from Northwestern University. She...