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June 15, 2009 | last updated December 1, 2011 12:02 am
Venture Builder

Propelled to succeed | An interview with Richard Lugg of SonicBlue Aerospace

Richard Lugg's dad — a defense/aerospace manager working in (generally) top-secret projects — made a sizeable imprint on his son. When he was just 5 years old, Richard was building space shuttles out of wood and glue. At the age of 12, he was studying physics, chemistry, biology and astronomy, and going to school seven days a week as an American at a boarding school in England. By the time he was 19, Lugg was back in the United States with some of the world's largest aerospace and defense contractors, such as General Electric and the U.S. Army, working on the Cold War-era Minuteman ballistic missile defense program and other of this country's most strategic programs. From there, he began a career working for aerospace engineering, manufacturing and consulting firms finding solutions to really hard problems — like how to produce lighter, stronger advanced materials for hypersonic vehicles that could perform at Mach 10 speeds.

Getting off the ground

After more years working for other aerospace technology companies, he conceptualized a startup that would leverage his years in and passion for aerospace work, creating SonicBlue Aerospace of Falmouth with a view to making lightweight composite jet aircraft. After further exploring the economics of building new planes, he focused his vision on one of the key components of that craft — hybrid electric gas turbine propulsion systems for the aerospace industry. Here's how Richard describes his experience trying to start a business in Maine:

On SonicBlue: The company is trying to put a stake in the ground for a green energy solution in aerospace, bringing its innovative hybrid electric propulsion system to market globally. SonicBlue, given a chance, could bring the new future of the propulsion industry to Maine.

On starting in Maine: "My intent has always been to grow a company in Maine [but] my experience here has been a very difficult one." Lugg has met with state leaders to gain support for SonicBlue and stress the importance of growing the company in the state.

On funding SonicBlue: "We have tapped just about every major resource in Maine — none has been interested." While the company won a Maine Technology Institute seed grant, it did not get further financing as it was building its workforce from out of the state. SonicBlue has partnered with intermediaries to access high-net-worth individuals, including a separate effort targeting investors from the United Arab Emirates. In 2008, the company raised more than $1 million. Since the first quarter of 2009, it's been more difficult — the economy has slowed down and, therefore, so has raising capital. If SonicBlue closes on all $300 million invested over the next six years from the UAE, the company will move to Dubai by 2011.

Advice for entrepreneurs: "Keep the best of kin and friendships close, but keep your enemies closer." A downturn is the time to invest in, not pull away from, the next innovation and the new global markets it may create. Maintain your vision and boot strap whenever and however you can. Get companies that may become customers or even perceived competitors to provide in-kind support if capital is unavailable. Find more experienced, brighter and more globally minded people than you. Associate with top institutions. Stay away from venture capital if you can, pursuing it only when you have added significant value to the company and can get capital on attractive terms. On investment, find people who have passion and industry experience, people who you want more than their money. Be sure you are up for the marathon of starting a company. That said, your investors do not care about your sacrifices — they invested in your company to get an above-average return and are counting on you to make it happen. You owe them — it's your obligation and fiduciary responsibility. Ask for a lot of help. Never take "no" for an answer.

Lugg's idea is big one — a hybrid electric propulsion system that reduces greenhouse gases to zero, produces massive power for all electric subsystems on aircraft and doubles the range for anything that flies. The idea will likely demand acceleration of aircraft manufacturers' movement to innovating new designs. Hopefully, Lugg will find patient investors who will wait for his customers to be ready to take advantage of the game-changing technology he's developing.

Michael Gurau, managing general partner of Clear Venture Partners in Portland, can be reached at mg@clearvcs.com.

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