The Torture of CFIUS
A 2018 Law is Changing the Way Space Industry Startups Raise Money
Final regulations for implementing the Investment Risk Review Modernization Act (FIRRMA) have not been issued by the U.S. Treasury Department, but space industry entrepreneurs already feel the law's effect. Under the new law, the Committee on Foreign Investment in the United States (CFIUS) can review any investment in critical infrastructure and critical technologies, if an investor obtains certain rights.
Space entrepreneurs want to avoid the entire review because it can be time-consuming and expensive, not because they think CFIUS will not approve the specific transactions. Space entrepreneurs say that companies can spend a substantial amount of money hiring legal experts to prepare CFIUS documents.
"If you have a $1 million investment injection into a small startup in one of these critical technologies, a substantial amount is going into legal fees,"said International Trade attorney Antonia Tzinova. "It doesn't justify proceeding with the investment," Ms.Tzinova added.
READ: The Torture of CFIUS