Early last year, when we started exploring the climate and energy space as part of our Global Resilience strategy, fusion was one of the first areas we closely examined. The ignition breakthrough had just occurred at the National Ignition Facility (NIF), and the extraordinary nature of that milestone sparked intrigue and enthusiasm across our entire firm. 

We wanted to support the advancement of this technology but were plagued by the typical chorus of concerns: “but fusion is always 20 years away”, “fusion can never be commercialized”, “how can you invest in fusion as a venture fund?”, “doesn’t fusion need billions of dollars of capital?”, “shouldn’t we all just focus on fission since it has actually been built and proven?”... and so many more. 

Several of these concerns resonated, particularly following our experience investing in the energy space in the early 2000s, when we learned that smart teams and great technologies, no matter how novel and revolutionary, could not guarantee business success. In fact, in complex and regulated industries like healthcare, defense, and energy, we fervently believe that technology is table stakes and investors need to think much more holistically about policy, market structures, capital formation, and governance. As we wrote in Geopolitics are Changing, Venture Capital Must, Too, “in order to build and support the next generation of enduring businesses, we need to develop a new approach to company building, one that transcends, and ultimately redefines, venture capital.” 

For us, redefining venture capital means expanding what’s possible for founders, companies, and society and playing the long game - two of the core values of our firm and influences that lay at the heart of our investment in Pacific Fusion. 

Why Pacific Fusion?

Though several factors influenced our thesis in Pacific Fusion, the most material to our decision and the company’s ability to raise this historic funding round center on the following three contributors.

1. Team

When we first met Pacific Fusion, we were immediately impressed by the caliber of the founding team, led by Eric Lander. Eric’s experience building impact-driven scientific teams to tackle modern society’s most complex challenges, such as his work on the Human Genome Project, made him an ideal leader to recruit the highest caliber, most interdisciplinary experts to Pacific Fusion. Will Regan and Keith LeChien were two such founding team members. 

Will Regan’s experience at ARPA-E developing the Accelerating Low-Cost Plasma Heating and Assembly (ALPHA) Program provided an intimate understanding of the challenges and commercial viability of almost all the new, cutting-edge pathways to fusion. His time founding the Mineral project at X, the moonshot factory gave him experience leading cross-functional teams working to achieve breakthrough engineering milestones. 

Keith’s extraordinary career leading pulsed magnetic fusion at Lawrence Livermore National Laboratory (LLNL) and serving as the Director of Inertial Confinement Fusion at the National Nuclear Security Administration (NNSA) make him one of the (if not the) leading experts in pulsed magnetic fusion. Keith is also one of the inventors of the Impedance-Matched Marx Generator (IMG), a technology that significantly influenced Pacific Fusion’s approach and architecture. 

Keith and Will’s reputations in the field have enabled them to recruit several of fusion’s foremost talents, including Leland Ellison, a former computational physicist at LLNL and Head of Simulation and Modeling at Pacific Fusion, Nathan Meezan, who spent over 20 years at LLNL leading target design teams and is now Head of Target Design at Pacific Fusion, and Alex Zylstra, principal experimentalist responsible for achieving ignition on NIF, now Head of Experiments at Pacific Fusion.‍

2. Technical Approach

Beyond this exceptional team, we were immediately drawn to Pacific Fusion’s highly pragmatic pulsed magnetic approach, which uses fast-rising, high-current pulses to magnetically squeeze and heat small containers of deuterium-tritium fuel, driving the fuel to fusion conditions.

In our view, this approach builds on the established science and proven engineering of the most recent breakthroughs in fusion: the achievement of ignition at LLNL, record-breaking pulsed magnetic fusion performance (second only to laser-driven fusion, based on Lawson’s criteria) on the Z Machine at Sandia National Laboratories in 2022, and the successful demonstration of the IMG, which represented a major step forward in pulsed power technology.

The foundational components of Pacific Fusion’s design are simple, mass-manufacturable units called bricks (two capacitors and a switch) assembled into modules the size of shipping containers. The chamber is compact and cylindrical and does not require exquisite architecture, enabling relatively low-cost maintenance. Importantly, with this approach, the chamber and target design can be optimized independently from the modules, supporting an efficient and iterative design process that should reduce CAPEX and accelerate learning/development cycles.

3. Financing Structure

We know that every approach to fusion will be challenging and the road will be long. 

After all, these companies require specialized talent, unique equipment and materials, supply chain development, and iterative failures to reach their potential. Capital is truly their lifeblood. For these businesses, frequent, piecemeal financings can misalign investors and management teams and expose companies to negative funding cycles where challenging and distracting fundraises compound, rather than improve capital constraints. In our experience, it is exceedingly difficult to escape these cycles, and unfortunately, we continue to see companies fail or experience painful structured financings as a result.

We wanted to give the Pacific Fusion team every possible chance to succeed by aligning a committed community of investors to its goals, risks, and timeline, and by giving the management team the capital and confidence to do that critical thing that just might accelerate their progress and change the course of history.  

To do this, we collaborated with the founding team to create a unique milestone-based funding structure wherein the entire $900M+ of capital was committed upfront but is only unlocked as the company achieves pre-defined milestones. 

We believe this approach provides a clear roadmap upon which investors and the company can fully lock arms, and importantly, aligns capital with risk, which we think is so often lacking in long-duration, capital-intensive projects in this space and often deters venture capital investment.

It is our hope that this structure inspires builders and investors in all advanced technologies to expand possibilities, and equally, to venture beyond.