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☕️ Reporting Live From The Gundo
Valar Atomics + More Tech Breakfast Club Events
Morgan Barrett
February 20, 2024
Today’s Menu ☕️
Member Spotlight: Isaiah Taylor @ Valar Atomics
👋 Hi, Breakfast Club Members!
I’m in NYC this week - if you want to chat about legal stuff (I’m a startup lawyer @ Optimal) or your fundraise let’s get coffee.
Also, thank you to Charlie Stephens and Fidelity for Startups for sponsoring today’s newsletter. Talk to Charlie re: Cap Table Management
LOS ANGELES
Venice Tech Breakfast Club - March 19th
Vibes were at an all time high for February’s Tech Breakfast Club in El Segundo. Super grateful to Litquidity and Valar Atomics for cohosting. And as always, shoutout to Augustus Doricko from Rainmaker. Not sure if you’ve heard about what’s happening in El Segundo, but you should get up to speed. This article from the Washington Post will give you some background.
Now, with that said, I’m hosting the next LA Tech Breakfast Club in Venice. Teaming up with Jacques Sisteron from Upfront. He focuses on early stage hard tech.
NYC Tech Breakfast Club March 21st
March NYC Tech Breakfast
If you’re a Founder or VC, come hang with me. Headcount is going to be extremely limited for this one. Just founders and VC’s.
Fidelity x Shoobx
Thank you to Fidelity for Startups for sponsoring Tech Breakfast Club
Fidelity for Startups is supporting the startup & venture capital community in a big way.
Shoobx, their Cap Table platform, is the all-in-one tool that will help founders prepare for their next round of funding.
Shoobx gives founders access to seed stage capital, equity scenario modeling, and premier support to generate, execute & store legal documents.
Connect with Charlie Stephens to learn more
Member Spotlight
Isaiah Taylor, Founder of Valar Atomics
Isaiah preaches a vision of abundance - we should consume more energy, have more children, and enjoy the bounty of this universe - and you know what… I think he’s on to something.
I recently made the pilgrimage to Isaiah’s workshop in El Segundo along with Colton Cray from Litquidity Capital to see/hear for myself about Isaiah’s audacious vision for the future and I came away a believer.
Isaiah, Child, and Augustus
Where does the story for Valar start?
My great grandfather was a chemist at Oak Ridge National Laboratory, working on the Manhattan Project. This was before it was a national laboratory – it was a military installation at the time, and the purpose of that site was to enrich the uranium. They recruited really smart people from all over the US. One of those was my great grandfather.
I've always been very impressed by what America used to be capable of: we used to build things at a speed and with an amount of conviction that's kind of unbelievable. A lot of things have changed, but one of them is that energy got more expensive. Energy up until about 1972 was getting progressively cheaper, and we were using progressively more of it.
Then in about 1972 usage flatlined, and began to go down. And then energy became more expensive for the first time ever. There were a lot of downstream effects, like people moving to white collar work.
When I was in high school, I was really into nuclear energy research. I started to look at the market, and I was confused about why nuclear is a really small industry compared to all other power generation. Why don't we have nuclear energy everywhere? I realized nuclear is mostly illegal: the regulatory environment is so burdensome that no real engineering happens. Iteration doesn't happen.
Projects blow through their budgets, it gets super expensive. I basically came to the conclusion that if you wanted to really push energy forward, the most leveraged thing you could do would be to become a politician – and I didn't want to become a politician. That just sounds like no fun to me. I'm an engineer.
I actually dropped out of high school when I was 17. I’m a self taught software engineer, and got a great job offer to go work on software, and did a bunch of fun things in that. But in the background, in the back of my head, I just had this kernel of an idea, which was: what if we could fix the industry by separating nuclear fission as a technology from the electrical grid?
Can you give us a little background on how it would work to separate nuclear fission from the electrical grid?
Almost all nuclear reactors today are either pressurized water reactors or boiling water reactors. That means you have fuel elements that are undergoing nuclear fission – so you have some amount of enriched uranium-235 that is splitting apart and releasing neutrons, which become thermal neutrons and heat up water. That water is either under pressure so that it can heat up to 350 degrees Celsius without boiling, or it's under ambient pressure, in which case it boils immediately and turns into steam. One way or the other, you get very hot water.
Eventually, that water turns into steam, the steam goes into a steam turbine, the steam turbine turns that turns a magnet, now you have electricity. That's 99% of the nuclear industry today.
The problem with that is it's just not a very good way to make electricity using nuclear fission.
Where does Valar Atomics come into that?
We make jet fuel out of thin air. Today, when you put jet fuel into a jet engine, basically, what you're doing is you're taking the loosely bonded chemical energy, mixing with oxygen, and getting combustion, where a lot of thermal heat is released. And out the back of that, you get water and carbon dioxide.
We basically rewind that: we reverse combustion. We take the same ingredients out of the air – we take carbon dioxide and water, and we split the water into hydrogen and oxygen. Once we have the hydrogen, we combine it with carbon dioxide, and we can make a variety of hydrocarbons that way. We're gonna sell jet fuel, methane, and diesel. There's a multi-trillion dollar market for it.
Methane is a good product to make, depending where you are in the world. Jet fuel is a universally good product to make. The most important thing we make is hydrogen. Once you make hydrogen, you can make a whole spectrum of hydrocarbon products.
I've been doing research on this for five years. But it took me a long time to get to the solution of hydrocarbons. I was working for a long time to think about different ways that you could untether nuclear fission from the grid and went through a bunch of iterations. I founded the company last year, and raised a round of funding last October. And since then, I’ve moved to El Segundo and got the lab set up. I think we're just now kind of hitting the gas.
How can this be cheaper than pulling oil out of the ground and refining it?
The costs of jet fuel today come down to exploring, drilling, pumping, and refining, and logistics. Those are the five pillars that go into existing hydrocarbons, we get to skip four out of those five. We don't have to explore, drill, pump, or refine – though we do have to eventually transport the hydrocarbon. What we replace those four pillars with instead is a nuclear reactor and a hydrocarbon synthesizer that uses the nuclear heat. My bet is that piece of infrastructure is orders of magnitude less expensive than the four pillars.
I think one of the travesties of the modern age is that energy costs what it does when we literally have free rocks – all over the crust of the Earth – that have basically infinite free energy in them.
Where did the name come from?
The valar are sort of the elementary powers of Middle Earth. They were highly influential in the creation of Middle Earth and then are the ongoing powering spirits behind it. Energy for me is behind everything. It's the cost function behind everything else.
For instance, the cost of energy is really impactful to artificial intelligence right now. It's really impactful to advanced manufacturing, robotics and all these different fields like transportation logistics. And as the other things inflect, energy and its costs become more and more and more important.
What would this look like in practice? A giant nuclear reactor somewhere in the middle of the country?
We want to make a [ redacted ] gigawatt nuclear power station. The largest in the world is currently operating in China, is almost eight gigawatts, and we want to make [ redacted ]. If you can put a lot of power down into a single site, you make each new unit of power much cheaper. The repeatability is where all cost savings come from in technology. And the surprising thing is it doesn’t take much space. The largest nuclear power station now is about the size of a mall.
I hope it'll be in Texas. But it could be anywhere in the world that we can deploy them. And that means attracting an enormous amount of very talented people who are extremely motivated.
Is there anything else you can announce? Child number 4?
Hahaha, when that happens, Tech Breakfast Club will be the first to know
How did you end up with a headquarters in El Segundo?
The culture of engineering here is unbeatable. There are a lot of incredibly smart people who also have an incredible bias to action – they want to build stuff. They're tired of software. El Segundo specifically feels like small town Americana.
El Segundo has four sides: the ocean, the Hyperion water treatment plant, the El Segundo Chevron refinery, a reminder of what hydrocarbon production looks like, and then Hawthorne, the cradle of aerospace. The home of SpaceX. It’s very inspiring.
Where does August Doricko come into the story?
I met Augustus on Twitter. I actually have one specific screenshot that is the beginning of our friendship. He posted, or a friend posted, about throwing bone marrow into his backyard. I commented under this guy's post - get you some friends who will throw bone marrow into your backyard. Then Augustus commented “Okay, let's be friends.”
We called each other a couple times and he came out and visited me several times in Idaho.
His role is very much bringing the energy and the leadership to say, “we're not giving up on this country.” There are a lot of reasons to think that, you know, America can't do things anymore, right? He does a fantastic job of just putting his foot in the ground and saying, “no, we're back, it's happening.”
Before we started recording, you were telling me about SpaceX and how that influences your thinking - can you say a little more about similarities between Valar and SpaceX
Markets matter. SpaceX is a good example. If you do the math on what it takes to get kilograms to orbit, you need a certain amount of fuel and an oxidizer. And you need to combine those in an engine, and then you can get kilograms to orbit. The price of that was so wildly different from what you could actually get on the market, that there was a massive company to build.
Nuclear is like that, but times 1000. The market on the other end is even bigger than space launch. There's around $8 trillion worth of energy being bought and sold around the world right now, and there's this unbelievable physics gap between how you could deliver that from just a base engineering perspective, and how it is being delivered. So unbelievably large market, crazy untapped physics. And we have to get from here to there.
Your market determines everything. The reason that NASA was never going to make rockets is because that market was structured wrong. Nuclear is 100 times worse than the rocket industry was before SpaceX, but the dynamics are the same, where it's mostly government driven. Governments really suck at allocating capital.
What’s the vision in 15 years?
I think 15 years from now, we're selling trillions of dollars worth of hydrocarbons. I don't think that market is going anywhere – people need hydrocarbons for a number of different things. Most power generation, even for electricity, comes from hydrocarbons. But even if you are a total electrification person who thinks absolutely everything should be electrified, there's still no solution for jets because hydrocarbons are 40 times more dense than lithium ion batteries. You have to have that for air transportation. So the market for hydrocarbons is huge. It's actually getting bigger, it's not shrinking And yet we can make it cheaper than you can drill it.
Does that mean all the brainpower going into battery technology is misplaced?
No, because batteries are really useful. Tesla is a great car. It makes a lot of sense for that specific use case, which is for a city dweller who commutes like 30 or 40 miles a day at the most. Long haul trucking though, doesn't make sense for batteries. Aircraft absolutely don't make sense for batteries. Shipping doesn't make sense. I would even argue that moving large amounts of power around the world also doesn't make sense for electrical transmission, because it’s many times cheaper to move gas through a pipeline than to move power through an electrical cable.
For someone who didn’t want to be a politician, this feels like something that veers into the political. What’s your plan?
Yeah, it's definitely political. It's always political. All engineering is, at the end of the day, political. Over the last 50 years people have retreated to software, because it's not political. You can do a lot of iteration without ever really dealing with regulators or dealing with politics. But America is back, baby. We're building things again. And that means that we're going to deal with regulators and we're going to get it done.