Interview with Thomas A. Tombrello - Caltech Oral Histories

Tombrello–268
ASPATURIAN: When a sale like that is made, what percentage of the revenue comes back to
Caltech?
TOMBRELLO: Depends on what the original setup was. Previously Caltech did rather poorly.
We took license fees. That worked well with [Leroy] Hood’s DNA sequencer; but Caltech never
took equity. With small companies, there’s an interesting trade-off on whether it’s better for
them to give you some percentage of the equity in the company or pay you license fees. That’s
where Larry really was important, in trying to work out with the company what the proper mix
was. Typically, at the maximum, Caltech will have 5 percent of the stock, which can be a lot of
money, a lot of money—but not to be greedy. You know, the key was that Caltech essentially
had put nothing into these things; 5 percent, when you put in nothing, is not shabby. It’s good!
There may be license fees as well, and Caltech continues to own the patents except for that one
case where we sold it. [Laughter] I’d love to think that Nathan made some money out of that.
Someday I will ask Nathan, because I do see him periodically. In fact, I’ll probably see him in
about a week; Maria Spiropulu has organized this “Physics of the Universe Conference” again
this year.
ASPATURIAN: Here on campus or off-site?
TOMBRELLO: It will be one day at SpaceX and one day here.
ASPATURIAN: SpaceX being?
TOMBRELLO: Space Exploration Technologies; it’s owned or run, founded by Elon Musk. In the
last year it has successfully launched two million-pound thrust rockets—the Falcon 9s. NASA is
now becoming a big contractor with it, and it fits President Obama’s paradigm, which was
maybe we can go to private companies to supply services in the big rocket business. The
president loves Elon Musk, and he should. Elon is a very interesting model for the future of
industrial growth in the country, between SpaceX and Tesla Motors, and of course SolarCity—
the company that installs solar cell systems on houses and businesses. I think it’s a business
model that people should not ignore.
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