BY MILA JASPER
The Defense Advanced Research Projects Agency is formalizing and expanding a pilot program that connects its research teams to business expertise to help take technologies out of the lab and into production.
In a partnership with nonprofit venture capital firm In-Q-Tel, the Embedded Entrepreneurship Initiative will provide 150 DARPA research teams with funds to hire business executives to develop go-to-market strategies, commercialization mentors and engagement with a DARPA working group stacked with corporate investors over the next five years.
The EEI pilot program kicked off two years ago because DARPA sees the development of its projects—for technologies like 5G and 6G telecommunications, infectious disease therapeutics and diagnostics, microelectronics, and artificial intelligence—as foundational for U.S. military and economic power in the next century, Kacy Gerst, DARPA’s chief of commercial strategy, told Nextgov. The ultimate goal of the program is to help research teams create dual-use, go-to-market strategies for both defense and commercial markets.
“More and more DARPA is investing in spaces that have a massive commercial market and a small defense market, like for example, microelectronics and biotechnology,” Gerst said. “If we want the [Defense Department]DOD to be able to use these technologies in the future, they need to be sitting within sustainable businesses.”
EEI targets two specific challenges related to development and adoption of these technologies, she said. DARPA research teams are technical, filled with skilled scientists and engineers focused on developing technology. Gerst said they often struggle to figure out how to take their technology to market because they lack business experience—as well as connection to investors.
The existence of foreign adversarial investments layers on top of this challenge. Gerst said foreign investors have been aggressively targeting early-stage research teams “often while they’re still in the lab or the university” in order to gain access to the intellectual property.
“So there's kind of this dual problem where we have highly technical teams that are having difficulty raising U.S. funding to take their technology forward but they're being offered fairly easy to secure foreign funding,” Gerst said. “We need to help them with an alternative there.”
While the Committee on Foreign Investment in the United States, or CFIUS, and the Foreign Investment Risk Review Modernization Act, or FIRRMA, help protect against adversarial investments, Gerst said DARPA wanted to approach the problem set proactively.
“We're looking at our portfolio at DARPA and thinking, you know we have one of the most incredible innovation engines in the country, and the U.S. still has the strongest venture capital ecosystem in the world, and we need to couple those two together to move forward,” Gerst said.
So far, the EEI program has helped raise over $100 million in U.S.-only investment as well as stand up a dozen new companies, according to the press release announcing the program’s expansion.
“By working with IQT Emerge, scientists in DARPA's Embedded Entrepreneurship Initiative will gain access to strategic business and product development insights that help them move their innovations from early research to commercial use,” Simon Davidson, executive vice president for IQT Emerge, a new effort within In-Q-Tel working on the EEI project, said in the press release. “We're excited about our partnership with DARPA which we believe will contribute greatly to U.S. national security.”
The Defense Department recently stood up another effort aimed at solving the same adversarial capital problem. DOD announced in January the establishment of its Trusted Capital marketplace which functions like a “speed dating app” connecting trusted financial institutions with companies developing critical capabilities.
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