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Title: Department of Defense Emerging Technology Strategy: A Venture Capital Perspective
Authors: James Cross
Keywords: Venture Funding Flows
Venture Backed
Venture Funding
Venture Capital
Issue Date: 13-May-2019
Publisher: Acquisition Research Program
Citation: Published--Unlimited Distribution
Series/Report no.: Acquisition Management
Abstract: The purpose of this paper is to assess the DoD's efforts to access new sources of innovation through engagement with venture-backed emerging technology companies by analyzing dual use venture funding flows. The intended audience is threefold: DoD innovation policy makers, members of innovation units deployed to emerging tech ecosystems, and their overseers and financial backers in Congress. The first section analyzes five years of dual use venture funding activity. The encouraging conclusion is that, at least on the surface, DoD efforts have been successful: Venture funding to dual use companies the last five years has tripled from around $5 billion to nearly $15 billion. However, a deeper look shows that the DoD overly focuses on the Early Stage segment of the market. The corresponding geographic analysis of venture flows in 2018 also shows an incomprehensible lack of engagement in Silicon Valley. The second section lays out a multi-stage throughput model for dual use venture activity. A better familiarization by innovation leaders will effectively calibrate policy, capital, and personnel to the venture market, driving stronger outcomes for the warfighter. The third section offers a set of metrics detailed at each VC funding stage to assess the effectiveness of DoD innovation engagement.
Description: Acquisition Management / Defense Acquisition Community Contributor
Appears in Collections:Annual Acquisition Research Symposium Proceedings & Presentations

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