US citizens should be heartened when judicious and productive use of government funds help launch key and essential business enterprises. During the last two years, the National Science Foundation has turned an eye to increasing the commercialization of academic research. A torrent of new programs, especially those put forth by the TIP directorate, show a different and distant vision of how grant (read taxpayer’s money) awards should be pragmatically employed. Successful new companies spawned by these new initiatives are sure to check many of the right boxes. Providing family sustaining jobs, creating geographical economic diversity, and decreasing the country’s dependence on vulnerable foreign supply chains of key technology products can all be achieved.
The segment of the CHIPS and Science Act which established the Technology, Innovation, and Partnerships directorate (TIP) under the direction of Erwin Gianchandani, has such potential. Last year’s announcement that “it will strengthen commercialization of research and technology” is exactly what America needs. Taxpayers should be all in on the intense focus and mandates to increase the commercialization of academic research. After all, each year tens of billions of dollars of taxpayer funds provide up to 60% of higher ed research budgets in the form of grants. As stewards of these funds agencies hold incredible tools to provide early stimulus to potential founders and latent startups. There are plenty of fledging entrepreneurs waiting to emerge from the nation’s university research and institute centers. Pure Green Cement, L3C believes that the market can also play a larger role and force in directing academic research. Government agencies that facilitate a Public Private Partnership dynamic would be on target.
There are other components that aid the lofty goals of NSF’s TIP directorate. Financial structures that feature blended and catalytic capital can provide both runway and leverage. As a non-dilutive funding source, a government grant is an essential linchpin to a meaningful multiplier.
No sector relishes non-dilutive capital like the Venture Capitalists. While the trifecta of shocks from FTX, SVB and rising interest rates are still abating, the Venture Capital community would be well advised to heed the development of TIP’s ambitious initiatives. The directorate’s commitment to seeding regional economic engines will sweeten a recipe and offer VCs the nourishment of non-dilutive funding and early high potential deal flow.
Likewise, private foundations will have a chance to heighten the odds that their largesse will have increased and quantifiable impact. Pure Green Cement, L3C is encouraged when reasonable risk is ushered along with optimism. Both appear to be realistic and genuine. Accordingly, it is a welcome view that blended capital and impact investing are being facilitated by our stewards of government funding.