U.S. Space Force partners with VC firm Embedded Ventures under new R&D agreement

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The space industry used to be dominated by a single player: the US government, which contracted services for a handful of very large aerospace primes and put its technology to use in long-term, centrally managed programs. Things have developed rapidly since then. Because of an explosive technological acceleration and, in part, venture capital and private equity, the US government is one of many customers — but it doesn’t intend to be left behind.

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For this, the US Space Force’s (USSF) SpaceWERX office has partnered with an eleven-month-old venture capital firm. Embedded Ventures It aims to create research and development opportunities that can develop the domestic space economy and be used to protect the interests of the country.

This is the first time the USSF has entered into such an R&D agreement with a VC firm, called a Cooperative Research and Development Agreement (CRADA). It is also another sign that the US government is looking to benefit from venture capital practices and funding models.


CRADA is traditionally used among startups collaborating with the US Department of Defense and the government. But after a few phone calls between Embedded Ventures and government officials like Lt. Col. Walter McMillan, “the rest is history,” Embedded co-founder Jenna Bryant said in a recent interview with Nerdshala.

Embedded co-founder Jordan Nunn told Nerdshala that there are so many missed opportunities, both on the venture capital and DoD side, that this five-year partnership could help reduce that. For one, venture capital can move much more quickly than public entities. The VC also has knowledge of new and emerging technologies from which defense interests can benefit.

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Startups can also benefit from partnerships. For many young companies, working with the US government is a complex, intimidating process characterized by long contractual deadlines or highly regulated processes. Much of it comes down to education: startups making the strategic decisions that will set them up to be eligible for government contracts, and it’s there that a VC firm can help.

“There’s not a lot of positive pressure from the venture capital community to encourage these dual-use tech opportunities,” Nunn said. But such opportunities can be lucrative for companies looking to remove barriers to applying for contracts.

For Embedded’s part, they are more likely to take the risk on a company if the prospect has a larger client — the US government — on the other hand. In addition, space technologies that could play a major role, say, twenty years from now will require public-private partnerships, Nunn said, similar to how SpaceX was seeded by NASA investments.

“How did we end up in the enterprise community in an ecosystem where Silicon Valley was born to build technologies during the Cold War, and now they only make consumer apps?” nobody said. “What happened in the meantime and how do you get the ship back where there is national security relevance for Silicon Valley?”

Embedded and the USSF will meet regularly to talk progress and set benchmarks along the way. Since this is a new type of partnership under the CRADA program that does not involve any financial exchange between any entities, part of the goal is defining exactly what a successful partnership looks like, so it may be repeated in the future. can go. An Embedded spokesperson said that although there is no need for co-investment of the two entities, it could be a result of collaboration.

“People in the industry are always talking about, ‘How can we all work together, move at the pace of the enterprise,’ but no one is really doing that,” Jenna said. “What matters to me is that we do something now.”

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