Space Force Partners with Embedded Ventures for R&D

A Shift in the Space Industry Landscape

Historically, the U.S. government held a dominant position in the space sector, relying on large aerospace companies through long-term, centrally planned programs. However, this dynamic is undergoing a significant transformation. Rapid advancements in technology, coupled with increased venture capital and private equity investment, have diversified the customer base, with the U.S. government now representing just one of many clients.

SpaceWERX and Embedded Ventures Forge a New Partnership

Recognizing this evolving landscape, the U.S. Space Force (USSF), through its SpaceWERX office, has established a collaborative relationship with Embedded Ventures, a venture capital firm founded just eleven months ago. This partnership aims to foster research and development initiatives that will simultaneously bolster the U.S. space economy and safeguard national security interests.

A First-of-its-Kind Agreement

This collaboration marks the inaugural instance of the USSF entering into a Cooperative Research and Development Agreement (CRADA) with a venture capital firm. It further demonstrates the government’s intent to leverage the agility and funding mechanisms characteristic of the venture capital model.

The Genesis of the CRADA

CRADAs are conventionally utilized for collaborations between the Department of Defense and startups. The concept of pursuing this specific CRADA was initially proposed by Mandy Vaughn, a recent operating partner at the fund, as shared by Embedded co-founder Jenna Bryant. Following discussions with government officials, including Lieutenant Colonel Walter McMillan, the agreement quickly materialized.

Bridging the Gap Between Venture Capital and Defense

Embedded co-founder Jordan Noone highlighted the potential for this five-year partnership to address existing inefficiencies in both the venture capital and defense sectors. Venture capital firms are known for their speed and their ability to identify emerging technologies that could benefit defense applications.

Benefits for Startups

Startups stand to gain significantly from this partnership. Navigating the complexities of working with the U.S. government can be daunting for young companies, often involving lengthy contract negotiations and stringent regulations. A key aspect of this collaboration will be providing guidance to startups on strategically positioning themselves for government contracts.

Incentivizing Dual-Use Technology

“Currently, there’s limited encouragement within the venture capital community to pursue technologies with both commercial and defense applications,” Noone stated. However, these dual-use opportunities can be highly profitable for companies willing to navigate the associated challenges.

Reduced Risk and Long-Term Vision

Embedded Ventures is more inclined to invest in companies with the potential to secure a substantial customer – the U.S. government. Furthermore, Noone believes that future pivotal space technologies will likely require public-private partnerships, mirroring the early support NASA provided to SpaceX.

Reclaiming National Security Relevance in Silicon Valley

Noone questioned the shift in Silicon Valley’s focus, asking, “How did we arrive at a situation where, during the Cold War, Silicon Valley emerged as a hub for groundbreaking technologies, only to now primarily develop consumer applications?” He emphasized the need to redirect innovation towards areas of national security importance.

Defining Success and Future Replication

Embedded and the USSF will engage in regular meetings to monitor progress and establish key performance indicators. As this represents a novel type of CRADA partnership – involving no direct financial exchange – a primary objective is to define the criteria for a successful collaboration, enabling its potential replication in the future. While co-investment isn't mandated, it remains a possible outcome of this partnership.

A Call to Action

“There’s a lot of discussion about improving collaboration and accelerating processes, but very little actual implementation,” Bryant observed. “It’s crucial that we take concrete action now.”

This article has been updated to provide additional details regarding the CRADA between the USSF and Embedded Ventures.