Space VCs urge startups to pursue government contracts but stay focused on commercial success

WASHINGTON — Space technology startups should carefully weigh the risks and rewards when bidding on Small Business Innovation Research (SBIR) government contracts, a venture investor said Feb. 6 at the SmallSat Symposium in Mountain View, California.
The SBIR program provides crucial early funding for young firms, and can be a lifeline for many space entrepreneurs when they’re just getting off the ground. 
But the competitive contracts can also consume outsized time and resources, and keep many companies in a cycle of continuously chasing SBIRs and not putting enough focus on commercialization, said Timur Davis, investment director at Munich Re Ventures.
“I’d say the government is absolutely a double-edged sword, mostly on the good edge, but not always,” said Davis.
VCs that years ago were beating the “commercial is king” drum have now changed their tone as governments have taken on a major role in nurturing space technology, he said. Space startu...

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