Venture Capital and Strategic Investment for Government Mission Capabilities

This RAND Corporation research report examines government strategic investment (GSI) initiatives aimed at developing new capabilities for government missions. It analyzes three specific cases: In-Q-Tel, Rosettex Technology and Ventures Group, and OnPoint Technologies, which are government-chartered or operate under contract, differing from traditional private venture capital by prioritizing mission-oriented innovation over purely financial returns. The report also employs an economic model to understand the incentives GSI initiatives can use to encourage private companies to adapt their innovations for government needs, highlighting the role of "Other Transaction" authority in providing flexibility. The research offers insights into the design and management of future GSI initiatives, considering factors like the balance between equity investment and contractual support based on the likelihood of product sales to government and private sectors.