The 3 Types of Companies Government Should Support
If you're not in one of these three buckets, it'll be hard to work with or get funding from government
Venture capitalists are becoming increasingly invested in a more collaborative future with government. As this wave continues to build, I’ve been thinking a lot about the types of companies that will be most successful in this future. Figuring that out requires asking the question, “what is government’s role is in funding, supporting, and in many cases, regulating startups?”
I think we can break down what governments should be investing in and supporting into three categories of companies:
Ones that keep us safe (Defense, Food Security, (arguably) Price Stability);
Ones that take care of those that can't care for themselves (Healthcare, Education); and
Ones that inspire their citizens and create hope for the future (Space)
It’s important to figure out which bucket you’re in if you want to sell to, work with, or are regulated by government. It helps to be in multiple buckets if you’re raising private investor capital and making yourself relevant in Washington, but it’s most critical to know which story you’re trying to tell to which stakeholder.
I’m less confident in anything that doesn’t know which bucket it falls in. The odds of poor time and resources allocation in DC increase dramatically if you don’t know what story you’re selling. Startups don’t have unlimited resources, so focus and clarity of vision are absolutely critical if you’re going to succeed in breaking down the barriers to success in a company highly dependent on government inputs. This is something we wrote about in “How to Fund a Deep Tech Startup” back in 2023.
We’re at the beginning of a wave that will require new skills and fresh thinking. Building these companies with the “lean startup” method is going to be challenging, and a government playbook has only recently started to emerge with the success of companies like Palantir and Anduril. As this knowledge base and skill set permeates the startup ecosystem, a new wave of entrepreneurs will exploit this new, collaborative opportunity with government. And if executed well, the potential for impact is massive...