Government contracts help tech startups attract VC investors

Technology startups with value to government purchasers can leverage their popularity with these buyers to secure more investment from venture capital.

Prominent tech investors focused on startups with government business

Defense and government related technology companies have in recent years received significant investment from prominent tech sector leaders including Eric Schmidt and Peter Thiel  — as well as VC firms like Andreessen Horowitz. Part of the reason for this investment attractiveness is these technologies are in-demand with government agencies and receiving regular revenue from US government contracts.

Leveraging the stability of regular government income into venture investment

One example of this trend is autonomous drone manufacturer Skydio, that sells drones to hundreds of customers in government and business. 

Recently, Skydio received a new $230 Million dollar investment to help it expand production – thanks in part to its regular revenue from its government business.  The new financing has helped give Skydio a $2.2 Billion dollar valuation.

Government contracts should be top priority for startups

As venture capital executive Gavin Mathis explains, contracts from the US government should be a top priority for startups looking for consistent revenue or non-dilutive funding. While VC firms invested $643 billion in startups in 2021 — US the federal government spends more on contracts every year (about $645.5 billion in 2021).

Startups need help navigating government contracts marketplaces

As Gavin Mathis notes, most startups struggle to secure government contracts due to their experience of how complex the procurement process is.

But startups can secure help in winning government contracts.

I help startups secure expert governmental relations advisors who can help them secure government contacts. For more information or to arrange a discussion, please contact me.

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