WASHINGTON — Two months into its existence, the Department of Defense’s Office of Strategic Capital (OSC) is looking at ways to increase capital flows and market participation in deep technology areas such as artificial intelligence, biotechnology and quantum computing. and is formulating its first investment strategy. ‘ said the office director today.
“How do we give these tech entrepreneurs a chance to implement their ideas? [science and technology] Products and services that not only support our national security mission, but also support greater economic prosperity?” says so. “Well, the Office of Strategic Capital is investigating two new strategies to help coordinate and scale private investment to support national security.”
These two strategies are syndication and the government Rathje says: “We just partner with private capital providers to co-invest in new technology initiatives and help them scale their businesses in the same way we help them scale their technology.”
“Use this initiative to change the economics of investing in profound technology areas,” said Rathje. “Fundamentally, what leverage does is lower the cost of capital, allowing retail investors to make the necessary patient capital expenditures at the scale needed to invest in deep technology companies.”
The Department of Defense established the OSC last December, “Death Valley,” Department of Defense Fails to Translate Innovative Technologies into Real Record Programs by Developing and Implementing a “Proven Partner Strategy to Shape and Scale Investments in Critical Technologies” if memoAlthough the OSC and the Defense Innovation Commission are two separate organizations, they share a similar focus of leveraging private industry to foster innovation within the sector.
“The OSC was fundamentally founded to provide the Department of Defense with new tools in the current race. Today, the United States … joins the global race to become the world leader in emerging and critical technologies. Because we are doing it,” Rathje said. “Technologies like semiconductors, advanced materials and biotechnology are as important as we think defense technologies like hypersonics and directed energy are. technical field. [science and technology] Funding… Winning this race is really important for national security and economic prosperity. ”
In December, the Office launched its first program activity, the Small Business Investment Corporation’s (SBIC) Critical Technology Initiative, through a partnership between the Office and the Small Business Administration. Rathje said the SBIC program has already helped create new investment opportunities for early-stage deep his technology companies.
“Today, the way this program works is by leveraging what is called the Federal Credit Program … It is important that other ministries and agencies use government loans and loan guarantees to increase investment. We are increasing the use of what we consider to be technical and social sectors,” he said.
The OSC hopes to start applying for the SBIC initiative by this summer and to “approve the first round of funding” for the program this year, Rathje added. The office will also publish its first investment strategy evaluating key technology areas for “capital availability and liquidity opportunities.”
“So this really helps to tip and signal those tools to invest in areas of the tech sector that need this source the most,” he said.