Silicon Valley wins few government contracts

livemint.com:

The federal government has spent $22 billion in recent years on technology from the top 100 national-security startups, a paltry portion of overall contract spending and less than half of what venture capitalists have invested in those same companies. The gap underscores the discrepancy between the surge of venture capital funding for defense technology and the U.S. government’s spending on substantial contracts to startups.

The new numbers come from a report released Thursday by Silicon Valley Defense Group, a nonprofit that started a decade ago with the aim of bringing more startup innovation to the Defense Department. According to the report, the top 100 venture capital-backed national security startups have raised a combined $53 billion in private funding since their inception, $11 billion of which has come in the past 12 months. Those same startups have collectively earned $22 billion in revenue from federal awards, $6 billion of which came from the Defense Department.

The organization ranked the startups based on head count growth, total capital raised and other factors. Traditional defense contractors receive hundreds of billions in awards every year. The continued lagging investment by the federal government in startup technologies threatens to curtail the venture-capital boom in defense tech at a crucial time for U.S.

competitiveness around warfare as the geopolitical landscape grows ever more unstable. Defense Department officials have said they want to move more swiftly and be less risk averse when adopting commercial technologies, and that their own entrenched bureaucracy can get in the way. Lawmakers have pushed the department to embrace innovation.