Commercial_Accelerators_vF_3.25.24.pdf

D A R PA C o m m e r c i a l S t r a t e g y M a r c h 2 0 2 4

COMMERCIAL

ACCELERATORS

Distribution Statement “A” (Approved for Public Release, Distribution Unlimited)

The Defense Advanced Research Projects Agency (DARPA) is seeking qualified Commercial Accelerator providers to advise and assist DARPA’s Commercial Strategy Team.

Ø Commercial Accelerators will assist in the execution of DARPA’s Embedded Entrepreneur Initiative.

Ø Each Commercial Accelerator is to provide personnel with technological and industry proficiency to conduct iterative assessments of technologies’ commercial viability and go-to-market strategies, identify entrepreneurial talent, and connect to customers and private investment capital.

Ø Multiple providers will ensure the best fit for each performer, foster competition, and infuse business development capability.

Ø For more information: go to sam.gov, click the link here, or refer to the QR code:

Commercial Strategy | Commercial Accelerators

The following slides iterate why DARPA is seeking Commercial Accelerators and where these Commercial Accelerators will fall into the broader DARPA ecosystem.

https://sam.gov/opp/7c8cc228b43549449984e52f81b52412/view

Why apply to be a DARPA Commercial Accelerator?

Becoming a DARPA Commercial Accelerator organically opens doors to strategic networks of investors, technology companies, and other stakeholders fostering collaboration and synergy in technological innovation, while benefitting from:

Operational Autonomy Attraction of Top Tier Talent Streamlined Contracting Process ü DARPA’s Commercial Accelerator offering will not impede organizations’ existing operations, allowing organizations to maintain strategic direction and focus.

ü DARPA-funded initiatives can attract top-tier talent and companies seeking collaborative opportunities, bolstering the organizations’ expertise and network.

ü Engaging with DARPA means benefiting from simplified purchasing procedures, reducing administrative burdens.

Commercial Strategy | Commercial Accelerators

The following slides will provide context around DARPA’s Embedded Entrepreneur Initiative, which falls within the portfolio of the DARPA Commercial Strategy Team.

BACKGROUND: THE EMBEDDED ENTREPRENEUR INITIATIVE

Commercial Accelerators will assist in the execution of DARPA’s Embedded Entrepreneur Initiative. Therefore, it is imperative to understand the role that the Embedded Entrepreneur Initiative plays within the broader DARPA ecosystem.

Commercial Strategy | Commercial Accelerators 4

For over 60+ years, DARPA has pivotally invested in breakthrough technologies

Computer Mouse & GUI

1960s 1970s 1980s 1990s 2000s 2010s

TCP/IP &

The Internet

Microelectronics CAD, IR, RF, MEMS

AI, Computer Vision Speech Recognition

Self-Driving Cars MRNa Vaccines

Material Science

Lithium Ion Batteries

LCD Screens DNA Sequencing Syn.

Bio

Personal Assistant Quantum Computing & Devices

Commercial Strategy | Commercial Accelerators 5

2020s

The positive impact of DARPA-technologies requires successful technology transition to the Department of Defense, the U.S. Government, Allied Partners, and the commercial sector.

FutureG and Advanced Materials

BACKGROUND: DARPA

Accelerate the commercialization of top DARPA-funded technologies

Prevent problematic foreign investment in strategic DARPA-funded technologies

Ensure that technologies developed through DARPA investment survive the “valley of death” of initial demonstrated technology readiness to availability for national and economic security deployment.

DARPA Commercial Strategy Objectives DARPA’s Commercial Strategy transitions DARPA’s R&D technology into products, services, and capabilities for both the Department of Defense and commercial markets.

Commercial Strategy | Commercial Accelerators 6

BACKGROUND: DARPA COMMERCIAL STRATEGY

DARPA Commercial Strategy’s Embedded Entrepreneur Initiative

TALENT

Embedded Entrepreneurs & Senior Commercialization Advisors

Tap into top tier commercial and entrepreneurial talent who provide training, mentoring, coaching, and deal sourcing to DARPA performers.

TECH TO MARKET

Techno-Economic Market Mapping and Financial Modeling

Identify strategies and approaches that create the highest opportunity for commercial products derived from DARPA funded technologies.

CURATED CAPITAL

Strategic Partnerships, Family Offices, Corporate Ventures

Connect DARPA-funded teams with non-adversarial private investment capital, while leverage existing regional business and economic development ecosystems.

DARPA TECHNOLOGY COMMERCIALIZATION

DARPA Program Managers Identify Strong Technical Performers for the EEI

Address and de-risk the highest market inefficiencies that prevent DARPA-funded technologies from transitioning and ensure DARPA technology is available in the future, with zero adversarial capital.

Commercial Strategy | Commercial Accelerators 7

Commercial Strategy’s Embedded Entrepreneur Initiative provides access to entrepreneurial talent, techno-economic market mapping and curated capital for DARPA technologies seeking commercial transition pathways.

BACKGROUND: THE EMBEDDED ENTREPRENEUR INITIATIVE

Ø EEI process and award are the mechanisms for identifying and establishing successful high-risk, high-payoff businesses derived from DARPA-funded technologies. The Commercial Solutions Offering is the federal award vehicle used by DARPA Commercial Strategy to enable the EEI.

Ø The EEI program is offered to DARPA performers who have demonstrated exceptional technical performance, have the desire to build products and services based on DARPA-funded technology for the open market, and are in need of focused entrepreneurial expertise to structure and scale their business while avoiding adversarial capital investment or acquisition.

Ø DARPA performers that are awarded an EEI contract receive non-dilutive award funding to hire a seasoned entrepreneur who can identify and tackle the highest commercialization risks (e.g., manufacturing, field test verification, business modeling, supply chain resiliency, regulatory strategies).

Ø Successful execution of the EEI contract is expected to enable performers and technologists to attract curated, non-adversarial capital for growth in the marketplace. This type of strategic capital is committed to both making a return-on-investment in the marketplace today while ensuring that DARPA-funded technology is made available to the DoD in the future.

Ø A link to EEI’s website can be found here, or refer to the QR code:

RESULTS*:

As of January 2024, DARPA's Commercial Strategy team had facilitated over $1B in follow-on private investment capital and M&A of DARPA technologies by U.S. corporations. EEI participants have also reported no adversarial investment.

In addition, there are 20 new products and services being developed, tested, and sold that provide new capabilities for the DOD, and create opportunities for U.S. companies competing in a global marketplace.

A Deep Dive into the Embedded Entrepreneur Initiative (EEI)

Commercial Strategy | Commercial Accelerators 8

(As of March 2024) *Only reporting publicly available data *Private investment reported per PitchBook & SCAs

Distribution Statement “A” (Approved for Public Release, Distribution Unlimited) https://eei.darpa.mil/

(As of March 2024) *Only reporting publicly available data *Private investment reported per PitchBook & SCAs

5 years ago, DARPA’s “Embedded Entrepreneur Initiative” (EEI) began The results* speak for themselves.

Private Funding Rounds Closed

$931M Private Investment

Capital Raised

$639M Total merger and acquisition value

Commercial Strategy | Commercial Accelerators 9

The following slides will contextualize where DARPA Commercial Accelerators will fall within the broader DARPA ecosystem and how they will support DARPA’s Embedded Entrepreneur Initiative.

DARPA Commercial Accelerators will exponentially expand the success of the Embedded Entrepreneur Initiative (EEI)

DARPA has already witnessed the force multiplier that occurs by partnering with multiple entrepreneurial networks, by drawing on local talent, unique regional resources, and existing alliances with Chambers, universities, labs, and companies.

Going forward, DARPA Commercial Accelerators will draw on this force multiplier effect to create an ecosystem integral to the EEI program, providing access and aligning EEI Performers’ business needs with resources available in different regions: i.e., talent, funding, location, regulatory environment, local infrastructure, and favorable market conditions.

Commercial Strategy | Commercial Accelerators 10

COMMERCIAL ACCELERATORS IN THE DARPA ECOSYSTEM

The DARPA Commercial Accelerator ecosystem is critical to the success to the EEI process, catalyzing the interactions among the Performer, Senior Commercialization Advisor (SCAs) and Embedded Entrepreneur (EEs) talent, customers, and non-adversarial capital investment communities to overcome the many barriers to success in the marketplace.

Key Players of the Embedded Entrepreneurs Initiative (EEI)

Senior Commercial Advisors (SCA)

Stakeholders in the people, process, and culture of DARPA that act as catalysts in the EEI process from start to finish. Critically, they perform a techno-economic market mapping between the current state of the Performer* and the desired, scalable, investable business outcomes of the

EEI program.

Commercial Accelerators

Commercial Accelerators are existing entities that will leverage their local ecosystem to support the

DARPA Performers* in achieving scale and market success.

The following slides will iterate on the key metrics for a successful Commercial Accelerator.

Commercial Strategy | Commercial Accelerators 11

Embedded Entrepreneurs (EEs)

EEs are experienced business leaders that complement the world-class technical capabilities of DARPA Program Managers and Performers. Successful EE candidates possess deep expertise working with start-ups, small businesses, and/or business units that are developing products for emerging commercial sectors.

The following are high-level definitions of key players in the EEI process. Click downs into the roles and responsibilities of the Senior Commercial Advisors, Embedded Entrepreneur, and DARPA Performers* and Program Managers in facilitating the EEI are available in the appendix.

The Embedded Entrepreneur Initiative (EEI)

EEI is offered to DARPA performers who have demonstrated exceptional technical performance, have the desire to build products and services based on DARPA-funded technology for the open market.

*A DARPA Performer is by definition a contractor that is under contract to DARPA to perform specific R&D related to a specific program. More information can be found here.

COMMERCIAL ACCELERATORS IN THE DARPA ECOSYSTEM

https://www.darpa.mil/attachments/DI70.pdf

Senior Commercial Advisors (SCA) Commercial Accelerators

Commercial Strategy | Commercial Accelerators 12

Embedded Entrepreneurs (EEs)

The Embedded Entrepreneur Initiative (EEI)

Goals of interfacing DARPA Commercial Accelerators and the Embedded Entrepreneurs Initiative (EEI) The combination of the Senior Commercial Advisor (SCA), the Embedded Entrepreneur (EE), and the DARPA Commercial Accelerator ecosystem work together to achieve several common goals:

Address Market Inefficiencies

Facilitate Transitions of DARPA Technologies

Avoid Investments from Adversarial Foreign Entities

COMMERCIAL ACCELERATORS IN THE DARPA ECOSYSTEM

Distribution Statement “A” (Approved for Public Release, Distribution Unlimited)

Click downs into the roles and responsibilities of the Senior Commercial Advisors, Embedded Entrepreneur, and DARPA Performers and Program Managers in facilitating the EEI are available in the appendix.

ü BUSINESS CAPABILITIES

A range of expertise and experience is required for Commercial Accelerators to succeed within the DARPA ecosystem

Commercial Strategy | Commercial Accelerators 13 v Early-stage company building, entrepreneurial training, translational research, venture investment deal sourcing, evaluation and execution of deals, and licensing agreement drafting and negotiation.

ü TECHNOLOGY TRANSITION

STRATEGIES

v Nuanced understanding of transitioning technology to government users, i.e., systems integrators, testing labs, and U.S.

Government acquisition.

v Understanding of multiple commercial industries where DARPA technologies might have uses and markets.

ü BROAD AND DEEP PRIVATE

CAPITAL NETWORKS

v Networks of early-stage high-tech private equity and VCs to source investors.

v Strategies for due diligence on potential investors that ensure technologies transitioned remain accessible for U.S. national security.

COMMERCIAL ACCELERATORS IN THE DARPA ECOSYSTEM

Key attributes of a DARPA Commercial Accelerator

Commercial Strategy | Commercial Accelerators

Ø Commercial Accelerators are existing entities that will leverage their local ecosystem to support the DARPA Performers* in achieving scale and market success.

Ø To assure success, an organization that wishes to become a DARPA Commercial Accelerator must have a demonstrated successful track record of fund raising, start-up incubations, exits to IPO, private non-adversarial capital investments, or acquisitions, have broad access to talent for SCA/EE recruitment, and have access to customers.

FUND RAISING

STARTUP INCUBATIONS

EXITS TO IPOs

ACCESS TO NON-

ADVERSARIAL CAPITAL

TOP TALENT CUSTOMER ACCESS

COMMERCIAL ACCELERATORS IN THE DARPA ECOSYSTEM

Distribution Statement “A” (Approved for Public Release, Distribution Unlimited)

*A DARPA Performer is by definition a contractor that is under contract to DARPA to perform specific R&D related to a specific program. More information can be found here.

https://www.darpa.mil/attachments/DI70.pdf

“In retrospect, I can’t help wondering what would have happened if our team, suitably augmented, had been given the responsibility for developing the business opportunity as well as the technology.”

- George H. Heilmeier, Former DARPA Director 1975-1977

Commercial Strategy | Commercial Accelerators

Do you have what it takes to be a DARPA Commercial Accelerator?

For more information go to sam.gov, click the link here, or use the QR code:

Primary Point of Contact: Dan Swart email: daniel.swart@darpa.mil phone number: 571.446.7951

COMMERCIAL ACCELERATORS IN THE DARPA ECOSYSTEM

https://sam.gov/opp/7c8cc228b43549449984e52f81b52412/view

DEFINITIONS

APPENDIX

Commercial Strategy | Commercial Accelerators 17

The Embedded Entrepreneur Initiative (EEI) Key Players The process starts when the Program Manager (PM) awards a DARPA contract to the Performer. As the performer executes the contract, developing and demonstrating the proposed technology, the PM may identify that Performer as having potential for commercial success and nominates the Performer to the CS team for an EEI award.

The following slides provide definitions of the key players in the EEI process.

Ø DARPA is a Program Manager-centric organization. As such, the focus on performance, and the pressure to move quickly on some of the most challenging technical problems in the world is very demanding on the Program Manager’s time.

Ø The Commercial Strategy process must respect the Program Manager’s challenges, both temporally and technically. As a result, SCAs demonstrate value to the Program Manager by being a force multiplier for their Performer’s understanding that Commercial Strategy’s mission is complementary to the Program Manager’s task.

DARPA Program Managers (PMs)

APPENDIX

Commercial Strategy | Commercial Accelerators 18

The Senior Commercialization Advisor (SCA) represents opportunity for the Program Manager to see their vision become reality beyond the boundaries of DARPA; to change the world, you must be in the world.

Commercial Strategy provides a proven path to move from technology demonstration to the hands of either the warfighter and civilian, or both. Moreover, the SCA facilitates this transition while simultaneously preventing those ideas from benefiting our adversaries, either militarily or economically.

Ø Senior Commercial Advisors (SCAs) are key stakeholders in the people, process, and culture of DARPA and act as catalysts in the Embedded Entrepreneur Initiative (EEI) process from start to finish. The talent of the Commercial Strategy team must match that of DARPA program managers and performers, requiring that SCAs have a combination of technical domain knowledge, business acumen, and demonstrated success in the marketplace.

Ø Critically, SCAs perform a techno-economic market mapping between the current state of the Performer and the desired, scalable, investable business outcomes of the EEI program.

Ø At each step of the EEI program. the Senior Commercial Advisor will disclose to DARPA Commercial Strategy leadership any conflicts of interest that may arise from their performing the EEI tasks for the assigned Performer. Should a COI be identified, or if DARPA Commercial Strategy leadership judges there to be a conflict of interest, the SCA will recuse themselves from the program and a new SCA will be assigned.

To date, DARPA has recruited more than 20 SCAs who are considered leaders in their respective industries and have collectively created billions of dollars in market value from technology.

SCAs currently are committing their time to work on some of the most advanced DARPA programs in the service of their country for economic and national security.

Senior Commercialization Advisors (SCAs)

APPENDIX

Commercial Strategy | Commercial Accelerators 19

Ø EEs are experienced business leaders that complement the world-class technical capabilities of DARPA Program Managers and Performers. Successful EE candidates possess deep expertise working with start-ups, small businesses, and/or business units that are developing products for emerging commercial sectors. Conversant in high-technology applications, EEs provide needed experience in various areas including, but not limited to, finance, marketing, IP and/or business development to provide assessment of commercial opportunities, competitive landscape and go-to-market plans.

Ø Embedding the entrepreneur is another key feature of the EEI program that can facilitate a change in the performer’s culture away from being a pure technology developer to a full product and service provider. Moreover, this process of technology productization and marketing often requires additional support staff and a re-organization around business metrics rather than purely technical outcomes.

Ø The entrepreneur's embedded presence in the business brings confidence and credibility to the investment community whose non-adversarial capital may be needed to scale the business and achieve commercial success.

Embedded Entrepreneurs (EEs)

Embedded Entrepreneurs change the game for commercializing DARPA technologies:

“We’ve clarified the market, what to license, how to market, what first product looks like, how to get a customer. The team was just really focused on the science. Now, we have the clarity of where the business is going. This has saved the team years.”

- Daphne Preuss, Chief Executive Officer, Suho

“As a researcher turned entrepreneur, this is an amazing program that fixes a huge gap. Many technologies die when taking them out of the lab and commercializing. iSens was able to bring in a business person, funding, and help us connect with venture capital and think through that entire process.”

- Mary Graves. Designer, iSens

APPENDIX

Commercial Strategy | Commercial Accelerators 20