Tapping into federal R&D engines. A core pillar of Darrow’s thesis is targeting ventures that have dual-use applications – meaning they serve both commercial markets and government needs. By aligning each startup with strategic federal innovation pathways, Darrow dramatically expands funding and growth options beyond what private capital alone can offer.
In practice, this means Darrow often chooses technology platforms that are well-suited for programs like the Small Business Innovation Research (SBIR) and STTR grants from agencies such as the NIH and DoD. These programs, dubbed “America’s Seed Fund,” invest nearly $4 billion annually in small businesses to stimulate high-tech development. Darrow’s team has built SOPs and internal processes to navigate SBIR/STTR opportunities: they continuously monitor agency research priorities and solicitations, map them against the studio’s idea pipeline, and ensure that new venture concepts intersect with areas the federal government is actively funding. For example, if the NIH announces a priority in neurodegenerative disease diagnostics, Darrow can fast-track an idea in that space or tailor an existing concept to fit the call. Similarly, if the DoD seeks AI solutions for logistics, Darrow’s ventures in applied AI can be positioned to win that contract. This systematic alignment means many Darrow startups start life with non-dilutive grant capital that validates their R&D.
Each venture’s development plan explicitly accounts for dual-use potential. Use-case duality is designed from the outset: a healthcare technology might also address battlefield medicine; a drone sensing platform might serve both agricultural firms and defense surveillance needs. This dual-use orientation not only doubles the potential customer base but also fits the mandate of SBIR programs, which require both technical merit and commercial potential . By satisfying federal R&D needs and commercial market needs simultaneously, Darrow’s companies can bridge the “valley of death” that often separates lab innovations from real-world products. Early government funding (Phase I SBIR grants typically ~$150K, Phase II ~$1M+) allows these startups to build prototypes and de-risk the technology without giving up equity. In turn, the progress made with SBIR support often attracts follow-on private investment (or larger Phase III government contracts), creating a smooth handoff from non-dilutive to dilutive funding.
Darrow’s internal processes ensure compliance and efficiency in pursuing government funding. The studio maintains boilerplate proposal materials, seasoned grant writers, and relationships with program managers. It standardizes grant accounting and reporting across its portfolio, so founders aren’t distracted by bureaucracy. By effectively productizing the SBIR application process, Darrow turns federal grants into a reliable extension of its seed capital. One venture studio focusing on defense tech, Rushlight Ventures, exemplifies this approach: it explicitly specializes in monetizing defense and dual-use intellectual property from federally sponsored research. Likewise, Darrow’s dual-use ventures are built to dovetail with government innovation initiatives, from NIH biomedical research grants to DoD technology pilot programs. This alignment yields a powerful virtuous cycle: non-dilutive funding fuels early development, which validates the venture and then unlocks larger pools of capital, all while advancing government missions. The outcome is a portfolio of startups with both robust IP and a ready-made first customer (the U.S. government), giving them a strong launchpad into broader commercial markets.