Dual-use funding
Funding for technology with both civilian and defense or security applications, a large non-dilutive pool that carries export-control and ownership strings.
Dual-use funding supports technologies useful for both civilian and defense or security purposes. Because quantum technologies sit squarely in this category, sensing for navigation and detection, quantum-secure communication and key distribution, computing with cryptographic implications, defense agencies and security-oriented programs are a significant source of non-dilutive money for quantum companies. This pool is often deep and patient, funding long-horizon research that civilian markets are not yet ready to pay for, which suits the deep tech timeline well.
The trade-off is a heavier set of strings than a civilian grant carries. Accepting defense or dual-use funding can trigger export-control obligations, the technology may be classified under regimes that restrict where it can be sold and to whom; constraints on ownership and personnel, some programs limit foreign ownership, control or influence and restrict who can work on the funded effort; and government rights in the resulting intellectual property, which can include licenses for state use or step-in rights (the US calls these march-in rights; the exact mechanism varies by jurisdiction). Each of these can later interact with a fundraise (a foreign lead may be complicated by ownership rules) or a cross-border acquisition (export-controlled IP can narrow the set of eligible buyers).
For an operator the discipline is to go in with eyes open: map the obligations before signing, not after. The questions are which export-control regime applies, what ownership and hiring restrictions attach, and what rights the funder takes in the IP. Dual-use funding is genuinely valuable, often the natural home for early quantum work, but it shapes the company’s future optionality in ways a simple civilian grant does not, and those constraints belong in the data room and in the strategic plan, not as a surprise discovered during the next round’s diligence.
Quantum is inherently dual-use (sensing, secure communication, computing all have defense relevance), so defense and security agencies are a deep, patient, non-dilutive funding pool, but the strings are heavier than a civilian grant. The diligence reading: dual-use funding can bring export-control classification, restrictions on foreign ownership and on who can be hired, and sometimes government rights in the IP, each of which can shape a future fundraise or cross-border exit.
From definition to decision
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