Militaries exploring Venture Capitalism to fund Research and Development

Chinese firms have become significant investors in American start-ups working on cutting-edge technologies with potential military applications. The start-ups include companies that make rocket engines for spacecraft, sensors for autonomous navy ships, and printers that make flexible screens that could be used in fighter-plane cockpits. Many of the Chinese firms are owned by state-owned companies or have connections to Chinese leaders, as reported by Paul Mozur and Jane Perlez in New York Times.

Over all, China has been increasingly active in the American start-up world, participating in investment rounds worth $9.9 billion in 2015, according to data from the research firm CB Insights, more than four times the level the year before. Chinese investors have a bigger appetite for risk and a willingness to do deals fast, said Neurala’s chief executive, Max Versace.  American military officials have “figured out a very good way to give $10 billion to Raytheon,” he said. “But to give a start-up $1 million to develop a proof of concept? That’s still very, very hard.”