Venture Capital Concept Analysis

The Department of Homeland Securitys DHS Science and Technology ST Directorate and Private Sector Office tasked the Homeland Security Institute HSI to analyze the potential applicability of the United States Government Venture Capital USG VC models in discovering, spurring, and fostering technological innovation to meet homeland security mission needs. This 6-month study reviewed 12 existing USG VC programs, interviewed a representative group of 15 authoritative senior staff and substantive expert leaders involved with technology decisions at DHS, assessed the relative strengths and weaknesses of alternative USG VC approaches with respect to DHS needs, identified options, and provided recommendations. Based on the studys findings, the HSI team recommends that DHS establish an internal Venture Capital Exchange X-Change Office. The X-Change Office would respond in the near-term to emerging technologies in the private sector, and in the longer-term could prepare DHS to make direct equity investments. The X-Change office would create a foundation for building relationships with entrepreneurs and private venture capital firms and allow the DHS technology requirements process to mature.