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Financing Advanced Manufacturing: Why VCs Aren’t the Answer - American Affairs Journal

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You have reached your limit of 1 free article this month. Please subscribe to receive unlimited access to this site. Already have an account? Sign In. American Affairs Journal I n 2013, a group of MIT researchers published a study examining the business trajectory of 150 start-up firms that grew out of technology developed at the university.1 These were production-related “hardware” firms that actually manufactured things. The firms were able to attract early stage venture capital (VC) funding. They were also able to find the advanced engineering talent required for the sophisticated manufacturing processes involved. In general, the firms were able to create prototypes of their products in the United States, and they often built U.S. pilot production facilities as well. But when it came time to “scale up” production of the most suc­cessful of these new products, and manufacture them en masse, it was another story. Most firms moved their production abroad. Al­though some medical device

Summer 2019 / Volume III, Number 2 I n 2013, a group of MIT researchers published a study examining the business trajectory of 150 start-up firms that grew out of technology developed at the university. 1 These were production-related “hardware” firms that actually manufactured things. The firms were able to attract early stage venture capital (VC) funding. They were also able to find the advanced engineering talent required for the sophisticated manufacturing processes involved. In general, the firms were able to create prototypes of their products in the United States, and they often built U

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