Dual-use funding supports technologies useful for both civilian and defense or security purposes. Much of deeptech sits squarely in this category, autonomous robotics, embedded AI, satellite and space systems, advanced sensing, parts of biotech, so defense agencies and security-oriented programs are a significant source of non-dilutive money for deeptech 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 deeptech 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.