[deddy]

Currently VC backed companies are barred from competing on SBIRs. There is legislation currently in the works to change that. But gov funding isn’t more common currently because you legally can’t do it.

Edit: I need to amend that to say majority-VC backed companies can’t be awarded SBIRs:

Source: https://www.fedscoop.com/sbir-dod-legislation-mac-thornberry...

[chatmasta]

> In 2003, courts ruled companies with more than 50 percent venture capital ownership are ineligible for SBIR grants.

This seems like it would be a rare case, especially early in a company's lifecycle. Any company that is majority owned by VCs is either very late stage, or suffered a down round. Nobody is raising Series A or B while giving away more than 50% of their company to investors.