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Congress should allow government labs to take an equity stake in start-ups.

A significant barrier to government labs partnering with industry is that small businesses and start-ups often are not capable of working with the labs due to the cost of procuring lab expertise and access to facilities. Yet, in many cases, even a small amount of lab interaction with a small business or start-up could greatly impact a nascent company’s growth and could be the deciding factor between a start-up failing or not. Congress could ameliorate this issue by providing the labs with the ability to take an equity stake in a start-up that is interested in utilizing lab infrastructure to advance development of its proprietary technology. One option would be to allow federal labs to trade use of lab research infrastructure for a small equity stake in start-ups under the strictest of transparency. This would be the equivalent of providing advanced lab services in lieu of payment and, in return, the labs would receive royalties once start-ups advance into the market at very little, if any, risk to the taxpayers.