Beyond Venture Capital: Exploring the Power of Non-Traditional Partnerships
This week, Hidden River Group and LeafLabs welcomed innovation specialists to a dynamic session titled Beyond Venture Capital: Non-Traditional Partnerships Driving Innovation. Held at the LeafLabs’ hard tech workspace in Cambridge, MA, and featured as part of MIT’s The Engine’s “Tough Tech” Week 2025, the event drew a vibrant mix of entrepreneurs, scientists, investors, philanthropists, and founders eager to explore alternative funding pathways.
Attendees came ready to engage in a conversation gaining momentum across the innovation landscape: how alternative partnerships, such as Small Business Innovation Research grants (SBIRs), Cooperative Research and Development Agreements (CRADAs), and Memoranda of Understanding (MOUs) are reshaping how breakthrough technologies are built.
Setting the Stage
The evening kicked off with a networking reception, where entrepreneurs, venture capital representatives, public sector employees, and Entrepreneurship Service Organizations (ESO) comingled and connected. Following the networking reception, the formal program commenced with remarks from Rhett Smith, Vice President of Operations at The Engine, who framed the conversation around the themes of “Tough Tech” week and how tough tech needs durable partnerships that don’t always come from traditional venture capital.
Defining Non-Traditional Partnerships
Acronyms can be a barrier in their own right. A few discussed at the event included the following:
Small Business Innovation Research (SBIR): A U.S. government funding program, coordinated by the Small Business Administration, intended to help certain small businesses conduct research and development
Memorandum of Understanding (MOU): A formal agreement between parties that outlines their intentions and the terms of their collaboration
Cooperative Research and Development Agreement (CRADA): A written agreement between a private company and a government agency to work together on a project
Commercial Readiness Pilot Program (CRP): A program designed to support the transition of SBIR projects to the commercialization stage
Dual-Use: Refers to goods, software, and technology that can be used for both civilian and military applications
A Panel That Delivered
Moderated by Hidden River’s Nate Stempel, the panel featured four leaders who are actively navigating these alternative funding pathways:
John Sherwood, Director of Neuroscience, LeafLabs
Henry Lee, CEO, Cultivarium
Kyle Gross, Co-Founder, Koo Capital
Samara Gordon, General Partner, Hyperplane
Each panelist shared real-world examples of how their organizations have leveraged non-traditional partnerships to unlock growth. From SBIRs serving as vehicles to allow companies to reduce costs to philanthropic funding filing critical resource gaps, the stories underscored the diversity—and viability—of non-traditional funding models.
Key Takeaways
SBIRs as Strategic Catalysts: Samara Gordon highlighted how one portfolio company used a SBIR grant to fully fund its early-stage development, bypassing traditional VC rounds. The move not only de-risked the company but opened new doors to federal collaboration
Philanthropy Filling the Gaps: Henry Lee explained how Cultivarium’s philanthropic-driven model enables progress in areas like synthetic biology and climate tech where there are long horizons to commercialization
Debt as a Tool, Not a Trap: Kyle Gross offered a fresh perspective on credit markets, showing how early-stage companies can use private financing without diluting equity. A founder should be very strategic about what types of financing they seek, for example avoid diluting your equity to buy equipment when you have cashflow to make debt payments
SBIRs in Neuroscience: John Sherwood walked through LeafLabs’ SBIR journey, from opportunity identification to compliance, illustrating how government grants can support deep science without compromising agility
Reframing Risk
The panel also tackled the topic of risk—how different funding sources assess it, and how founders should think about it. Whether it’s a VC evaluating paths to commercialization or dual-use, tougher tech, a private bank weighing risk differently from traditional equity lenders, or a philanthropic backer seeking impact, the message was consistent: understanding your partner’s incentives is key to building durable relationships.
Closing Considerations
To wrap up, each panelist offered a piece of advice to founders on what to keep in mind in a changing funding landscape. The consensus? Be bold, be strategic, be patient on your development timelines, make incremental progress, and don’t overlook the power of non-traditional partnerships that align with your goals—even if they fall outside the typical venture capital playbook.
HRG took advantage of the opportunity to launch the inaugural State of Public-Private Innovation Partnerships survey. If you are an innovator (founder, funder, government program office, R&D lab, etc.) we want to hear about your experiences working with public private collaboration.
