It is not yet well known, but the aerospace sector is a rich environment for start-ups, and several key elements play a role:
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs comprise the largest source of high-risk, early stage, aerospace R&D funding in the U.S. The Federal Government currently awards $2.2 billion in SBIR/ STTR funding to small businesses each year –a large proportion of which is awarded by the Department of Defense. In 2011, Colorado ranked third in the nation for funds raised per worker from the SBIR grant program and received 149 grants totaling almost $57.2 million..
Many products developed by small businesses in the aerospace sector do not require extensive manufacturing facilities – at least during the start- up and early development phase. Often, all that is needed are lab benches and testing equipment.
The aerospace start-up’s client is frequently one of the prime aerospace/defense companies, NASA or the Department of Defense. Unlike many other sectors, there is often a paternal relationship on the part of the client towards the aerospace start-up that often manifests in favorable financial terms and on- going coaching during product development. Many aerospace start-ups are begun by engineers who have a talent for business development leading to product development sponsored by a large aerospace company. Rarely is a successful aerospace start-up initiated by a non-engineer business professional, but that too appears to be changing as aerospace technologies are being applied in dual-use “terrestrial” products markets.