Let’s kick this off by saying what this post is not – it’s not a “how to” or “basics” of STRATFI/TACFI. Those guides are everywhere, and AFWERX has got you covered on their website. Instead, this blog is a distillation of the top 5 keys you need to know and understand when deciding whether to pursue a STRATFI/TACFI with AFWERX. This list comes straight from the trenches, after successfully navigating multiple clients through the process.
Here are our top 5 keys:
1. Time to Contract Award
Strap in for the long haul – the process takes about 9 months from application submission to contract award. That’s right, 9 months. Compare that to the 75-day timeline for an Open Topic Phase II or Direct to Phase II, and you’ll understand why patience is key. Read on to key #2 to see why this takes so long.
2. The Initial STRATFI/TACFI Submission is NOT a Proposal, but an Application
Your submission to AFWERX is just the application to be considered for matching funds. Once AFWERX gives the thumbs up, they pass it to your sponsor (the Customer) who handles the actual contract. This includes sending you the Request for Proposal (RFP), negotiating the contract, and finally executing it. The timeline here varies based on the complexity of the contract, how quickly your company responds, and how much groundwork you’ve laid.
3. Matching Funds
Here’s a hard truth: securing matching funds from a Government program office for STRATFI or TACFI is tough. Budgets are locked down years in advance, so unless you’ve been in talks for months and the program office is already setting aside funds, a multi-million dollar match is unlikely. The simplest and most common route? Secure third-party funds (dilutive funding) as the matching source. See key #4 for more on this.
Pro tip – some firms use lobbyists to help secure Government matching funds. This is an expensive endeavor, so go into this with the right team and expertise.
4. Simple Agreement for Future Equity (SAFE) Notes
Raising third-party funds after your Phase II contract award date? Those can be used as your matching source for STRATFI/TACFI. Need more funds or haven’t raised at all? Consider a SAFE note from a third-party investor, making the investment contingent on AFWERX matching your STRATFI/TACFI application. This way, you negotiate better terms and only dilute equity if AFWERX says yes.
5. Government Submission Process
Surprise! Your Government Sponsor has to submit your STRATFI/TACFI application. Why? AFWERX wants to ensure your sponsor is fully committed to the project, and nothing tests commitment like a time-consuming application upload. Make sure your sponsor knows about this requirement and that it’ll take at least 1-2 hours to complete the submission.