Combined with short project times, ready availability of technology, rising interest and demand from retail and other industries, has made RFID based startups very attractive for Venture capitalists. Nearly two-thirds of the VC funding out of 450 deals went to IT companies.
Funding is relatively easy in RFID based solutions compared to other technologies, but it still comes with a price. In my previous posts, I had mentioned about alternate methods of funding. One such method is Federal government's SBIR funding. In very general terms, SBIR funding works as follows. Various Federal agencies release specifications of the technology to be developed and divide the complete project in three phases, which are proof of concept, prototype development and commercialization of the idea. Company gets funding for first two phases from the Federal agency and Venture capitalists may be approached for the third phase.
This type of funding gives the company freedom to be independent till the third phase of the project. Surprisingly Federal agencies have some really exciting project ideas with commercial potential.