And why should mla48 get any equity in exchange for government grants, exactly? That phrasing strikes me as misleading.

Why do drug companies get patent protection on govn't funded research?

(This is something that's been discussed more than once here, I'm putting it out there as a comparison, not an answer.)

Mla48 isn't the creator. They're a middleman between the company and te money. It's not a direct comparison with drug manufacturers. in terms of patent protection, how much can of the drug does the government actually fund? The drug company is still assuming risk by developing the drug despite some grant funding. What I would suggest is that grant-funded research include a provision that the drug be provided at cost to the government if it were successful. This would allow the company to profit privately but it would also benefit the public. This would actually work as a clever disincentive to reduce the reliance on government money and thus resulting in an opportunity to lower taxes. I don't want to pay taxes for Merck to make a billion dollar drug. Merck can assume that risk themselves. However many of the government programs are for Orphan drugs which would not have been produced otherwise. These drugs typically result in no or minimal profit to the manufacturer, thus a need for government help. Patent protection is essential for these drugs: if you patient population is 500; if someone steals your drug, you have still lost money despite the government assistance. Grants don't cover the full cost of drugs or research, thus a patent is important ther wise drug companies would not assume the finial risk for a reward that would be immediately eliminated. You'd have drug vultures: companies that would wait until someone else does all the work, then they swoop in and manufacturer and market the drug. Imagine if Stephen King had no copyright protection; he would not have had a career writing books; he'd probably be teaching English at some small New England prep school instead of entertaining millions.

I would assume it varies based on valuation.

So they get equity in exchange for gov't supplied money? Sounds shady.

See kitcar's answer. Sounds like the govt might pitch half and the investors the other.

It would definitely be more honest to have this on their site. That certainly shouldn't be worth more than a few percent.