Advance Market Commitments (AMCs) are an innovation funding mechanism generally used by funders who want to buy something that doesn’t quite exist yet. They are promises by a large buyer, usually a government or philanthropy, to buy something at a pre-agreed price when it has met certain standards.
The core idea behind AMCs is that funders offer a pot of money for the technology without having to make decisions about the direction innovation should take, the institutions that should work on it, or even whether the innovation is actually feasible. From the funder’s perspective it de-risks the investment, means they don’t need to create in-house expertise to analyse grants and approaches, and they don’t have to put potential grantees through due diligence and bureaucracy before they have delivered results. The downside is that it means the teams creating the technology then need to find someone else to finance their R&D.
AMCs generally work best when the desired technology is nascent but still has some details to work out. AMCs have previously been used to fund vaccines and carbon removal.
Further reading
Nan Ransohoff — How to start an advance market commitment
Chris Haley, Sam Dumitriu and Aria Babu — Procurement and Innovation
Milan Cvitkovic, Adam Marblestone, Anastasia Gamick, Henry Fingerhut, Benedict Macon-Cooney, Sam Dumitriu and Anton Howes — A New Model for Science
This entry was written by Aria Schrecker, editor at the Works in Progress Magazine. Aria was formerly the Head of Policy and the Female Founders Forum at The Entrepreneurs Network.