Something I've been contemplating regarding open source funding is that it is substantially harder to secure open source funding if you intend to build a profitable business atop the FOSS you're producing.
We did not pursue some grants ourselves because we'd been told that commercial companies are unsuitable recipients. I respect this stance and I think the instinct behind it is well-meaning, but in my opinion it produces outcomes opposite to what open source donors desire.
This reasoning seems to come from various angles. One is charitable instinct: funding should go to those who otherwise wouldn't receive it. The other is distributive: why fund work that someone else intends to monetise. Both are intuitive. But I'd argue that this creates market distortions that are suboptimal for the ecosystem we want to foster.
FOSS projects with commercial incentive are subject to falsifiable product exploration -- continuous, unforgiving feedback from users. Skin in the game. This selection pressure produces better software and products optimising for grant approval.
Bounty style funding results in even more perverse outcomes: a prize for acheiving X often results in the minimal viable X without any regard for usability, adoption or longevity. They win the prize and move on.
The current funding environment favours more hobbyist-style maintainers and well-capitalised ventures and squeezes out the middle: small commercial teams shipping FOSS, who I think may be the healthiest part of the open source ecosystem.
In Bitcoin hardware, at the extremes, "company" and "business" are even used as pejoratives, as though commercial intent is antithetical to open source values! They would argue this suspicion is founded through historical events in the industry. Perhaps, but I think is unreasonable to apply broadly.
In terms of our own work: we've delivered a substantial body of FOSS code (used by others), specification contributions, research, and industry vision, and in my (biased) opinion, the best hardware wallet in Bitcoin's existence. I can say with certainty that this output would have been faster, larger, and more impactful with funding (earlier, wen FROST?) in this middle ground between entirely donor funded FOSS and fully capitalised proprietary development.
Meritocracy works when the field is open to everyone advancing it -- including those building businesses on top of the FOSS they produce. Would be curious as to people's thoughts