Some schools are really good about this. CMU for example is extremely flexible, even with patents. But I'd also recommend looking at the terms of the contract

Some schools are really good about this. CMU for example is extremely flexible, even with patents. But I'd also recommend looking at the terms of the contract that gave you funding. Government funded projects usually include government purpose rights. It depends on the contract how bad the rights are for a company. In most cases, government funding means that in a pinch, they can take all your tech and give it to another company to mass produce. The reason would probably be some wartime situation where you needed to produce a million X to fight. I think this happened to B52s in WWII. Other recommendations about tech transfer are spot on. You should also take this as an opportunity to network with potential investors. Go to your school's entrepreneurship center (if they have one), and talk to people there about your plans. I know for CMU, you can meet lots of Angels that way. Lots of the associated companies have probably gone through the same process.