You should not be getting downvoted. There is nothing wrong with the government taking equity (or at least dividends) in the companies it invests in that nobody else wants to. It's taking a risk. It should get a reward.
There's also the opportunity cost of the investment; the yield has to be compared to things like food stamps, education, basic research etc. There's a lot of low hanging fruit a well run government could be picking.
I would also tend towards the view that if the government invests like a VC it should take equity. If these companies genuinely have no other option, I don't see why this would be a deal killer. If they have VC they could take instead, the government shouldn't be offering free money.
The financial goals of this program shouldn’t be profit — or even break even. Any profit expectations will undermine the the way this program is evaluated.