Expanding Horizons

Commercializing Defense Tech Companies

Here’s a dirty (not-so-)secret.

Venture capitalists will not invest in a company strictly to support defense.

Yes, there are investors that are motivated by a sense of patriotism and a desire to support our national security.

But that alone is insufficient. They still need to be able to provide sufficient returns to their LPs to continue in the business.

As a result, VCs are often (and rightly) concerned about scalability and growth potential.

It is possible for a defense-focused business to scale and make enough money in defense to make those returns. After all, the defense budget in the United States alone is pushing $800 billion. The defense market, however, only offers limited opportunities for such scale.

As a result, commercialization offers an attractive path for continued growth, diversifying a startups revenue streams and allowing access to a much larger commercial market.