If we see the same old story of the government claiming to support small businesses but prioritizing old incumbents, investment dollars will disappear.
For the Department of Defense to embrace the leap-ahead technologies needed to compete, Congress must use its funding power to make major players out of small, disruptive tech firms.
One would think that the role of venture capital in defense would be simple, and that firms would be lining up to invest. But in reality, that's not the case.
The Pentagon is working hard to entice small technology companies to work on defense projects, but investors that could prop up these businesses seem wary of putting forth the cash.
The Pentagon needs more venture capital firms to invest in defense projects. But a number of defense primes have their own venture funds. How does it all work together?
Tech that can be adapted from the commercial market to serve the needs of the military is core to the Defense Department's innovation strategy. But those willing to put money toward the big ideas think it’s the wrong approach.
In an exclusive interview in December, the Pentagon Chief Information Officer Dana Deasy shared his priorities and strategy reshaping defense technology.
"We talk a lot about trade war with China. There is a trade tension as well between the U.S. and our allies in Europe right now," says Trae Stephens of tech company Anduril and venture firm Founders Fund.
“I think the fundamental misunderstanding between the DoD and venture investors is just how difficult it is to keep the wheels on a fast-growing startup.”
"A lot of the VCs don’t have the same level of technical due diligence around focused aerospace technologies that we can bring," says Brian Schettler of Boeing's HorizonX venture fund.