This is a subject I am deeply involved in. This is a rough explanation.

How do we re-envision the role of Venture Capital in the Natsec Innovation and Defense tech?

Traditional Venture Capital firms to fund investment in deep technology and R&D is at a crossroads. These firms, MIA after decades of investing in D2C, B2B SaaS, convenience tech with low initial capex models with "scalable hockey stick growth) do not have a culture that pursues long-term bets outside their comfort zone.

This primary private source of capital stopped playing its traditional role of risk-takers in investment, and their complicity in the Valley of Death is substantial. The U.S. is using policy to resurrect their engagement

The government has established numerous initiatives to stimulate venture investment in NatSec and Critical/Deeptech.

The Office of Strategic Capital (OSC), and the National Security Innovation Capital (NSIC) have provided two examples of these efforts.

One program by the OSC is incentivizing traditional venture firms to invest in Critical Technologies, through certifying SBICs (small business investment companies) which will receive $2 for every $1 invested in DeepTech. These SBICs are essentially traditional VC funds.

The program is in its infancy, but we see VC funds that previously had no appetite to invest in critical technology for the national interest, (but love to invest millions in IoT Juicing machines) begin to posture themselves as veteran defense tech investors.

Are they qualified investors we should rely on for investment? Recent history has shown they might not be, but they do have their place.

What other serious alternatives are there? I propose a few that should and must be a part of any private capital solution to solve the Valley of Death.

Look at a quick draft outline below for what I propose.