An increasing number of ex-military officials are becoming venture capitalists as defense tech investment hits $35 billion

The distance between Silicon Valley and the Pentagon is shrinking as venture capitalists increasingly invest in defense tech startups, turning to veterans and ex-Department of Defense officials for their expertise. Andreessen Horowitz hired Matt Shortal, an ex-fighter jet pilot, as chief of staff; Lux Capital brought on Tony Thomas, former head of U.S. Special Operations Command, as an adviser; and Shield Capital’s managing partner, Raj Shah, served in the Air Force.

Hiring ex-military personnel provides firms with a practical understanding of battlefield problems, moving beyond theoretical approaches from Silicon Valley. Ali Javaheri, PitchBook’s emerging tech analyst, emphasized this advantage.

This trend accompanies a significant surge in defense tech investments. Silicon Valley invested nearly $35 billion in defense tech startups in 2023, with over $9 billion so far this year, according to a recent PitchBook report. Notable fundraises include Shield AI’s $500 million and Anduril’s reported $1.5 billion.

Despite the promising investments, challenges remain. The Department of Defense acquisition process is described as “cumbersome,” often taking years for startups to secure contracts, which can strain their finances and delay tangible results for investors.