Tech Startup Launch

The Pentagon Just Handed American Drone Startups a $1 Billion Golden Ticket On July 10, SECDEF dropped a memo that changes everything for drone manufacturers. Combined with Trump's June 6 executive order, we're witnessing the most radical shift in defense procurement since World War II. Here's what just happened:  The Pentagon ripped up years of red tape that kept innovative companies out of defense contracts. Now they're treating small drones (under 55 pounds) like ammunition - expendable, mass-produced, and urgently needed. The numbers are staggering: • Every Army squad gets attack drones by FY2026 • Production target: Millions of units annually • Weaponization approvals: Cut from years to 30 days • Battery certifications: Down to one week For companies eyeing this opportunity, here's your roadmap: Step 1: Compliance First (Immediate) Ensure NDAA compliance - zero Chinese components. Review the Blue UAS Framework. This isn't negotiable. One foreign chip kills your entire opportunity. Step 2: Prototype Fast (12-18 months) Build modular systems under 55 pounds. Think swappable payloads for ISR or strike missions. The 18 prototypes showcased on July 17 averaged 18 months of development vs. the traditional 6 years. Step 3: Get Certified (Ongoing) Apply to DIU's Blue UAS program. This is your fastest path to approved vendor status. The memo expands this list with AI-managed updates coming in 2026. Step 4: Find Your Entry Point (30-90 days) • Respond to the Army's July 8 solicitation for low-cost systems • Partner with established primes as a subcontractor • Target frontline units are now empowered to buy directly Step 5: Scale Smart (By 2026) Secure private funding. Explore DoD purchase commitments. Participate in the new drone test zones launching in 90 days. The brutal reality? We're playing catch-up. China produces 90% of commercial drones globally. But that's precisely why this opportunity exists. The Pentagon needs American manufacturers desperately. Watch for these challenges: • Supply chain constraints for non-Chinese components • Fierce competition from AeroVironment and Kratos • Higher production costs vs. Chinese competitors • Maintaining cybersecurity while moving fast Stock prices tell the story - drone companies surged 15-40% after the announcement. Private capital is flooding in. America is building a new arsenal, and drones are the foundation. If you have manufacturing capability, AI expertise, or can build at scale, this is your Manhattan Project moment. The difference? This time, we know exactly what we're building and why. The window is open. But it won't stay that way.

Thinking of entering defence? Good. But read this first, or get crushed. You’re not building a startup. You’re entering a war zone with Excel sheets instead of bullets. And here’s the first landmine: Defence doesn’t care about you. Not until you matter. And by the time you matter, it might be too late. So here’s your brutal, field-tested playbook 👇 🔻 1. Run a Dual-Use Strategy or Die Trying Don’t “pivot into defence.” Don’t “add military as a target customer.” Build something with teeth in both markets — or you’ll starve while waiting 24 months for a MoD reply. Dual-use = survival. Omni-use = dominance. 🔻 2. Your Actual Competitor? Paper. You're not fighting primes. You're fighting outdated workflows, 94-page requirement PDFs, and evaluation committees who’ve never used the tech. You’re not selling innovation. You’re selling the idea that innovation should exist. 🔻 3. Never Ask for Feedback — Ask for Budget Lines Everyone will “love” what you’re doing. They’ll invite you to panels, workshops, incubators. None of that pays your team. Ask: “Which budget pays for this in Q4?” If they can’t answer, walk. 🔻 4. Find a Uniformed Insider, or You’re Screwed No matter how good your pitch is, you need a believer inside the system. Someone who speaks procurement and can say, “This solves my mission.” Without that: enjoy limbo. 🔻 5. If You’re Not Testable, You’re Not Real Defence doesn’t buy PowerPoints. You need a testable MVP fast. No test = no traction. No traction = no procurement route. No route = you're just theatre. 🔻 6. The First Deal Will Break You It’s slow. It’s painful. It’ll take months, maybe years. But once you break the wall once, you become “pre-approved.” Then the real business begins. 🔻 7. Ignore All of This If You're Building Slideware This advice is only for builders. For founders ready to live in uncertainty, raise from niche VCs, and get 50 no’s before one test flight. If you're not all-in: stay in SaaS. This is the most misunderstood opportunity of our time. Europe is waking up. The U.S. is doubling down. And the next industrial revolution will wear camouflage. Startups who learn the terrain will dominate. Speed. Testability. Dual-use. Insider access. That’s your survival kit. Use it. #DefenceStartups #DualUse #InnovationInDefence #OmniUse #MilitaryTech #InsiderIntel #BoldMovesOnly #WakeUpEurope

A lot of people are jumping into defense tech right now. Few know this, but special forces are the beta testers of the defense industry. I used to test gear every week in Navy special warfare - and it’s a whole different world from civilian tech. Here are 4 things you should know before stepping into this space: 1. Compliance is hell. Defense systems face extreme standards - dust, heat, shock, water, electromagnetic resistance. You don’t “ship fast” in this world. You certify, test, and certify again. 2. Sales cycles are painfully long. Even with billions now flowing into defense innovation, procurement processes still follow rigid administrative rules. You need patience and a deep understanding of how armies buy. 3. No data. Most militaries won’t let you collect operational data for safety reasons. For AI startups, that means you have to get creative about training and improving your models without real-world military datasets. 4. The military breaks your product. Literally. I’ve seen hard cases thrown off ships onto rocks just to check if the gear survives. That’s “battle proofing” and it’s the real benchmark. If you want to build in defense, build tough, patient, and quietly smart. That’s the only way to last.

What sets apart the winners 🏅 in defence tech? Not the shiny popular startups getting PR but the ones getting real combat traction and end-user respect. After 400 companies screened and 12 investments, I feel like making some early conclusions. Curious to see how it changes in 5 years but for now - this is what I see in the winners vs the long tail. 👉They are in Ukraine. Not only for sales but for product development. Internationals co-create new tech and work with the locals instead of simply learning and building outside. Locals make incredible product very quickly, hand-in-hand with warfighters. 👉They are very quick to iterate, otherwise they quickly (~3 months) become obsolete or lose to competition. They are quick to roll out features and do not wait until a new system is perfect. 👉They truly work closely with the military - various units and military branches that represent the whole frontline. This creates high-quality feedback loops. Also, such teams learn to navigate the jungle quickly and tell apart signal from noise. 👉They focus on defence. No “dual use” with such a hot defence market, although nearly every company could pivot into civilian use cases if they wanted to, the tech is very much dual use by nature. 👉They self-organise into an ecosystem of products (hardware platforms, modules, software) through horizontal cooperations among companies and teams, often also including field R&D labs of military units. No government or army would do it for them. And every government and the army will benefit from a compound solution. 👉They bring a tech know-how - and are quick learners in defence. I have not run the numbers but my gut tells me that a defence background is more often detrimental to building great defence tech products. 👉They often address existing military capabilities at 10-20x lower price by using modern tech and fresh thinking. (fabulous visual by Paula Bronstein)

Some startups chase headlines. Firestorm Labs just raised $47 million and didn't blink. No big marketing blitz, no flashy photo ops, just an unapologetic move from prototype to production with the kind of composure that makes venture firms lean in, not look twice. Founded in 2022, Firestorm Labs is turning expeditionary manufacturing into a full-contact sport. Picture this: standard #shippingcontainers reimagined as rapid-response 3D print shops that churn out unmanned #aircraft systems (UAS) on-site, on-demand, and under pressure. This isn't defense innovation with a capital D, it's hardware that hits the tarmac ready. And behind this machine is a trio built for war rooms and boardrooms: CEO Dan Magy 🏴☠️, CTO Ian Muceus, and CSO Chad McCoy. Real founders. Real track records. No cosplay. Magy, fresh off the acquisition of Citadel Defense, didn't come to play. Muceus brings additive manufacturing fluency from Stratasys, and McCoy, after 23 years in Special Tactics with the United States Air Force, knows exactly what matters at the tip of the spear. That's not a founding team. That's a tactical unit. The Series A haul was led by New Enterprise Associates (NEA), with strong plays from Lockheed Martin Ventures, Decisive Point, Washington Harbour Partners LP Booz Allen Hamilton Ventures, and $12 million in venture debt via J.P. Morgan. This isn't just validation. It's ammunition. Strategic, targeted, and operationally smart. Firestorm's 14,000-square-foot HQ in San Diego isn't a showroom, it's a launchpad. Their xCell platform produces #drones in nine hours, with full assembly in 36. Cost? One-fifth of traditional methods. Speed? Ten times faster. Their flagship Tempest 50 drone weighs under 55 pounds, carries up to 10, and is ready for #ISR, #EW, or loitering munitions missions on demand. Plug it into the xCell container, and you've got a mobile air force without a logistics tail. Government's already paying attention. A $100 million IDIQ from the U.S. Air Force. Multiple SBIR wins. A seat at the $46 billion EWAAC table. Firestorm isn't pitchng ideas, they're booking orders. This round fuels what's next: scale the xCell platform, launch the El Niño system, expand headcount, and stand up new production. What Firestorm is building isn't just a manufacturing capability. It's sovereign supply chain resilience baked into steel, circuits, and code. Let's be clear, this isn't about drones. It's about turning warfighter needs into executable code, printing #hardware at the edge, and ditching dependence on fragile logistics lines. And Firestorm Labs isn't catching fire, they lit the match. #Startups #StartupFunding #VentureCapital #SeriesA #Manufacturing #ManufacturingTech #Defense #DefenseTech #DeepTech #Technology #Innovation #TechEcosystem #StartupEcosystem #Hiring #TechHiring If engineering peace of mind is what you crave, Vention is your zen.

How to Survive the Valley of Death for Defense startup? (Both European and American) The "Valley of Death" is a critical challenge for defense startups, representing the gap between initial R&D funding and sustainable revenue from defense contracts. It's particularly treacherous in the defense sector due to long procurement cycles and complex regulations. Startups must navigate three distinct parts: 1. Investment Side of the Valley 2. Middle of the Valley 3. Procurement Side of the Valley / Overcoming the Investment Side of the Valley - Focus on technologies with dual use applications to attract diverse funding sources. - Engage with end-users early to validate your solution's relevance. In the U.S., programs like AFWERX and DIU can facilitate these connections. - Use open topic solicitations! Take advantage of programs like the U.S. SBIR/STTR or the European Defence Fund's open calls for innovative solutions. - Craft pitch decks and short white papers aligned with commercial practices for quicker evaluation. - Avoid becoming a "SBIR mill": In the U.S., diversify beyond SBIR funding to demonstrate commercial viability. / Surviving the Middle of the Valley - For U.S. programs like SBIR Phase II or STRATFI, obtain support from potential military customers. - Leverage venture capital or other private funding as a bridge to complement government investment. - Consider government-backed loans. Explore options like those proposed by the U.S. Office of Strategic Capital (OSC) or the European Investment Bank's venture debt for defense and security. / Managing the Procurement Side of the Valley - Advocate for open architectures and interoperability to ease integration with existing systems. Both the U.S. DoD and European Defence Agency are prioritizing this approach. - Participate actively when defense agencies conduct market surveys. - Focus on modularity. Design your solutions to be easily upgradable and integrated into larger systems, aligning with trends like the U.S. DoD's Modular Open Systems Approach (MOSA). - Consider partnering with established defense primes to access larger contracts. In Europe, initiatives like the EDIDP (European Defence Industrial Development Programme) encourage such collaborations. Remember, success in defense requires persistence and adaptability. By understanding and strategically approaching each stage of the Valley of Death, startups can increase their chances of emerging as key players in the defense innovation ecosystem. Please hit like and leave a comment if you found this post useful. I’m currently exploring new opportunities in the defense space. If you’re working on something extraordinary, let’s connect and discuss collaboration opportunities! 🤝 P.S Picture is taken from Pete Modigliani #defensetech #miltech #defense

Defense Tech Is Booming. But Are You Really Defense-Ready? Can a Startup or Scale-Up Succeed in the Defense Market? Are you making the right investments? The defense market is very hot for entrepreneurs, but it is not for the faint-hearted. Long procurement cycles, complex requirements, and a demanding end-user environment make it very different from the commercial tech world. Over the years, I’ve found that asking the right questions early helps identify whether a company truly has a viable defense solution, or whether it’s not a good fit. Here’s my list of questions I use to assess defense market readiness 👇 🔍 Problem & User Validation - Which specific problem is your solution solving? - Did you confirm the need and requirements with active military personnel? - Did you develop your solution using constant feedback loops with active military end users? - Did you test your solution in a real military environment under realistic operational conditions? 🔐 Security & Compliance - Do you and your team members hold the necessary security clearances? - Does your solution comply with military or NATO standards (e.g., MIL-STD, STANAG)? - Have you assessed export control implications (ITAR, EAR, EU dual-use regulations)? - How do you handle sensitive or classified data? ⚙️ Technology Readiness - What Technology Readiness Level (TRL) is your solution currently at? - Is your technology dual-use, or designed specifically for defense? - Have you conducted cybersecurity or resilience testing against defense-grade threats? - Can your solution integrate with existing defense systems or networks? 🧭 Operational Understanding - Do you understand the environment your solution will operate in (battlefield, naval, air, cyber, logistics)? - How does your solution reduce risk or improve mission effectiveness for defense users? - Can your product operate in austere or hostile environments? 💼 Business & Procurement Readiness - Are you familiar with defense acquisition processes and long sales cycles? - Do you have contacts with military procurement experts or primes? - Have you engaged with defense innovation programs (e.g., DIU, AFWERX, DASA, DIANA, EDF)? - Can you run proof of concepts or demos without initial payment? - Can your company survive at least a year without being paid? 🧠 Team & Strategy - Does your team include people with defense or security backgrounds? - Do you have advisors who understand defense procurement? - How will you scale production and support if adoption occurs? - Have you considered ethical or reputational risks of operating in defense? - What’s your long-term vision in the defense sector? ✅ If a startup can confidently answer most of these questions, they’re probably on the right track to becoming a trusted defense partner. Nobody said it was easy. It is a passion. It is a mission. This is M6. Close Down Net.

Defense tech startups make mistakes by relying on funding more than long-term contracts. Since 2022, I’ve been advising a few defense tech/dual-use teams in business development, funding, and scaling. 99% of them came to me saying, “Dima, we need your help to attract funding.” But in most cases, this strategy isn’t working Yes, the war in Ukraine has certainly raised the interest of VC firms and governmental funds in defense tech. But actual investments remain limited, with a slight decline from 2022 to 2023 (according to Sifted). Overhyped, much needed on the battlefield, but underinvested. And here is why. Defense or dual-use technologies require significant investment in R&D, a deep understanding of national security and intellectual property (IP), rules of export control, ITAR regulations, and their future value applications. Additionally, these companies exist in a highly competitive market with the most classified contracts. This means they need endless cash flow, face unpredictable scaling, and have limited exit opportunities (like acquisitions or public offerings). Not the best choice for a VC who’s never been there. The other side of the game is that funding alone doesn't solve the startups’ goal here. Are you fundraising to scale production? Where will you distribute the outcomes? Do you need money for client acquisition? How do you approach GTM in different geos? Under which principles? No amount of money will introduce you to defense institutions and government agencies. Think of defense tech startups as B2B enterprise solutions. 1/ Understand the ecosystem and secure government support: Those could be government grants, and specific funds that have a history of investing in defense tech. Examples include the NATO Innovation Fund and the European Investment Fund. 2/ Think about international distribution: Establish relationships with stakeholders in the defense sector, including government agencies, military officials, and industry experts. Look for countries that have a history of territorial disputes. 3/ Hire industry experts: Assemble a team with experience in the defense sector, including former military personnel, defense contractors, and regulatory experts. 4/ Be prepared for a joint long-term contract: This implies sharing managed services, your technology, expertise and time in order to get necessary support and entrance to market. Innovation is core in the current geopolitical environment and how the economy of war has changed. But the form of innovation depends on the needs of a specific region, industry, and their challenges for either 1-2 years or usually in a strategic 5-15 years horizon. However, to work on any strategy, you have to be aligned with those 4 points above.

WIN IN DEFENSE AS A SMALL BUSINESS: There’s a 1-2-3 Playbook with SBIR/STTR + TACFI + STRATFI If you lead a startup or small business with serious tech, DoD is actively looking for companies like yours, via a funded, fast-track path. It's called SBIR/STTR → TACFI → STRATFI — a 3-stage launchpad from idea to impact, with up to $15M+ in non-dilutive funding available. >>>>>> STEP 1 <<<<<< SBIR/STTR: The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are the DoD's way of injecting small-business innovation into military capability. - Phase I: Up to $250K to prove your idea works. - Phase II: Up to $1.5M to build and demo your prototype. - STTR: Similar, but with a required university or research partner. Why it exists: SBIR/STTR brings startups, labs, and founders into the fight — on equal footing. Several entry points across DoD: 1. AFWERX (USAF) and SpaceWERX (USSF) – open topics, fast timelines 2. Army Applications Lab (AAL) – warfighter challenges 3. NavalX / ONR Tech Bridges – regional innovation 4. SOFWERX (SOCOM) – fast moves, no fluff 5. DIU, DARPA, MDA – for deep tech or dual-use EXAMPLE: Anduril got early federal funding to develop autonomous surveillance towers — now an $8B juggernaut and growing. >>>>>> STEP 2 <<<<<< TACFI. Tactical Funding Increase (TACFI) gives up to $1.7M (plus match) to field-test your tech with real military users. Requires SBIR/STTR Phase II as a base. Needs a match — either 1:1 private or 2:1 government funds. Meant to bridge the ‘valley of death’ between demo and deployment. Why it exists: TACFI co-funds the risk so you can get the data, feedback, and real-world traction you need to move forward. EXAMPLE: Resilient Lifescience used TACFI to field a wearable opioid reversal device with USAF and special ops medics — now on track for bigger DoD medical impact. >>>>>> STEP 3 <<<<<< STRATFI. Strategic Funding Increase (STRATFI) gives up to $15M in DoD funding, with heavy matching, to take your tech into programs of record, procurement pipelines, and national impact. Built for Phase II SBIR/STTR projects with strategic relevance. Requires big buy-in: government stakeholders, primes, and/or investors. Opens the door to multi-year, DoD-wide adoption. Why it exists: STRATFI gives decision-makers a way to bet big on proven innovation — not just test it, but buy it, integrate it, and scale it. EXAMPLE: Shield AI started with a small SBIR for autonomous drone AI. Now they serve the Navy, SOCOM, and more — raising $500M+ in private capital and hitting a $2.5B+ valuation. >>>>>> NEXT STEPS <<<<<< Apply to DoD SBIR/STTR: DODSBIRSTTR . MIL www.dodsbirsttr.mil IMAGE: Anduril’s MENACE-X with USMC. DISCLAIMER: This post is for information only and not a solicitation or offer. All views my own. #SBIR #STTR #TACFI #STRATFI Anduril Shield AI #SmallBusiness #DefenseTech #StartupToScaleup #AFWERX #NavalX #SOFWERX #DIU #DualUseTech

Maggie G. at Shield Capital and Gleb Shevchuk at drone startup Neros Technologies, provide an eye-opening and informative case study of what it takes to build hardware for DoD. Neros is one of the platforms on the Defense Innovation Unit (DIU)'s Blue UAS list, a vetted list of commercial drone platforms that meet the DoD's cybersecurity, supply chain, and operational standards. Basically, compliance with NDAA standards required Neros to design nearly all its own components. "During the first month or so of Neros, like a lot of others in the FPV drone world, started by using off-the-shelf components, many of which were built around cheap, widely available Chinese electronics. But it quickly became obvious that if we wanted to meet the NDAA's compliance standards, we'd have to rip most of those Chinese made components out and start from scratch." Actually, being on the Blue UAS List still doesn't mean that nothing comes from China, because some components are impossible to source outside China. This includes motors, cameras, as well as carbon fiber frames. Another challenge is hardening & testing. "Hardware systems need to reliably work even after being dropped out of an airplane, deployed in the middle of a rainstorm or sandstorm, or jammed with enemy electronic warfare devices, and that takes a lot of testing." Also, "MIL-SPEC standards were developed for large, multi billion-dollar weapon systems that are too important and expensive to lose. FPV drones, in contrast, cost less than $5000 and don't need to last 10 years. They don't even need to survive their mission. That shift in mindset hasn't caught up across the board, and it's part of the reason why DoD procurement is still slow and expensive." It's easy to underestimate these very real obstacles. In addition to those above, the article details further challenges of Electronic Warfare Hardening and Integration & Modularity. All of these have a direct impact on supply chain, cost, performance, and manufacturability for defense tech startups. https://lnkd.in/emhB5tBA #defensetech #UAV #drones #defenseindustry #defensemanufacturing #defenseinnovation