The Veteran Fund Update: Q2 2023
Independence Day holds special significance for our tribe of military veterans and families. This occasion serves as a powerful reminder of The Veteran Fund's mission and the great potential we possess when we stand united together.
Many of our nation's Founding Fathers were veterans who, anchored by courage and unwavering resolve, created the United States, whose core tenants of freedom and individual liberty have unlocked human potential on a global scale.
Emboldened by this legacy, The Veteran Fund is dedicated to building a greater society by uniting and empowering the veteran community through mindful entrepreneurship. Our ambition extends beyond driving innovation and financial returns for our partners. We are committed to upholding and propagating the foundational values and liberties of our nation, aiming to empower future generations of Americans and our allies.
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”
In this spirit, we are honored to share an article written by one of our tribe members titled, “A New Tribe is Born.”
In our update below, we are excited to announce a new investment, highlight our participation in several high-profile events, and share portfolio company updates.
Let’s go!
🚀 New Investment
We are proud to welcome Proteus Space to The Veteran Fund portfolio! Proteus designs and builds ESPA-class satellites & space “buses” for commercial and government customers to help America win the new space race.
Using proprietary algorithms and a revolutionary new kind of additive manufacturing (3D printing) Proteus’ methodology rapidly automates a very human-intensive satellite design process that will deliver a 12:1 time reduction and a 4:1 cost reduction, rapidly producing satellites at scale.
The increasing demand to proliferate new technology into space is severely limited by the cost and build time, with buses in this product range typically taking ~3 years to design and build. Proteus has the mission to turn 36 months into 3 months.
Proteus is servicing both commercial customers and the largest customer in the world, the US Government, with a large pipeline of contracts. The $4M Round was led by Moonshots Capital, a partner of The Veteran Fund. Shout out to Craig Cummings and Kelly Perdew who have paved the way for veteran entrepreneurs and venture capitalists for over a decade.
Ask: Proteus is looking to expand its network in the DoD ecosystem. Please forward this to anyone in your network who might be interested in connecting with their team.
🇺🇸 Featured Limited Partner: Mike Fraser
Mike Fraser is a US Air Force veteran, exited founder, advisor, and the first Limited Partner in The Veteran Fund.
Mike sold his company, Refactr, to Sophos in 2021, where he is now their VP of DevSecOps. Mike’s journey as a founder was one of the reasons we started The Veteran Fund.
During the early years of his company, there was a lack of capital being allocated to military veteran founders at the earliest stages. Through his perseverance and leadership, he grew the company and secured contracts with government and commercial customers. After selling his company to Sophos, the first thing Mike did was commit to serving the veteran community as an investor.
Mike is a model of what the veteran entrepreneur community can do together, and we are lucky to have him on our team.
📣 Announcements
Angel Summit with Jason Calacanis: In June, General Partners Mike and Lisa represented The Veteran Fund at the Angel Summit in Napa, CA.
The event was an exclusive gathering of 120 hand-picked investors and VC fund managers from the U.S. and Canada. We discussed investment best practices and expanded our partnerships with other funds and LPs.
The Veteran Fund also got a shout-out on the top ranking, All-In Podcast! Watch Lisa ask a question for the live Q&A.
JP Morgan VetVC Summit: In June, Mike and Ryan represented The Veteran Fund at JP Morgan’s annual VetVC Summit in New York City.
Portfolio company, Instant Team’s CEO, Liza Rodewald, interviewed Jamie Dimon, Chairman and CEO of JP Morgan, and Dan D’aniello, Chairman of The Carlyle Group as the keynote event. We also spent time catching up with our Veteran VC partners and LPs including General McChrystal.
Shout out to Sherman Williams and Emily McMahan (AIN Ventures), Tim Hsia and Brendan Aronson (Context Ventures), Derren Burrell (Veteran Ventures), Dave Tompkins (550 Capital), Sean Drake (Stony Lonesome), Dan Madden (Squadra), Stephen DiBartolomeo (Scout Ventures), Lenore Karafa (First In), and George Ploss (Netsuite Accelerator). Big thanks to the JP Morgan team for another great event: Hunter Nadler, Ashley Hawkes, Rhett Jeppson, Mark Elliot, and Silvia Kleinle.
Recently-released data validates The Veteran Fund thesis by highlighting the unprecedented amount of capital invested into U.S. defense-centric startups, including new focus from industry leaders such as A16Z and Sequoia Capital: U.S. defense tech startups secured $14.5B in VC funding in Q1 2023, setting a new quarterly record. Q1's tally helped push the total funds deployed in the five months of the year over the $17B mark, more than the sum invested in the entirety of 2019.
What happened: Funding for the industry surged despite a backdrop of VC funding decline due to the global tense political landscape, reiterating the importance of defense startups. As a result, defense startups are expected to rake in a larger share of the U.S. $886B defense budget for 2024.
Where to see the impact: Institutional VCs, such as Andreessen Horowitz and Sequoia Capital, that previously shied away from defense startup deals have also begun investing in the sector. Sequoia made its first defense tech investment, leading a $5.7M seed round into Mach Industries. Andreessen Horowitz is the largest backer of Anduril Industries, a defense tech startup valued at $9B. Earlier this April, General Catalyst established a "global resilience" practice to back defense and intelligence startups.
📈 Portfolio Company Updates
Firestorm Labs has built a new category of 3D printed, fixed-wing unmanned aerial systems (UAS), which can be manufactured from base materials and deployed within 24 hours – delivering capability when and where it is needed.
Firestorm Labs was selected as part of the industry team on the $46B Eglin Wide Agile Acquisition contract to deliver next-generation munitions technologies. Read more here.
Secured a $1.6M direct-to-phase 2 contract through AFWERX with AFSOC and the Air National Guard as customers
Firestorm was featured in an article from our friends over at Arsenal of Tomorrow and a government customer has asked for an initial 20+ Firestorm systems to be fielded in an area of the world that is currently experiencing conflict.
Ask: Firestorm is actively developing its lobbyist strategy in DC. If you have recommendations of groups to vet, please introduce us.
Cyberspatial is a cybersecurity company who helps cyber practitioners save hundreds of hours of manual processes to quickly visualize and analyze the networks they serve, which can increase work efficiency by 10-100x.
Cyberspatial is starting two pilots with the US Space Force and US Army, to provide advanced network mapping and discovery capabilities for defensive cyber operations.
Cyberspatial is working on several promising commercial enterprise deals in the OT security and critical infrastructure space.
They released a new product page and new product features: http://teleseer.com
Ask: Please forward this information to any cyber practitioner in your network who may be interested in an enterprise pilot.
Lonestar is a space tech company that is building data centers and communication infrastructure on the lunar surface.
Lonestar signed a Letter of Intent with CDC Data Centers on behalf of both the Australian and New Zealand governments. The governments will be Beta Customers on the Q4 mission and exploring contracts on future missions.
Signed OMEGA as an edge processing customer
Positive meetings with the DOD and DARPA CIOs to facilitate Lonestar’s USG strategy.
Ask: Lonestar is in planning for an upcoming Series A financing. If you would like to connect with Chris Stott, Lonestar’s CEO, please reply back to this email.
Stitch3D (formerly Candelytics) is an enterprise 3D data company that delivers best-in-class 3D data analytics, workflows, and collaboration tools through its cloud-based 3D data management platform.
Completed US Air Force SBIR and STTR Phase Two R&D obligations, successfully hitting every milestone for the $1.6M award. Signed 19 organizations (32 users) to participate in a private beta.
Made several Several key hires including a 3D engineer and former lead software developer, an R&D lead for Stitch3D's mobile scanning application and senior product designer to UI/UX across web and mobile platforms.
Selected as (1) recipient for this year's MassVentures SBIR START "Stage 1" $100K award and (2) the NSA cybersecurity services program which will help bolster their data security and system infrastructure.
Ask: Stitch3D is seeking market opportunities in construction (building documentation), law enforcement (pre-incident planning and crime scene digital twin analysis), survey and engineering (3D mapping), and smart city planning.
Pixly is a Software as a Service (SaaS) technology platform for construction sites and facilities that leverages smart device photo collaboration and AI-enabled organizational tools to document project progress and mitigate risk from conflicts, delays, and safety issues.
Acquired 972 app installs and 4 new customers while creating more sales and partner opportunities.
Pixly completed the Bunker Labs Veteran In Residence (VIR) program and the PenFed Veteran Entrepreneur Investment Program (VEIP) Master class opening the door to promising investment and customer opportunities.
Released new video capture feature enabling customers to capture and upload up to 15 seconds of video (with audio) with the same power of tags, comments, and conversations.
Ask: Pixly is seeking introductions to angel investors for its seed capital raise and welcomes warm connections to building owners, architects, construction companies, and facility managers.
Clusiv is the leading technology platform that empowers blind and partially sighted people to obtain meaningful careers through digital training and employment opportunities.
Clusiv’s operational efficiency and effectiveness continue to be demonstrated by its increasing quarterly growth (revenue cycle increasing by 20 percent month over month) while significantly decreasing its state sales cycle timeline.
Currently serve as vendors in 23 states, while continuing to expand its market presence and impact.
CEO, Lukas Simianer, was selected as the Texas Business Hall of Fame recipient for the 2023 Brett Wiggs Innovative Leader Award.
Ask: Clusiv anticipates launching a $2M seed series raise and welcomes warm introductions to potential investors.
Instant Teams is the leading military spouse community and talent marketplace that leverages innovative technology and a focus on skills-based hiring to create dynamic talent and outsourcing solutions for employers and remote careers for military spouses.
Launched their “Twelve Million Plus,” mobile application, which is the first and only verified community for military spouses.
Seeking additional enterprise customers and expanding their footprint across more military installations.
Ask: Seeking additional enterprise customers and expanding their footprint across more military installations. If you’re interested in hiring a military spouse, join Instant Teams here.
📆 Upcoming Events
Founder Institute Veteran and Military Family Accelerator: The next cohort of our Veteran Startup Accelerator begins August 15th with final applications due August 6th.
Interested veteran and military spouse founders can apply and join for free through our Veteran Fund scholarships. Learn more here: fi.co/veteran
Expert Dojo and The Veteran Fund Vegas Investor Event: Join Mike, Lisa, and Expert Dojo, Southern California’s most active startup accelerator, on Friday, July 14th in Las Vegas NV for an event with investors and founders.
Veteran Entrepreneur Investment Program (VEIP): Our partners at the Penfed Foundation are launching their next cohort, August 26 - 29th. VEIP exclusively supports Veteran and milspouse entrepreneurs with highly scalable, startup companies ranging from the idea stage through to Series A and beyond. At any stage, VEIP prepares founders to fundraise, and our team brings clarity to the elusive process of accessing capital. Interested Founders can apply before July 15th
Fed Supernova: Join the Veteran Fund team at Fed Supernova, August 22 - 24th in Austin, TX. We are planning to host a special happy hour event with partner, SBIR Advisors. If you plan to attend, send us an email so we can include you in the event.
MilVet Conference: Mark your calendars for Feb 8 - 9th, 2024 in San Francisco, CA for the “must-go” to event for any founder or investor in the veteran startup ecosystem. Tickets will sell out next year, so make sure you sign up early to attend the Military Veteran Startup 2024 Conference.
In closing, we are honored to be stewards of this great community and are excited to help it flourish.
We believe that mindful veteran founders are the greatest change agent to lead our world in a positive direction. There has never been a better time to be an investor backing resilient founders building meaningful companies.
If this resonates with you, please share our one pager with anyone who supports our mission.
We are excited about the path that lies ahead and appreciate your unwavering support.
With gratitude,
Mike, Ryan, Lisa, and Justin | The Veteran Fund
