Discussing the Role of VC in the Department of Defense with Colonel Obergfell
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At Intel Capital, we’re inspired to launch this newsletter to help focus the capabilities we, the venture capital arm of Intel, can provide mission-focused stakeholders to achieve better outcomes. The venture ecosystem is a powerful ally to the US Public Sector, and one with tremendous potential that is just starting to scratch the surface. We’re excited to embark on this journey of discovering and delivering leading technology together. We understand that we are only a piece of the puzzle; but, we’re excited to offer our support and act as a force multiplier toward the goal of achieving technology leadership.
We hope to discover your key challenges, understand the problems you’re looking to solve, and leave you feeling inspired.
We wouldn’t describe ourselves as a ‘defense tech’ investor, but rather we are in the business of investing in companies driving the future of compute forward. Compute is at the heart of any critical technology vital to maintaining the United States national security, whether that is a weapons system, communications network, cyber defense, and beyond. Technology is a key difference maker in this competition and requires partnership to maximize the results. The time is now to focus our expertise and network on partnering effectively to deliver leadership, especially across these critical technology areas:
- Advanced Computing & Software
- Sensing, Connectivity & Security
- Semiconductors & Microelectronics
- Advanced Materials & Manufacturing
- MedTech
We’ve had a rich history of investing in leading technology companies that have achieved product mission fit. For over 32 years, Intel Capital has been a leading global venture capital firm, investing $20B+ in these types of technologies. Examples include Red Hat, VMWare, Elastic, Carbon Black (acq by VMW), MongoDB, Nuance (acq by MSFT), ForeScout, Mellanox (acq by NVDA), MySQL (acq by ORCL), ZeroFox, Spot (acq by NTAP), Box, and Switch. In our portfolio today, there are more than 50 companies currently delivering, or with future plans to deliver, mission outcomes.
Let’s connect and discover the possibilities. We are excited to enable the way you can leverage innovative technology companies to provide solutions for the warfighter.
- Matt Stone, Intel Capital Head of Public Sector Portfolio Development
A Word with Colonel Eric Obergfell
Q: Why is it important for the DoD to lean in with successful commercial technology vendors?
A: DoD simply does not have enough funding to develop all technologies required for the defense of our nation. Therefore, we must clearly signal to industry our specific interests to incentivize their investments in technology development with application to military capabilities. As we communicate our interest areas, we must create opportunities for small and medium size companies to win production contracts through prototype development/fly-offs combined with proposals evaluating schedule, pricing and data rights.
Q: Why is VC important for the DoD? How do you think both can benefit from these partnerships?
A: The value of venture for DoD is financial leverage to bring capabilities to bear quicker at scale. Over the past few years AF Ventures, which is a part of AFWERX, has attracted $6 in venture funding for every $1 AF invested to develop capabilities. DoD is looking to develop a broad portfolio of capabilities, many of which are dual-use. The start-ups or small companies developing many of these capabilities need significant capital to achieve technology maturity and production capability. In a dual use model, it is possible for companies to secure commercial pre-orders for items like aircraft, engines, software, etc. during initial phases of defense focused research and development which tells VCs there is solid commercial market fit therefore raises confidence in investing early until DoD can get money programmed for the further military adaption and production.
Q: How has the USAF looked to bring this expertise into the fold? Why was Intel Capital key to this?
A: The Air Force realizes that the majority of research and development in most industries is occurring in the commercial sector and Venture Capital is on the ground floor trying to find winners. We in Air Force Contracting have sought to better understand the intricacies of venture investment to help us build successful contract strategies to leverage our dollars to bring better capabilities to warfighters faster. We specifically identified Intel Capital to send an Education with Industry (EWI) Fellow to understand how a large company like Intel participates in venture.
Q: What would you recommend DoD/Gov stakeholders do to work successfully with VCs like Intel Capital?
A: I recommend Government leaders and program executers invite VCs to industry days and demo events to leverage their network of portfolio companies and expertise to help enhance solution development.
