TechCrunch: Eric, a former CIA officer, transitioned to venture capital to invest in defense tech startups in Europe, recognizing the growing role of the private sector in defense.
TechCrunch - StrictlyVC Download: Why Eric Slesinger, a former CIA officer, is now funding European defense tech
Eric, founder of 2011 Ventures, shifted from a CIA officer role to venture capital, focusing on seed-stage defense tech startups in Europe. He noticed the increasing influence of the private sector in defense, which was traditionally a government domain. This realization led him to explore venture capital, aiming to bridge the gap between government and private sector innovation. Eric's firm, 2011 Ventures, is raising a $22 million fund with NATO Innovation Fund as a significant backer. His investments focus on areas like hypersonics and subsurface mapping, leveraging his background to identify government demand for emerging technologies. Eric emphasizes the importance of understanding market dislocations in gray zones, which present unique investment opportunities. He also highlights the need for European startups to engage in early-stage lobbying to shape markets and ensure new innovations are well-received.
Key Points:
- Eric transitioned from CIA to VC to leverage private sector's role in defense.
- 2011 Ventures focuses on European defense tech startups, raising a $22M fund.
- NATO Innovation Fund is a key backer, supporting capacity building in Europe.
- Investments target hypersonics and subsurface mapping, exploiting market dislocations.
- European startups should engage in early lobbying to shape markets and drive innovation.
Details:
1. 💡 Shopify: Empowering Businesses with E-commerce Solutions
- Shopify supports millions of businesses, including Thrive Cosmetics and Momofuku, offering solutions from website design to marketing and sales expansion.
- Shopify provides a comprehensive platform that transforms business uncertainties ('whatifs') into actionable outcomes, helping businesses grow and achieve their goals.
- The platform offers a $1 per month trial, encouraging businesses to easily start and explore its features.
- Shopify's tools include website design, marketing strategies, and sales expansion, which have helped companies like Thrive Cosmetics and Momofuku to scale efficiently.
- Specific examples, such as Thrive Cosmetics and Momofuku, illustrate how Shopify's solutions have been instrumental in their growth, highlighting the platform's effectiveness in real-world scenarios.
2. 🎙️ Introducing the Hosts: Connie Loys and Alex Gove
- Connie Loys and Alex Gove introduce themselves as the engaging hosts of the Strictly VC podcast, setting the stage for insightful discussions.
- Listeners are informed of a special promotional offer available at shopify.com, although details on the offer's specific nature or relevance to the podcast's theme are not provided.
3. 🕵️♂️ Eric's Transition from CIA to Venture Capital
- Eric founded 2011 Ventures, investing in seed-stage defense tech startups focusing on Europe, highlighting the growing interest in defense tech investments.
- He previously worked at the CIA as an officer for 5.5 years, developing gadgets and software for field agents, indicating his technical expertise and innovation skills.
- Eric holds a BS and MS in mechanical engineering from Stanford and an MBA from Harvard Business School, showcasing a strong educational background that supports his technical and business acumen.
- He worked at In-Q-Tel, the CIA's venture arm, before founding 2011 Ventures, demonstrating his strategic understanding of the intersection between technology and national security.
- Eric transitioned to venture capital upon realizing the significant role of the private sector in government competition, indicating a strategic shift towards enabling technological advancements in defense.
- The transition is underscored by the success of companies like Palantir, which exemplify the potential impact of private sector involvement in defense technology.
4. 🌍 Changing Landscape of European Defense Tech
- The European defense tech landscape is evolving, with increasing acceptance and excitement towards tech companies that were previously unpopular.
- Influence from US companies like Palantir and Anduril has played a role in reshaping perceptions in Europe.
- Personal connections have become more direct, from two or three degrees of separation to just one, fostering trust and familiarity.
- Ethical transparency and strong ethics of current employees are central to the changing narrative, making these companies more relatable and trusted.
- There is a growing recognition of the ethical work being done within these sectors, countering past skepticism associated with intelligence communities.
5. 📈 Tapping into European Defense Opportunities
- The European defense sector presents significant untapped opportunities due to historical underinvestment, as European nations have historically relied on US protection rather than developing their own defense infrastructure.
- There is a strong conviction among European entrepreneurs about the potential of defense technology, similar to their global counterparts, indicating a fertile ground for innovation and business growth in this sector.
- European governments are increasingly recognizing the need to re-evaluate their security arrangements, suggesting a market readiness to adopt new defense technologies.
- Europe is expected to become a key region for grayzone competition, underlining the strategic importance of investing in European defense technologies.
- There is a perception gap between the US and Europe regarding the seriousness of defense issues, indicating a ripe market in Europe that has not been fully recognized or capitalized on by US investors.
- Specific examples of success in European defense include the development of advanced drone technologies and cybersecurity innovations, demonstrating the region's potential to lead in these areas.
- The European Union's recent initiatives to increase defense spending and collaboration among member states are creating a conducive environment for defense startups and technology companies.
- Investors should consider the growing political will within Europe to enhance its defense capabilities, which is likely to lead to increased funding and support for defense-related projects.
6. 🤝 Networking and Fundraising in Defense Tech
6.1. Cultural Shift and Investment Dynamics in Defense Tech
6.2. Networking and Stakeholder Roles
7. 🔍 Investment Strategies and Collaborations
- Ukraine serves as a real-time testing ground for new technologies, offering a unique environment to evaluate innovations at a rapid pace.
- Venture capitalists face the challenge of distinguishing genuinely 'battle-tested' technologies in Ukraine, requiring thorough diligence to verify claims.
- 2011 Ventures is closing a $22 million fund, with NATO Innovation Fund as a significant backer, marking its first fund investment.
- The fund's success in securing NATO Innovation Fund support is attributed to the founder's network and alignment with NATO's mission.
- The European Defense Investor Network, founded by the same individual, has grown from 8 to 125 members, facilitating strategic collaborations.
8. 🚀 Exploring Startups and Technological Innovations
8.1. Building Networks and Partnerships
8.2. Deal Sourcing and Investing Strategies
8.3. Case Studies and Examples
9. ⚙️ Focus on Dual-Use Technologies and Market Needs
9.1. Polar Mist - Innovative Autonomous Navigation
9.2. Interest in Autonomous and AI Technologies
9.3. Gray Zones in Market Dislocations
9.4. Hypersonic Vehicles - Triad of Requirements
9.5. Subsurface Mapping - Untapped Infrastructure
9.6. Dual-Use Capabilities
10. 🎯 Future Vision and Insights on Defense Tech Trends
- In-Q-Tel's top-performing companies had large commercial markets, like MongoDB, not just defense tech, indicating potential for dual-use technology commercialization.
- Government is generally ahead in technology, especially with US and European research labs, suggesting potential for leveraging advanced materials and sensing technologies.
- Clear demand signals from government are crucial for investment decisions in defense tech, with a focus on understanding current and future market needs.
- European companies should engage in more early-stage lobbying to shape the market and ensure receptiveness to new innovations.
- Focusing early on a single application (dual-use dilemma) is critical; attempting both military and commercial applications prematurely can lead to failure.
- The role of a fund is to multiply money, with specific goals like advancing freedom in Europe, being a category leader, and creating a strong financial product.
- Anduril is positively perceived for communicating defense tech's role, challenging traditional defense contracts with firm-fixed pricing, and rapidly applying new technologies.
