Brian Schettler, managing director of Boeing's HorizonX Ventures, told Defense News in an interview posted Thursday that getting venture capital funding for defense companies that are focused on hardware is a challenge and one way to help address that reluctance among investors is looking at the “capitalization piece.“
“Where are other types of money that could come to the table to ensure that these early stage companies just mature enough to the point of being able to address Defense Department needs?,“ he said. “Are there other vehicles, like In-Q-Tel and others, that could help deploy capital? And maybe it's not equity-linked capital. Maybe there are other forms of doing it with notes or grants.“
Schettler said startups should showcase to traditional VCs the “long-term potential“ and “extended trail of revenues“ of their technology offerings.
“And if you can get your technology on a program of record and that trail can last 30 years, those are the sort of things that are just different worlds from the traditional thinking,“ he added.
Schettler described the approach being taken by Boeing's venture capital arm and discussed issues concerning the presence of foreign investments in VC funds and factors that could boost support for defense spending in the VC community.