For manufacturing startups, factory location is a critical strategic decision. They should prioritize states where local governments actively partner with them to expedite permits, guarantee power, and assist with hiring, avoiding regulatory bottlenecks found elsewhere.
Getting to space is now relatively cheap thanks to SpaceX. The next economic revolution will be triggered by solving the much harder problem of bringing materials back from space. This will enable in-space manufacturing and create a true two-way space economy.
David Ulevitch advises startups to focus on either government or commercial sales initially. Trying to pursue both simultaneously from the outset is extremely difficult and often a red flag for investors, as mastering even one sales motion is a huge challenge.
As the US re-shores manufacturing, VCs are strategically investing in domestic component makers (e.g., motors, magnets) that can supply multiple portfolio companies. This de-risks the entire ecosystem by creating a reliable, local supply chain for critical parts.
Startups in capital-intensive sectors like defense don't need to rely solely on venture equity to build factories. A large government contract can be leveraged to secure significant project financing from other financial partners, preserving equity for R&D and growth.
The firm's head of GP recruiting systematically reaches out to successful founders on the anniversary of their company's sale for several years, waiting for the right moment when they are ready for a new challenge. This patient, long-term approach is key to landing top talent.
Unlike SaaS, defense and manufacturing startups must build physical products. Investors now scrutinize the "production lag"—the time from contract win to revenue recognition—as a key performance metric. This lag can obscure a company's true health if only looking at top-line contract values.
For large funds seeking massive returns, companies that control their entire value chain are more attractive than those making a single component. Full-stack companies can avoid supply chain dependencies and capture more value, making them a better fit for billion-dollar fund scale.