The Defense Department is trying to renew its once robust relationship with Silicon Valley to find the technologies needed to confront 21st-century threats. The Air Force is taking the novel approach of establishing a venture capital firm within its ranks that locates, invests in, and opens doors for promising defense startups. AFVentures is a division of an Air Force technology acquisition and development group called AFWerx (the AF stands for Air Force and Werx is shorthand for “work project”) established in 2017. AFWerx is something like the Defense Innovation Unit (DIU) within the DOD, which began looking into the private sector for promising defense technologies back in 2015. For many years the DOD has relied chiefly on technologies developed either within the government or by a small group of large contractors such as Boeing or Raytheon. There’s a growing belief within defense circles that to address the new nontraditional and cyberwarfare threats on the horizon, the U.S. needs to tap into the cutting-edge innovation happening outside those universes. Sidestepping the ‘Valley of Death’ One of the biggest things AFVentures does is help small startups survive the brutal process of qualifying for a defense contract. The DOD’s procurement process is famous for its complexity and slowness. It’s a five-phase affair that starts with technology analysis, then moves to product prototyping, then engineering and manufacturing, then production and deployment, and ends with operations and support—and that’s if the project isn’t rejected or starved of funding. It’s a mind-numbingly labyrinthine system clogged with red tape and paperwork. Larger contractors have large staffs of people to wade through the process, but smaller tech companies face a real challenge managing all the work. That means a smaller startup might do a successful pilot project for a branch of the military but then parish while waiting for a sustainable long-term contract to materialize.
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Why the Air Force has its own venture capital fund