Battlefield To Boardroom: The Veteran Founders Riding Defense Tech’s $32 Billion Boom

The enemy gets a vote, too. That military aphorism took on a chilling immediacy for Brandon Tseng when he was training for an Afghanistan deployment as a Navy SEAL in 2012. His team was simulating clearing a ho...

August 3, 2026

The enemy gets a vote, too. That military aphorism took on a chilling immediacy for Brandon Tseng when he was training for an Afghanistan deployment as a Navy SEAL in 2012. His team was simulating clearing a house of enemy fighters when the Naval Academy graduate was suddenly shot in the face. Fortunately it was just a paintball, not a real bullet. “I’d followed my training exactly as taught,” he remembers—but it didn’t matter. One point of the exercise was that preparation isn’t always enough, because adversaries are smart and unpredictable. “If that was real-life combat, I would’ve been killed.”

Clearing hostile buildings was part of the daily grind for the United States military post-9/11. It is extraordinarily dangerous work and killed or injured several people Tseng knew. When he left the military in 2015 after seven years, he couldn’t stop thinking of ways that AI and autonomy tech could reduce risks to troops, like by letting them scan inside structures before they barged in. Tseng convinced his older brother, Ryan, already a successful entrepreneur who had sold his wireless charging company to Qualcomm, and Andrew Reiter, an engineer with a master’s in robotics from Harvard, to join him in starting a drone company they called Shield AI. (Tseng got his Harvard MBA concurrently.) Its first product was a small “Nova” quadcopter specialized for scouting and mapping buildings while sending live video back to frontline soldiers.

Today Shield AI is one of the most valuable defense tech unicorns in the nation, worth $12.7 billion after its most recent fundraising in March. Israelis used the more than $400 million (revenue) company’s Novas to survey Hamas tunnels in Gaza and rescue hostages after the attacks of October 7, 2023; Ukrainians are using Shield AI’s bigger V-BAT drone to identify targets deep inside Russian-held territory. Forbes estimates that the Tsengs, who are co-presidents, each have a stake worth around $400 million.

Tseng, 39, is the latest in a long line of veterans who have used lessons from the military to build successful businesses. A number of companies that helped shape the modern defense sector—such as Pratt & Whitney (1925, now part of RTX) and Grumman Aircraft Engineering (1929, now part of Northrop Grumman)—were founded by vets. So too were non-defense household names like Comcast, GoDaddy, Nike and Walmart. The service academies—West Point, the Naval Academy and the Air Force Academy—have produced disproportionate numbers of America’s corporate executives. World War II Navy pilot Jack Taylor named his rental car outfit Enterprise after the ship he served on. FedEx’s Fred Smith, who received two Purple Hearts in Vietnam, often joked that he got his business degree from the Marine Corps. In a nod to this tradition of achievement, and in honor of America’s 250th birthday, Forbes will publish a list celebrating 250 living veterans (plus 250 historical greats) online on Wednesday at forbes.com/forbes-250.

The new generation of ex-military entrepreneurs—ushered in by the Ukraine war and the rapid development of AI—are using modern tech to build better, smarter weapons. This defense industry revolution started catching fire in 2022 and is now backed by a massive war chest. In February, lawmakers approved an $839 billion defense spending bill for 2026, a 15% increase over 2022. Next year it will balloon to $1.1 trillion if President Trump has his way.

Venture capitalists are paying attention. Record sums are being plowed into buzzy defense companies like Shield AI, naval drone maker Saronic ($2.6 billion in funding) and Palmer Luckey’s AI defense outfit Anduril ($11.9 billion). According to PitchBook, in just the first half of 2026, VCs pumped $12.8 billion into the defense sector, more than five times the amount they invested in all of 2022. The number of defense companies founded annually, meanwhile, has nearly quadrupled since then. Likewise, Y Combinator incubated 32 of them last year, up eightfold since 2020.

Another sign of these times: Initiatives to support vet entrepreneurship are booming. Participation in the federal government’s “Boots to Business” program rose 28% from 2017 to 2025. Applications to the Disabled American Veterans’ entrepreneurship “Patriot Boot Camp” increased 37% from 2024 to 2025 and are already up another 33% so far in 2026.

The Defense Department is getting behind startups in a way it hadn’t in recent decades. Just five contractors—Boeing, General Dynamics, Lockheed Martin, Northrop Grumman and RTX—had come to dominate the industry, particularly in major weapons systems. In 2020, the U.S. military had only three airplane suppliers, down from eight in 1990, and 90% of its missiles came from just three companies, according to a Pentagon report. The “Big Five” are very good at building highly complex and expensive hardware like fighter jets and nuclear submarines. But those things are becoming less relevant. As the conflict in Ukraine has amply demonstrated, the future of warfare is more cheap drones, fewer expensive tanks.

The Pentagon is scrambling to adapt. It has sped up its contracting systems and embraced innovative thinking and rapid prototyping of new weapons. Many founders say that a government procurement system famous for its rigidity and inertia is becoming friendlier at last. According to the Center for Strategic and International Studies, a bipartisan policy organization, “nontraditional” firms (effectively, those that don’t have longstanding business with the government) received $122.6 billion in defense contracts commitments in 2025, double the amount of a decade earlier, and some 10,000 new businesses have joined the defense industrial base over the past two years.

“I think the reason we’re seeing more veterans [starting businesses in defense tech] now is because we’ve gotten out of their way to let them come back and serve,” says U.S. Army Secretary Dan Driscoll, who led a cavalry scout platoon in Iraq. He admits that in the past the environment was pretty hostile for new companies. “It’s not pejorative to say that you need a big balance sheet to be able to develop a new tank or a new helicopter. But whatever you think you will need for the future fight you won’t have, because it’s impossible to predict how your adversary will adapt. And that’s where startups come in; they can innovate so quickly.”

Driscoll predicts that the amount of U.S. venture capital in the defense sector will “triple or quadruple” in the coming years, which is great news for entrepreneurial veterans, who understand the way the military works. “A lot of the veterans who served in Iraq and Afghanistan and have been out in the commercial sector, as they’re returning to defense and bringing the best of the lessons that they’ve learned, I would guess that venture capitalists will find that those will be the most successful bets to deliver lasting value to investors.”

Take Austin Gray. In the military, Gray was a Navy intelligence officer, completing three tours, including one during the withdrawal from Afghanistan and another in which he helped manage a high-profile Covid-19 outbreak on the USS Theodore Roosevelt. In 2021, he used the GI Bill to enroll at MIT Sloan. Gray first considered a consulting career (“a sane, safe career path”). But MIT was soon buzzing about opportunities in defense tech. By the time he graduated from Sloan, he was running a student club focused on defense that hosted about 30 recruiting events, up from two when he first arrived on campus.

“It’s amazing to see how there was kind of no path, and then it totally took off,” says Gray, 32, who spent a summer after graduating at a Ukrainian drone factory. After a short stint at Providence, Rhode Island–based Havoc—another drone boat startup founded by Navy vets—he launched Blue Water Autonomy in Boston in 2024 with Rylan Hamilton, a Navy vet who had worked at Amazon Robotics. (A third cofounder, who built Roomba vacuuming robots, joined soon after.) His idea was that the Navy needed ship-sized drones big enough to cross the Pacific and carry big payloads like missiles. The company, which has raised $64 million at an estimated $180 million valuation, aims to create a fully autonomous warship.

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It wasn’t long ago that venture firms weren’t too keen on backing defense tech. John Goodson recalls having trouble getting funding for his San Antonio–based aerial drone startup, Darkhive, after its 2021 founding. “I’m not a financier, I’m not a banker. I don’t come from venture capital,” says Goodson, who served as a chief petty officer in the Navy. “I only know military and defense and government contracting. It’s all I’ve done in my entire professional career.”

After the Navy, he’d taken a job running government contracts at CTI, a small defense software company. He learned how to identify which projects to bid on, put together compliance documents and build relationships with acquisition officials. Those skills helped Darkhive win a $149,000 grant in 2022 from the federal Small Business Innovation Research program. These sorts of government awards sustained Darkhive until investors finally shook off their trepidation about the sector.

“We suddenly went from having only a handful of firms we could approach to dozens,” Goodson says. “I attribute this sea change directly to companies like Anduril, Saronic and Shield AI. Their meteoric rise and ability to turn the heads of the biggest VCs brought the whole industry up with them.” Darkhive has now raised $55 million altogether, most recently at a $155 million valuation in May.

Many VCs say they are specifically looking for companies that have vets in leadership roles. Mike Sherbakov, a former hand-to-hand combat instructor in the Marine Corps who cofounded a small VC shop in 2022 focused on seeding veteran-led companies, says that leads to better returns: The net IRR of his first $20 million fund is 39%. Lorin Selby of the maritime-focused Mare Liberum (and former chief of naval research) says anything else is a red flag. “In the military, we’ve got our own little lingo. If you don’t understand that, you need to get people who do speak the language so you can relate, as well as strategize on what will appeal to a warfighter on the battlefield.”

Veterans have a unique knowledge of what troops really need and are often particularly motivated to deliver—after all, they’ve lived it. “I was the tip of the spear of doing stuff on behalf of our nation,” says Brett Velicovich, cofounder and COO of the fledgling drone outfit Powerus, who served as an intelligence analyst for the Army. “We couldn’t have anything that didn’t work in the field. That’s how I think about everything we do: I think about the younger version of me and putting [our products] in my hands.”

Investors praise veterans not just for their familiarity with the military but also their tenacity. Take Tseng again: His original pitch for Shield AI was turned down 30 times. The company survived only because, after a year on a shoestring budget, it finally nabbed a $1 million government contract for a drone prototype. Still, that sounds like a breeze compared to what Tseng experienced in 2010 during the U.S. Navy’s infamous, high-attrition “Hell Week.” That’s when SEAL candidates undergo five days of near-constant, brutal drills, often while wet and freezing cold, with reportedly no more than four cumulative hours of sleep.

“Veterans are really good at enduring pain and suffering,” Tseng says. “A 22-year-old marine has probably endured much more than a 22-year-old fresh out of college going to work at XYZ company in Silicon Valley.”

When he encounters stressful challenges now, “that problem-solving mentality I learned in the SEAL teams just takes over.” He needed that calm resolve recently after two service members from the U.S. and Romania, about two years apart, had their fingers partially severed during tests of the company’s V-BAT drone. The first incident led some customers to delay purchases. Tseng calls the media reports about the events—including the one on Forbes.com that broke the story a year after it happened—“dishonest,” and says the second incident, which occurred in May, happened because safety procedures were not followed. During the turmoil, he says he has encouraged his team to stay “focused on the mission” and, as is emblazoned on his office walls, do what honor dictates.

“We’re idealistic to a fault,” says Chad McCoy of veterans. A former chief master sergeant in the Air Force, he served nearly 23 years, including 17 combat deployments. In 2005, he led a team into a burning irrigation ditch to recover bodies and equipment after a British C-130 cargo plane was shot down over Baghdad. Four years later, he was part of the group that rescued Captain Richard Phillips from Somali pirates in a hostage crisis that shocked the world and inspired the Tom Hanks movie Captain Phillips.

A formidable résumé, yet one that didn’t fully prepare McCoy for the business world, where often, he says, “the best product does not win.” In 2022, he cofounded Firestorm Labs, a company that 3D-prints drones and replacement parts right next to the battlefield. Firestorm is now worth $725 million, but to get there, McCoy had to lean heavily on the skill sets of his cofounders—one of whom is a serial entrepreneur—and mentors who taught him how to pitch potential customers, for example.

Now McCoy, 45, works to pay it forward. A side effect of the defense startup boom is that it has spawned a network of successful vet entrepreneurs who are eager to help new entrants. As ex–Marine Corps Matt Warnick, CEO of Auburn Hills, Michigan–based American Rheinmetall, puts it: “Veterans are exceptional at rallying around other veterans.”

“There’s people like me who always take the phone call with these folks and say, ‘Hey, let’s talk through it,’ ” McCoy says. “And getting that early thesis scrutinized saves a ton of time. The network of successful business folks, that is the golden ticket.”

One ex-military who tapped the vet network to raise his first seed round is Blake Hall. The former Army infantry officer was struggling back in 2011 to fund TroopSwap, a classifieds marketplace for military families. Then venture capitalist Kelly Perdew took him to the annual Army-Navy football game. “Kelly brought me around the tailgate to the most successful grads from Annapolis and West Point. He would just be like, ‘You have to invest $25,000 or $50,000 into Blake!’ ” Hall, 43, remembers, adding: “I think it has certainly helped to be a veteran. People want to help you because of who you are and what you’ve done.”

He has since transformed the business into the $2 billion (September funding round) ID.me, which lets individuals securely prove their identity online. His initial idea was to make it easier for veterans to access discounts and other benefits. Today ID.me has verified over 90 million identities, among them first responders, educators and, yes, 7.3 million veterans—including those who are homeless and underbanked.

Hall thought starting a company was a good way to leverage the addiction to risk he developed during his time in service, when he’d run 15 straight months of “kill-capture missions” against members of al-Qaeda. “There’s no letup. There’s no safe time,” he says. “I’m sure it changed my physiology.” When he left the military, he missed the adrenaline and feeling that his actions had very high stakes.

“For folks in the ‘combat arms occupational specialties,’ the problem is you spend a lot of time learning how to fire a machine gun out of a helicopter, and that’s not a skill that’s easily transferred to some other task in the civilian economy,” says Jeffrey Wenger, a senior economist at RAND who studies the military transition.

In a 2021 study by Syracuse University’s Institute for Veterans and Military Families, vets cited their top transitional challenges as losing a sense of purpose and camaraderie. One who can relate is Dino Mavrookas, cofounder and CEO of drone boat company Saronic (valued at $9.3 billion in a March funding round). He served as a Navy SEAL for 11 years before leaving in 2015, in part because his wife had just had the couple’s first child.

“It was a difficult transition,” he remembers. “I was truly leaving a brotherhood. And it wasn’t just the SEALs—it was our families that were so ingrained and supported each other. We’ve been looking for that mission, purpose and community, really, ever since.” Mavrookas’ first move after the Navy was getting an MBA from Wharton, after which he had a couple of stints in private equity. But the jobs didn’t feel quite right. “I had the realization that if I’m going to do something for the next 30 years of my life, I want it to be what gets me out of bed every single day. And that’s helping keep people safe.” So he left a job at the Austin, Texas–based PE firm Vista to start Saronic in 2022.

“As SEALs, we’re always looking at, how do we bend the rules? How do we move faster?” Mavrookas says. At Saronic, it’s now: “How do we move faster than the acquisition ecosystem is set up to do so that we can innovate and stay ahead of the adversary?”

Like many veteran founders, Mavrookas hails from a Special Operations background. It’s unsurprising that those folks might flock to entrepreneurialism. In the military, their units operate in volatile, unfamiliar environments. Former Army Ranger (a Special Ops role) Doug Philippone, who headed defense at Palantir and is now a venture capitalist at Snowpoint Ventures, puts it this way: “You’re in the middle of nowhere, you’re almost never trained for what you’re being asked to do, people are trying to kill you and you have to figure out how to win. That’s a really good thing to put on your résumé.”

Some ex-military entrepreneurs say they prefer to hire veterans. It’s not just altruism. Rob Slaughter, cofounder and CEO of the software startup Defense Unicorns, says vets make good employees because they’ve had to assume leadership roles early in their careers. Slaughter conducts every candidate’s final interview at the $1 billion company (January funding round). In the years since its 2021 founding, he has identified a “magic 2:1 ratio” whereby vets will “outperform somebody on the industry [side] with twice that experience.” About 40% of Defense Unicorns’ employees are veterans.

Ironically, he has an easier time hiring strong talent now than he did when he was an Air Force officer working alongside future cofounders Jeff McCoy and Andrew Greene to help the military deploy new software faster. Slaughter found it impossible to hold onto talent back then: His top engineers were contractors whose employers kept reassigning them before they could settle in. He came to believe that the companies were more interested in using their best people to score new work rather than execute the contracts they’d already won.

Eventually he couldn’t take it anymore. He left the military in 2021 to see if he could better execute from the outside. It’s working: Defense Unicorns’ platform, which helps the U.S. military keep its software up to date, is now embedded in more than 90 systems across the services.

Slaughter, 40, has made a fortune that Forbes estimates at $150 million—something he never could have imagined in the Air Force, where even officers must serve for years before they crack six figures. The private sector is more generous. As the money keeps pouring into defense startups, more veterans are discovering they don’t have to choose between pursuing wealth and serving the mission. And the stakes will only get bigger. In a market where tech moves faster than regulation, the rush for contracts and funding will yield lots of big winners, but also big losers, bad actors and collateral damage.

Opportunity beckons for America’s ex-warriors. Savvy veterans will harness the tools of entrepreneurial capitalism to help the Pentagon adapt to a changing battlefield—and profit from the gold rush that is just beginning.

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