In the ever-evolving technology landscape, one disturbing trend is increasingly capturing global attention: the growing intersection of venture capital (VC) and defense technologies. While some hail this as a recipe for accelerated innovation in military capacities, others, like myself, see alarming cracks in its foundation. As someone who has spent decades working across education, deeptech, and entrepreneurship, I believe that inserting VC's "high-risk, high-reward" approach into defense carries profound societal, ethical, and political consequences.
This isn't just my personal observation. Current data supports these concerns. For example, venture capital investments in defense technology have surged to staggering levels. Q2 2025 alone saw $19.1 billion in funding for defense tech startups, an increase of 200% year-on-year, as highlighted by PitchBook's Defense Tech Snapshot. Yet, this spike in funding distracts from a critical question: Should war and defense really operate under the same business logic as your next food delivery app or social platform?
The Collision of Two Incompatible Ecosystems
As a seasoned entrepreneur, I've seen how venture capital is wired for rapid execution, scaling, and monetary returns. This mindset works well for SaaS startups or e-commerce ventures, but when applied to a military context, it can produce dangerous outcomes.
Here’s why this hybrid of VC and military-tech might be doomed from the start:
-
"Fail Fast and Scale Fast" is Risky in Warfare:
VCs' obsession with fast returns leads to an environment where unvetted technologies are rushed into real-world applications. For example, the rapid rise of Stark, a Ukrainian drone startup valued at $500 million, shows how raw prototypes are tested in live warfare scenarios. While such use fuels faster iteration for tech products, applying this principle to tools with life-and-death stakes exposes a gaping hole in moral accountability. -
Defense Procurement vs VC Speed:
With sales cycles in defense sometimes stretching across multiple years, as pointed out in the Bain & Company Defense Tech Report, the slow pace of government decision-making often clashes with the timeline expectations of cash-burning VCs. This disconnect leads to potential failures in synchronization between the needs of nations and the growth ambitions of startups. -
Ethical Blindspots in Conflict Zones:
Defense startups, backed by investor dollars, are actively experimenting on battlefields. This "permissionless" warfare approach, as advocated by figures like Matt Clifford, creates conditions ripe for unregulated and unethical behavior. Anduril, a defense unicorn, is already channeling resources toward anticipating hypothetical wars, like a potential Taiwan-China crisis, privileging investor profits over global peace, as Business Insider reports.
Statistics That Highlight the Ethical Divide
-
Europe’s Growing Share: In 2025, European VC investments into defense surpassed $1.3 billion, seeing a 30% increase in just two years (Source: Resilience Media).
-
Cross-Industry Influence: VC-backed valuations for defense tech startups (excluding SpaceX) have reached $86 billion across aerospace, surveillance, and AI-focused firms (Bain Report).
-
Dual-Use Technologies: Many VCs gravitate toward startups building "dual-use" platforms. These products serve both military and civilian markets, like AI for surveillance or drones for agriculture repurposed in warfare (CB Insights Defense Trends).
While these numbers seem to indicate progress, they also reflect a dilution of traditional oversight mechanisms. In the haste to onboard new defense startups into publicly traded markets, ethical considerations often join the list of things to be deprioritized.
How Should Entrepreneurs Approach the Defense-Tech Boom?
For any entrepreneur reading this, you might ask, "How does this affect me? Why should I care?" If you are considering tapping into the defense sector with a startup, here are five key steps for creating responsible, future-proof defense innovations:
-
Understand the Stakeholders:
The Department of Defense, for instance, is not a single customer. Startups must carefully understand the unique pain points and risk tolerances of different services, commands, and acquisition teams, as explained in this analysis on tailored solutions. -
Prioritize Ethical Considerations:
Incorporate ethical AI design principles and transparency mechanisms from the onset. Don't wait for regulators to step in, be your own watchdog. CB Insights has noted a troubling trend of startups viewing ethics as a "secondary concern." -
Develop Dual-Use Tech Responsibly:
Building dual-use products is one way to reduce dependence on defense grant funding alone. For example, companies like Iceye leverage satellite surveillance for both security and environmental monitoring. -
Anticipate Long Procurement Phases:
Factor in delays when seeking to land contracts with defense organizations. Build financial resilience to weather these prolonged cycles while fine-tuning your innovation. -
Partner Carefully:
Scrutinize your stakeholders and investors to ensure alignment between your mission and their goals. Renowned investors like Lakestar’s Klaus Hommels openly advocate for clear value-alignment within their portfolios.
Avoid These Common Pitfalls
Entrepreneurs often fall victim to certain repeated mistakes when entering defense technology:
- Chasing Hype Without Substance: Test your product rigorously before entering battlefields. Let Stark's mixed field results serve as a cautionary tale.
- Overpromising Capabilities: Defense startups often inflate their performance, jeopardizing real-world credibility.
- Ignoring Government Bureaucracy: Remember that defense contracts involve navigating politically sensitive terrains, far removed from typical B2B sales cycles.
Final Thoughts: A Better Way Forward
VC certainly has its perks, it delivers capital quickly, fosters collaboration, and rewards innovation. But its fundamental logic, rooted in speed and scale, is incompatible with the intricacies of defense. Take, for example, the UK’s recent Strategic Defence Review: it calls for better alignment between private innovation and public accountability. Entrepreneurs must take cues from these guidelines and become active participants in shaping this delicate ecosystem responsibly.
The bottom line? As attractive as VC funding for defense might seem, it's not always the right fit. Instead, taking a slower, more ethical approach can yield longer-lasting solutions to the world’s most pressing security challenges.
Interested in diving deeper into responsible entrepreneurial strategies? Learn about Violetta Bonenkamp’s vision and innovative solutions at Fe/male Switch. Similarly, follow leading publications like Deloitte’s Perspective on Defense for macro and microeconomic impact assessments!
FAQ
1. What is Venture Capital’s impact on defense technology?
Venture Capital (VC) funds are reshaping defense technology by driving innovation at unprecedented levels, with investments reaching $19.1 billion in Q2 2025 alone. However, this comes with ethical and societal concerns. Learn more about PitchBook Defense Tech Snapshot
2. Why is the “fail fast and scale fast” approach risky in warfare?
The VC mindset of rapid iteration and scaling often results in deploying untested technologies in conflict zones, exposing serious moral and ethical risks. For example, startups like Stark rush prototypes into live warfare. Explore Stark’s Rapid Adoption
3. How does government bureaucracy clash with VC dynamics?
Defense procurement cycles can take years, whereas VC models rely on quick returns, leading to synchronization challenges between startups’ growth ambitions and governmental needs. Learn about Bain’s Take on Procurement Challenges
4. What are ethical concerns surrounding VC-funded defense startups?
VC-backed defense startups have been criticized for experimenting with technologies in war zones, privileging investor profit over global peace. For instance, Anduril is focusing on anticipated military conflicts. Discover Anduril’s Strategy
5. Are dual-use technologies part of defense tech innovation?
Yes, dual-use technologies like surveillance AI or agricultural drones reengineered for military use are popular among investors seeking both civilian and defense applications. Explore Dual-Use Tech Insights
6. How much has European VC investment in defense grown?
European VC investments in defense technology exceeded $1.3 billion in 2025, marking a 30% growth in just two years. Read about European Defense Tech Surge
7. How can defense startups align with ethical practices?
Startups should incorporate ethical AI design, transparency mechanisms, and dual-use development responsibly, as noted by experts. Learn More About Ethical Startup Strategies
8. What common mistakes should defense startups avoid?
Defense startups often fail by overpromising capabilities, rushing untested products into the market, and disregarding government bureaucracy. See Five Pitfalls Defense Tech Startups Should Avoid
9. Which companies are leading defense tech innovation?
Companies such as Anduril, Stark, Iceye, and Helsing are innovators in areas like drones, AI, and spacetech, largely fueled by VC investments. Explore Iceye’s Dual-Use Satellites
10. Should countries be cautious with VC-led defense innovation?
Yes, VC logic prioritizing fast returns and business scalability can overlook societal and global peace considerations, raising risks for unchecked exploitation. Read Deloitte’s Perspective on VC in Defense
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.