SpaceX, Anduril, and the Rise of Defense Tech Funding

You have a cold pipeline. Inbound investor threads are scattered across email, DMs, and a Notion page that nobody updates. Your data room is a Dropbox link that four VCs opened but never followed up on. You are building something ambitious in defense tech, but the raise is stalling.

That stall is not a reflection on your product. It is a process problem. And right now, that problem is costing you access to more capital than any moment in recent memory. Defense tech funding just hit an all-time record, pushed by a wave that long-time operators call American Dynamism: the conviction that private capital, not just government contracts, can rebuild the country's defense infrastructure. SpaceX crossed this bridge years ago. Anduril just doubled its valuation. The window for founders who know how to run a disciplined raise is open.

This guide is the playbook for running that raise. It assumes you are building a defense or dual-use company and need to raise institutional capital. We will walk through the concrete steps to turn a chaotic process into a systematically executed round, using the same operational muscle that defense-tech founders are using to close nine-figure rounds.

Prerequisites

Before you start any step, make sure these fundamentals are in place. Skipping them creates a data room full of gaps and a pipeline full of stalled conversations.

• A fundraise-ready company. You have a live product, early traction (revenue, LOIs, or government pilot programs), and a clear use of funds tied to a 24-month runway. Pre-product founders should focus on building a founding team with deep domain credentials.
• A defensible technical moat. In defense tech, pure software plays without a hardware or systems integration angle get heavy scrutiny. You need to articulate why your approach is hard to replicate and how it plugs into real procurement pathways.
• Compliance literacy. Familiarity with ITAR, EAR, FedRAMP, or CMMC requirements is table stakes. You do not need to be certified yet, but you must be able to speak about your path to compliance without a blank stare. The Capital Raising Glossary can help you tighten your language around terms that defense investors care about, from A-round tranches to liquidation preferences.
• A dedicated workspace. Running a defense raise means tracking conversations across 50+ firms, sending timely investor updates, and maintaining a secure data room. Spreadsheets collapse under this load. You need a platform that centralizes the whole process. Capitaly is built for exactly that purpose, giving founders one place to manage the investor pipeline, share a tracked data room, and use AI to draft outreach.

Step 1: Map the New Defense Investor Landscape

The first mistake defense founders make is treating venture capital as a monolith. In defense tech, the LP base and fund mandates have fractured. You are not just targeting generalist VCs; you are targeting partners who have raised dedicated defense or deep-tech vehicles, as well as corporate VCs from the defense primes and government-focused family offices. A map matters.

Start by segmenting your list into three categories:

1. Dedicated defense-tech funds - Firms like Shield Capital, Razor's Edge, and Marlinspike have thesis investments entirely in defense and national security. Their partners live the procurement cycle and will not balk at longer sales timelines.
2. Generalist firms with an American Dynamism practice - Andreessen Horowitz's American Dynamism fund is the most visible, but Lux Capital, Founders Fund, and General Catalyst have also made big defense bets. These firms bring brand cachet and cross-portfolio leverage, but they compete heavily for allocation into an elite handful of companies.
3. Strategic investors - The primes (Lockheed Martin Ventures, Boeing HorizonX, L3Harris) increasingly participate in early rounds. A strategic investment can unlock prototyping contracts, but it often comes with strings around exclusivity or IP access. Separate the signaling value from the actual commercial benefit.

Now layer on the data. According to a Crunchbase analysis, defense startup funding hit an all-time record in 2024, with AI defense companies driving a disproportionate share. Anduril, the poster child of this surge, doubled its valuation in 2025 by raising $1.5 billion at a $14 billion valuation, as reported by CNBC and Reuters. The Financial Times noted that investor appetite for defense tech has expanded beyond the classic Beltway circle into blue-chip institutional investors. This is not a fad; it is a structural reallocation of capital toward companies that can deliver hardware and software to government customers faster than the legacy primes.

Pro tip: Do not build your list once and call it done. Use a tool that keeps your pipeline live. Capitaly for founders gives you a workspace where you can find the right investors, manage every conversation, and run the whole round like an organized project, pulling from an always-current dataset of angels, micro-funds, and institutional LPs.

Step 2: Wire Your Narrative to a National Mission

A standard SaaS pitch deck does not work for defense investors. You are selling two things at once: a scalable business model and a national security outcome. The latter is what gets a partner to champion you in a Monday morning meeting.

Your narrative must answer three questions in sequence:

• Why now? Tie your company to a specific, acknowledged threat or capability gap. For example, "The Joint Force needs autonomous underwater systems to monitor chokepoints in the Indo-Pacific; existing contractors cannot deliver at scale."
• Why you? Lead with the team's operational experience. Founders with DOD, intelligence community, or prime contractor tenure get an automatic hearing. If you do not have that, pair with an advisor who does-and put them on the board.
• Why this capital? Show a path to becoming a going concern without perpetual dependency on SBIR grants. Lay out the first commercial or dual-use milestones that will generate non-government revenue.

SpaceX's early pitch is instructive. Elon Musk did not just sell cheaper rockets; he sold the strategic imperative of making the U.S. the dominant launch provider. Anduril sold a software-first approach to defense hardware, framing it as a competitive counter to China's industrial capacity. Your deck should feel like a mission brief, not a marketing deck.

Warning: Avoid generic patriotism. Statements like "supporting the warfighter" land flat unless backed by a specific story of a recent exercise, a delivered capability, or a team member's lived experience. Investors read dozens of defense decks a week. The ones they remember are anchored in operational truth.

To accelerate your deck drafting, start from proven structures. Capitaly's fundraising templates include pitch deck outlines, data room checklists, and investor update formats that you can adapt to a defense context instantly.

Step 3: Build a Data Room That Survives Diligence

Defense diligence is longer and more invasive than commercial software diligence. You will face questions about export controls, supply chain security, and government contract risk. Your data room must pre-answer those questions.

Assemble these sections as a minimum:

• Technical architecture and IP ownership - Patents, trade secrets, and a clear cap table showing no adverse IP claims from university labs or prior employers.
• Regulatory posture - ITAR classification letter, EAR ECCN determination, and a timeline for any CMMC or FedRAMP certification. If you have a DS-4305 registration or an FCL sponsorship letter, include it.
• Contract pipeline - Any DOD contracts (SBIR, STTR, OTA, or direct awards) with periods of performance and option years. Show teaming agreements with primes as letters of intent.
• Team security clearances - List of cleared personnel and the cognizant security agency. A DD-254 is gold.
• Financial model - P&L with clear segmentation of government revenue vs. commercial revenue, and a sensitivity analysis for contract delays.

Once assembled, do not serve it as a static folder. Upload it to a tracked data room. You need to see exactly which pages an investor opens, how long they spend, and whether they share it with their partnership. Share a tracked data room on Capitaly gives you secure access controls, per-file engagement analytics, and a cleaner path through diligence that avoids the back-and-forth email chains.

Step 4: Run a Parallel Process, Not a Linear One

Many first-time defense founders fall into the serial fundraising trap. They pitch one firm, wait for a term sheet, and when it does not come, they start the next conversation from zero. In a hot sector, that cadence kills momentum.

Instead, run a parallel process:

• Batch your outreach into two-week sprints. Upload a list of 30-50 target investors into your CRM and send personalized intros within the same window. Investor outreach on Capitaly helps you find matching investors, draft personalized messages with AI, and track every conversation in one inbox.
• Hold all first meetings within a four-week block. Keep your deck consistent and your answers sharp. After each meeting, log notes immediately; if you wait until the end of the day, the details blur.
• Create a data room review drive. After sending the data room link, monitor engagement. If a partner spends 20+ minutes in your regulatory section and then goes silent, they may be stalled on a specific compliance concern. Reach out with a clarifying note rather than waiting.

Pro tip: Use the speed of the fastest-moving firm to pressure the others-ethically. When you receive a term sheet with a reasonable deadline, inform the other firms you are in active conversations and have a timeline. Defense funds respect operational tempo; use it.

To manage the parallel flow without losing threads, you need a shared view of every stage. Manage your dealflow gives you one pipeline for every deal, AI that reads decks and models, and a shared team inbox, so your co-founders never ask "where are we with Founders Fund?"

Step 5: Use AI to Systematize the Administrative Load

A defense raise generates a crushing volume of administrative work: drafting personalized cold emails, scheduling across time zones, sending regular updates to a growing list of investors, and preparing diligence follow-ups. Founders who try to do all this manually burn out before they close.

AI is not a gimmick here; it is an operations lever. Use it to:

• Draft outreach sequences. Feed the AI a one-line bio of the investor and a summary of your company's alignment with their thesis. The system produces a draft email that you edit in under five minutes instead of starting from a blank page.
• Generate investor updates. Every two weeks, pull key metrics (pipeline velocity, new contracts, press mentions) into a template. Capitaly's features include a central inbox that learns your voice and can draft updates from your raw bullets.
• Analyze document engagement. AI can summarize which sections of your data room get the most attention across your pipeline, helping you refine the deck for the next batch.

When you automate the administrative layer, you reclaim hours to spend on the parts of fundraising that demand founder presence: building relationships and closing terms.

Warning: Do not let AI write your whole outreach without human review. An email that reads as generic will crater your response rate. Always add a specific, personal detail about the investor's portfolio or public commentary.

Step 6: Treat Investor Updates as a Non-Negotiable Cadence

The single highest-leverage habit in a defense raise is a disciplined update schedule. Investors who are not yet ready to commit will watch your update consistency as a proxy for your operational rigor. A founder who sends a crisp, data-packed update every 14 days signals that they run a tight business.

Structure each update with:

• Key numbers: LOIs signed, pilots launched, contract awards, and runway remaining.
• People wins: New hires, notable advisors, key security clearances obtained.
• Product milestones: Demos completed, test results, regulatory progress.
• What you need: A specific ask-"Introductions to the innovation arm of Army Futures Command" or "Feedback on our OT security posture."

Every update should also include a direct link to your live data room and a calendar link for a follow-up call. Do not bury these; make them the natural next step.

Run a seed raise on Capitaly bakes this rhythm into the platform. You can set update templates that pull from your pipeline data, so investors get a consistent, professional view of your momentum.

Step 7: Close with a Clock and a Clean Cap Table

When a term sheet arrives, move fast. Defense rounds often involve additional clauses around national security review (CFIUS), shareholder rights in the event of a government demand, and drag-along provisions that require legal counsel specialized in dual-use companies. Do not let these complexities extend the close into a multi-month limbo.

Before you sign, confirm:

• Your cap table is clean and reflects all SAFEs, convertible notes, and advisor grants. Use a pro forma cap table tool or a spreadsheet that matches the term sheet's calculations exactly.
• You have legal counsel with defense M&A experience. A generic startup lawyer may not spot a problem clause that could block future government contracting.
• You understand any side letters or NDAs that restrict capital from certain foreign LPs. Defense investors often have LP base constraints tied to CFIUS review sensitivity.

Once the round closes, publicly announce it through your chosen channel-but before the press release, send a personal note to every investor who engaged but did not participate. Thank them for their time and tell them you will keep them updated. That simple act will build your bench of warm contacts for your next round.

Run a pre-seed raise on Capitaly supports the same discipline for earlier-stage rounds, whether you are closing angels or micro-funds.

The American Dynamism Window Will Not Stay Open Forever

The Wall Street Journal and Defense News both note that the current funding environment for defense startups is unprecedented but not permanent. The responsible statecraft analysis explains that venture-backed firms are structurally challenging the primes, creating a political landscape that could shift with a change in administration or budget priorities. Founders who run disciplined processes now will close rounds while valuations reflect the surge; those who wait risk getting caught in a cyclical cooldown.

None of the steps above require superhuman effort. They require a shift in how you treat your raise: from a sporadic side task to a tightly managed operational process. The companies that close defense rounds quickly-whether at the pre-seed, seed, or growth stage-are not the ones with the slickest pitch. They are the ones with a central workspace, a live pipeline, a tracked data room, and an update cadence that never falters.

If you are ready to run your raise with that level of discipline, get started on Capitaly. The platform gives you the investor CRM, data room, AI-driven outreach, and pipeline tracking to close your round faster. And if you want to stay sharp on defense-tech funding trends and valuation data, subscribe to Capitaly's Substack for daily insights on venture, fundraising, and startup life.