Inside the new $100M defense tech fund for cyber, AI companies

In a somewhat rare case, a lobbying firm and a venture capital funder have joined together to invest in a lucrative innovation sector unique to this hub of military infrastructure. 

J.A. Green & Co. a defense-focused lobbying organization with a tech-heavy client roster including SpaceX and RTX Corporation, is collaborating with the VC firm Anzu Partners to create the Anzu-Green Critical Technologies Fund. 

The anticipated $100 million fund will support companies developing technology related to national defense and security, according to Jeff Green, the president and founder of J.A. Green & Co. and a managing partner of the new fund. The focus includes entities specializing in cybersecurity, artificial intelligence and aerospace.

Anzu Partners focuses on investing in “breakthrough industrial technologies,” said David Seldin, a managing partner for the firm and the fund. Typically, Anzu supports companies far along in funding and often with proven support by the US government. 

That standard will translate to this fund, which the organizing entities announced in early June: Green said it will typically invest in companies at the Series B stage and dole out about $3 million-to-$6 million investments. The partners are not looking to lead fundraising rounds. 

“We’re talking about the fund marrying the technology and company-building skills that we think we have at Anzu,” Seldin told Technical.ly, “with the extraordinary advocacy and business development skills that Jeff and his team have.”

The team hopes to make investments starting in the fourth quarter of this year, according to Green. The fund won’t be partial to the region and looks at companies across the country.

VCs planting DC stakes and other trends 

This announcement also comes as venture capital firms turn new eyes on the DC region. Prominently, Silicon Valley’s Andreessen Horowitz has been eyeing office space close to the White House. 

Given the proximity to the Department of Defense (DoD), setting up a defense-related fund makes practical sense, said Green. 

“If you want to do national security, our offices are steps from Capitol Hill. We’re a 15-minute ride from the Pentagon,” Green told Technical.ly. “This is the heartbeat of national security. We think this is the ideal place to work on it.”

Green said this isn’t the first time a lobbying and venture firm have collaborated, but possibly the first with a defense focus. It benefits from the venture firm’s roughly $1 billion in strategic assets across its funds. 

The fund follows a trend of the DoD investing in more early-stage technology companies, according to Green. He’s worked in the defense sector since the beginning of his career, and before founding his lobbying firm in 2007, worked as a staffer in the House Armed Services Committee. Typically, the government has turned to seasoned contractors for innovative technology, Green said, but that’s changed in recent years. 

For example, the DoD’s Accelerate the Procurement and Fielding of Innovative Technologies pilot program funds projects transitioning between development and becoming operational. This signals a shift in behavior, Green said. 

“We’re leveraging on what we see as current focus on emerging tech and leveraging early-stage companies to solve some of these national security problems that, frankly, the prime contractors can’t do it alone,” Green said. “They [the government] need early-stage companies to try to solve some of these grand challenges facing the nation.”