Why 90% of Defense Startups Never See a Dime in Government Revenue
By Navila Veytia, Founder of Veytia Strategies
Walk through any defense expo and you'll see the same pattern: brilliant founders with cutting-edge tech, impressive demos, and zero government contracts. The disconnect isn't accidental. It's systematic.
Most defense startups are building products for users who don't write the checks.
Marc Lange nailed it in his recent LinkedIn piece about European defense startups hitting procurement walls. The same dynamic plays out stateside. Great tech, smart founders, but they're speaking the wrong language to the wrong people at the wrong time in the wrong format.
Here's where it breaks down, and how we fix it.
The User vs. Buyer Problem
Your end users (soldiers, analysts, field operators) love your product. They'll demo it, praise it, maybe even request it. But they don't cut purchase orders.
The people who do cut those orders care about completely different things: budget cycles, compliance frameworks, integration requirements, vendor certification, and political optics. They're not asking "does this work?" They're asking "can I defend this purchase to my oversight committee?"
If your pitch deck talks about user experience and product-market fit, you're already off track.
Our approach: We reverse-engineer your technology story for the procurement audience. Instead of talking about elegant UI or user adoption, we talk about mission readiness, interoperability standards, and total cost of ownership. Same product, different frame.
The Series A Desert
Early-stage defense investing is hot right now. Everyone wants to find the next Palantir or Anduril. But watch what happens when these startups hit Series A, suddenly the room gets quiet.
Why? Because VCs realize that impressive pilots don't translate to contracts. Innovation theater isn't a business model.
The startups that survive this phase have one thing in common: they've figured out how to convert government interest into actual procurement momentum. They don't just run pilots. They run pilots that create budget line items.
Our fix: We help startups build what we call "procurement momentum" alongside product development. That means engaging innovation offices like DIU, NATO DIANA, and EDA not just for funding, but as stepping stones to larger program offices. We also develop dual-use positioning that keeps commercial options open while building government credibility.
The Procurement Pathway Problem
Here's the hard truth: most defense startups have no idea how their product will actually get purchased. They know who might use it, but they don't know who will buy it, when, through what mechanism, or at what scale.
This isn't just about understanding the acquisition process. It's about understanding which specific pathways exist for your specific product at your specific stage of development.
How we solve it: We map actual procurement routes before we write a single piece of marketing copy. Is this a direct government buy? A subcontract through a prime? A commercial item that gets purchased through existing contracts? Each pathway requires different positioning, different materials, and different timelines.
What Procurement-Ready Actually Looks Like
When we work with defense startups, we're not just improving their marketing. We're making them procurement-ready. That means:
Capability Translation: Converting technical specifications into procurement language that emphasizes mission impact, not product features.
Buyer Mapping: Identifying specific program offices, budget lines, and decision-makers who have both need and authority to purchase.
Credibility Positioning: Aligning with strategic priorities like NATO interoperability, AUKUS technology sharing, or specific DOD modernization initiatives.
Procurement-Grade Materials: Creating capability statements, technical data packages, and case studies designed to survive the procurement process, not just impress investors.
Strategic Storytelling: Building narratives that connect product capabilities to mission outcomes in ways that procurement officers can defend to their leadership.
The Bottom Line
The defense market rewards companies that understand procurement as well as they understand technology. You can have the best product in the world, but if you can't translate that into language that resonates with buyers, you'll stay stuck in pilot purgatory.
We don't help startups get louder. We help them get ready. Ready to navigate procurement. Ready to scale through government channels. Ready to build sustainable revenue streams that VCs actually want to fund.
If you're a defense startup founder reading this and thinking "this sounds like us," you're not alone. The gap between great technology and government revenue is real, but it's not insurmountable.
The companies that bridge it don't just survive. They dominate.
Navila Veytia is the founder of Veytia Strategies, a consultancy that helps defense and dual-use startups navigate government procurement and scale revenue. If you're building in this space and want to discuss your specific situation, reach out.
