In this interview, Charles had the opportunity to speak with Jackson Moses, founder and managing partner of the Venture Capital firm, Silent Ventures. Silent Ventures is a Dallas-based firm that backs aerospace, defense and deep tech companies at the pre-seed and seed stages. It closed an $85M Fund II earlier this year. Jackson has invested in some of the biggest names in defense tech, including Anduril, Saronic, Castelion, Hadrian and CHAOS Industries.
Charles: How did you go from founding two companies to investing in defense tech?
Jackson: Curiosity, definitely. Building companies teaches you a lot of intangibles you should apply as an investor, principally how to evaluate the human variable. At Silent Ventures, we invest in defense and deep tech: very futuristic, physical, atoms-not-bits industries. But at the end of the day, we underwrite people. We underwrite founding teams.
Over seven years building my two companies, I hired plenty of people and parted ways with others. You learn to gauge someone’s acumen by proxy, and startup acumen is a different type of energy. Building something from nothing is one of the hardest things you’ll ever do, period. Next to raising children, probably, though I haven’t done that yet. I like to say my first company succeeded in spite of me: very good board, very good investors, very patient employees. The second was a rocket ship where I applied a lot of those learnings.
To build a company, you have to be absolutely obsessed with the problem, 24/7, above everything else. When we exited the second company, I didn’t have a third problem I’d been obsessing over. Meanwhile, I’d built quite a portfolio and track record in defense and deep tech investing, so it seemed like the right time to institutionalize that in a fund. Back then, defense and deep tech weren’t even non-consensus. You were an idiot for touching the stuff. But people smarter and more capable than me got me up to speed fast, and it’s one of the better decisions I’ve ever made.
Charles: What made it feel investable? Why take the risk on defense tech specifically?
Jackson: Anyone with half an eye open could see how the world was evolving. The world’s a volatile place. Our generation was defined by exogenous events like 9/11, endless wars and the ’08 housing crisis. But if you had even one eye on near-peer adversaries, you could see that from the reform period of the late ’70s and early ’80s through the early 2000s, countries like China took huge steps into what were typically Western arenas: innovation, capital markets, you name it.
That raised a series of questions. What does the future world order look like, especially with the Iraq and Afghanistan wars persisting seemingly forever, a potential confrontation over Taiwan, the Davidson window? Think about World War II mobilization, or America’s victory in the Cold War. It all comes back to the means of production: manufacturing and innovation, the things America became quite distant from. We build the best stuff, hands down, but we shipped jobs overseas. That element of globalization left the US industrial base asking, “Where did it go? We need it now.” You could see that 10 years ago, even 20 years ago.
It could have ended up not being an investable theme. But combine it with some of the most motivated, ambitious entrepreneurs you’ll ever meet, people who want to build things that matter. If I’m investing dollars, I don’t want to prop up the 180th version of a payroll tool. If that disappears tomorrow, you just migrate to another one. If Palantir, SpaceX, Anduril, Saronic or even the legacy primes disappeared tomorrow, we’d be in a measurably worse state. So investing in true innovation, moving from bits to atoms, which is where I think we’ll be for the next 40 years, was appealing. This is a multi-decade problem, and it seemed like a fun one to work on.
Charles: Do you separate pure defense tech from companies that are relevant to national defense more broadly? I know you invested in Erebor, for example.
Jackson: If you really wanted to stretch it, you could place almost anything in the world under the umbrella of national security. We don’t take that approach. Erebor is a very specific example. It’s hugely complementary to the whole defense and deep tech ecosystem, because a lot of these companies run into trouble with our financial system by virtue of politics and banking. We need an institution like Erebor to accelerate them.
In general, though, our mandate is defense and deep tech. Defense is pure play: kinetics, electronic warfare, ISR, logistics, supply chain, drones, things you can physically touch. Deep tech, or hard tech or frontier tech, is such an all-encompassing descriptor that for us it really means manufacturing, industrial, engineering, and rare earth and critical minerals: the inputs that allow for scaled production. That’s what we know well.
Within defense, we split dual-use and single-use. Some companies sell specifically to the US government. Others act more as subcontractors or sell B2B, supplying other enterprises the parts, components and subsystems they need, ultimately hoping to own a program of record one day. So it’s more segmented than it might seem from the top down. There’s a method to the madness.
Charles: You run both Silent Ventures and Silent Capital. How are the two structured, and what do you use each for?
Jackson: Silent Ventures is the firm, the institutional set of funds. It’s traditional venture with a completely different LP profile: captive capital in a dedicated fund structure, from endowments, foundations, conglomerates and other deep-pocketed entities.
Silent Capital is a syndicate, a different model meant to provide access to people who want to invest in defense and deep tech. As long as members are accredited, pass background checks and are signed off on, they can invest in what we think are generational companies. Of course, anything can fall apart at any time. But otherwise, by the time these companies reach the market in five to 10 years, the multiples are already priced in, and you don’t get to ride up that leg of American innovation.
Musk came out the other day saying he wants to get every child in the US a share of SpaceX, so they can participate in the fruits of America’s collective labor and innovation. Our thinking is similar. For people who have the motivation, who can discern good investments from poor ones and want to get more involved in the ecosystem, we provide that avenue. To be clear, though, the vast majority of my time is spent on the fund.
Charles: In past interviews, you’ve said you’re skeptical of dual use. How does that fit your broader thesis?
Jackson: For those who don’t know, dual use means selling to both the US government and the private sector. We think dual use from the get-go is a dirty word. Budget constraints are real, and you need focus: a very calculated mandate for the problem you’re solving and the solution you’re taking to market. A lot of investors will tell you that selling to different customer sets, especially at pre-seed and seed where we play, is a recipe for disaster.
Our view is that any company that’s extremely successful selling to the government or to the private sector will ultimately capture the long tail of the other market. So we think these companies will all eventually be dual-use. We just think the early go-to-market needs to be focused. Are you selling to the DoW, into Congress, or to decision-makers at Fortune 2000 companies? We’re not wholly in disagreement with dual use. It comes down to early-stage focus, so your runway isn’t eaten up and, most importantly, your attention isn’t scattered.
Charles: On that note, you’ve said SBIR grants can actually hurt startups by distorting their focus. That seems counterintuitive, but your track record backs it up. What’s the thinking?
Jackson: People talk about the “valley of death” in defense tech: long sales cycles, and a government that’s sometimes a less-than-amicable customer. That’s acquisition and procurement. It’s just the framework we work within. But there are different ways to sell. SBIRs and STTRs have their place. So do CRADAs, STRATFIs and TACFIs. There’s a whole cadre of contracting vehicles out there, and I don’t know that they incentivize the right behavior.
Venture capital is for venture scale. We’re trying to build venture-scale companies over eight, 10 or 12 years, not 25 or 30. For that, you don’t want to become an SBIR mill, collecting $250K here, $1.2 million there, $300K there. You end up diverting your focus across all the different capabilities the government requests, often with an unbalanced, tiered payout structure.
We’d rather our companies raise money, lots of money, with founding teams capable of going directly to Congress or working directly with the DoW. That might mean lobbying for line items, because you have an incredible capability, there’s a clear gap, and appropriated money should go there. It might mean working with program offices to scope requirements on a more accelerated path. Ultimately, we want our companies focused on things like APFITs, OTAs and funded IDIQs, things that lead to production. Otherwise you start looking like a science experiment.
Not every company has to be venture-backed, and that’s completely okay. But when you put venture dollars to work, you need venture outcomes to justify them to your LPs. There’s nothing inherently wrong with SBIRs and STTRs. I just think that for a venture-scale company, if you’re going after them, maybe you don’t have the biggest idea. Maybe it’s not the most consequential or the most immediately needed. That doesn’t make it a bad idea. It’s just not what Silent Ventures is backing.
Charles: Most of your big hits have been at seed or pre-seed. How do you identify those founders so early? Is there a certain je ne sais quoi, or what intangibles tell you someone is Silent material?
Jackson: First, I have the good fortune of working around our founders every day, every week, for close to a decade now. Proximity is osmosis. If you bias toward great people and keep an open ear, you learn from them quickly. A lot of my journey has been learning from my founders, early on and still to this day.
VCs like to pattern match. Everyone has their own formula, some better than others. You pick up the skills that matter most to you, the ones that correlate with successful execution. And you don’t drift from what you know. We don’t make bets on people we don’t know, and we don’t pursue technologies we don’t understand, however hyped or momentous they might be. That’s a really good way to lose money.
Beyond monetization and go-to-market, what we want to understand is: are you going to fall on your sword to make this happen? Everybody wants to be a founder. Everybody wants an X presence and a TechCrunch feature. Believe me, there are much easier ways to get those things than founding a company and raising venture. You have to be maniacally obsessed with a problem. Throughout my 20s, while I was building my companies, I had no social life. Seven years went by, and I thought, “Wow, I built these two things. What did I miss?”
I think founders are born that way. You can’t learn to be a founder. You have to have a screw loose. That obsessive compulsion isn’t a disorder; it’s actually a very appealing trait. If I can come out the other side of that equation saying, “This person is undoubtedly going to spend the next 15 years of their life on this problem, through the highest highs and especially the lowest lows,” then you’ll get our sign-off. We’ve been doing this for some time. I’ve done it myself, and I’ve done plenty wrong. Through that decade of compounding experience, I’ve found something that works for us. But it comes back to people.
Charles: Once those founders start getting traction, how do you think about exit liquidity? You’ve mentioned that defense tech probably won’t produce a ton of IPOs, and that they’ll be fairly concentrated.
Jackson: We always try to underwrite to an IPO. That’s the size and scale we need to justify the very early-stage risk we take on. Underwriting is part science, part art, and it’s not always correct. If the outcomes look suboptimal, it’s on me as a GP to understand the risk-reward profile, whether it fits our mandate and thesis, and most importantly, whether it’s what my LPs expect of me as an allocator.
Investing in the physical sounds new and cool. It’s always been cool; it’s just become mainstream. But the outcome profiles are completely different, and so are the liquidity horizons. With software, anyone with a GitHub instance, AWS servers and a developer team can build a SaaS competitor in days, ship it and get people to pay for it. Then someone else comes right behind you and tries to dislodge you.
Building in the physical world has structural impediments: real lead times on machinery, materials and the right labor. For too long, people have looked down on blue-collar labor. Those people are heroes in this country, and there are fewer and fewer of them. Finding them to manufacture at volume is hard. The companies that overcome those barriers will have big outcomes, but we’re not looking at five-to-seven-year horizons. We might be looking at eight, nine or 10 years.
And especially in defense, we’re not going to see 100 defense IPOs over the next 10 years. It’s structurally impossible. The NDAA is released every year. It’s the only market I know of in the Western world where, line by line, with the exception of some classified programs and dark money, you can mark out the TAM and say, “Here’s the addressable market, and here’s what we can capture.” Based on how Congress appropriates money to warfighter needs, you’re not going to have 10 IPOs of $100 billion-plus every year. You might have 10 to 15 massive defense IPOs over the next 15 to 20 years.
That could accelerate if Anduril’s IPO goes really well. I don’t think it’s going to be this year, but when it happens, it’ll be a defining moment. Luckily, Palantir and SpaceX have held their water. Their multiples and valuations have sustained, and interest in the physical economy has grown.
We run a very narrow, concentrated book. We believe diversification is the enemy of alpha in defense tech. We place our bets, then double, triple, quadruple and quintuple down on them. As founding teams prove themselves, hit their milestones and keep crushing it, we keep putting more money behind them, and we think those are the companies that will ultimately IPO. But it won’t look like SaaS. In defense, you can’t have a $5 billion IPO unless it’s a SPAC. You can’t just tap the public markets and hand your LPs a distribution. The numbers are too massive and too lumpy, the business models are exceptionally different, and there’s a whole capex component that public markets still don’t understand and private markets are only just coming full circle on.
Charles: I want to ask about Hadrian specifically. Its valuation recently jumped something like 6x. What are the mechanics behind that? To me, Hadrian almost seems a little software-ish.
Jackson: Chris is a very special founder. Anyone who meets him, he’ll always tell you this thing is still an experiment. But he came from Australia to the United States to solve our problems, which is hilarious in its own right. God bless him. And if it works, he’s building the GE of the 21st century. It’ll be a $100 billion company, undoubtedly. You’re an investment banker, so think about rolling up 3M, Honeywell and General Electric into one. That’s some serious enterprise value. Hadrian still has a lot of proof points to hit, but we need that new capacity. A lot of the existing capacity is suboptimal mom-and-pop shops, and that’s a PE roll-up play.
There’s a lot of misinformation and a lot of assumptions about Hadrian from people who haven’t seen the inside of it. One reason I invested in Chris so early was that he was realistic about how to solve manufacturing and reshoring in the United States. It wasn’t the prototypical VC pitch of “We’re going to automate everything, and humans won’t be part of the process.” It was: we need machines, because machines build things, and we need humans who know how to use those machines, who understand design and materials. We can optimize and streamline a lot of the end-to-end process with software. So maybe 75% gets automated, but you have to get comfortable that 25% is going to be humans. If you think humans will ever be removed from this equation, it’s probably not the right investment for you.
There’s something about blue-collar labor, the institutional knowledge and trade craft passed down through generations of families, that proves humans will be part of the input however the macro environment evolves. Labor is never disappearing from the equation. Yes, there’s an operating system that powers a lot of the machinery and optimizes processes inside Hadrian’s plants. Software is important. But it’s a very physical industry. Walk into any of Chris’s shops and you’ll see hundreds of different machines you didn’t know the United States had or was capable of making. That’s a really impressive thing.
Charles: Changing tune a bit: what are your biggest takeaways from the wars in Ukraine and Iran, and how have they affected the defense tech space?
Jackson: We don’t have enough stuff, period. We’ve known that. This isn’t a political thing. Every administration is geared to say the same thing, and rightly so. You don’t tell your enemies you don’t have anything. You want to project strength. But it doesn’t take a genius to see that with missiles and interceptors, offensive or defensive kinetics, and especially in a possible future conflict in the Indo-Pacific, our magazine depth and breadth are in a lot of trouble. There are estimates out there. I won’t say them aloud, because I don’t want to startle anyone, but we just don’t have enough mass.
This didn’t start under this administration, or the several before it. It has compounded over decades. I could talk for days about the legacy primes, their structures, cost-plus, executive comp packages and incentives, but reflecting on that doesn’t really help. A whole new wave of founders and investors is trying to fix the present and prepare for the future.
I was once asked how I underwrite for conflict, as if that’s what defense tech investing is. It’s a fair question, but a little on the nose. At Silent, we care very much about never being in conflict. We’re big fans of soft power and diplomacy. We just think they’re meaningless without the implicit threat of hard power. So we underwrite deterrence: a massive quantity of systems, platforms and munitions that prevent wars and conflicts from breaking out in the first place.
You’ll always have irrational state actors. We have North Korea, we have Iran, and Russia is an anomaly all the time. And small conflicts pop up left and right. The asymmetric, philosophical threat is something I don’t think the West knows how to counter well; that’s more of a psyops operation. You can’t confront outright evil and a willingness to die with kinetics. That’s giving someone exactly what they’re asking for. But for the other 99% of the world, building magazine depth and breadth to a level we haven’t seen since World War II mobilization is what prevents more conflicts. It also lets us sell vast quantities of systems and platforms to organizations like NATO, so they can fight these fights themselves instead of the US taxpayer subsidizing them to the tune of hundreds of billions of dollars.
A lot of good comes from rebuilding the defense industrial base. Defense is not a dirty word. We should be very proud to be seen, nationally and globally, as the world’s superpower, the one taking care of all the issues humanity seems to concoct on a daily basis. When people hear national security, defense or military, their minds go to grim or dark places. But our branches of the military do phenomenal things every day that don’t involve violence. We’re the biggest supplier of humanitarian aid on the planet. We need to think about how to industrialize, manufacture and produce correctly for the next 40 or 50 years, so that 40 years from now we can look back and say this was the right series of bets, and the world is a much more stable place.
Charles: Last question. What advice do you have for someone like me, or even an undergrad, who’s thinking about defense tech or VC? How should they approach breaking in, working for some of your portfolio companies, or dealing with the stereotypes associated with them?
Jackson: You have to have your own ethics and principles. I get hit with this every other week, talking to friends, colleagues and counterparts who are interested in defense. Increasingly people want to be part of what we’re doing. If defense tech is something you’re obsessed with, it has to be an inner motivation, a core theme of your life, something that defines your innards. If that’s the case, you don’t really care what other people are saying.
It’s a little different if you’re funding companies trying to develop kinetics for more effective carpet bombing. We don’t do that and have no interest in it; the Geneva Conventions prohibit a lot of that. Usually it’s a conflation of philosophy and ethics. To operate in defense tech is to put in the time to understand defense and national security, and to realize that America is great. Anyone who can’t get on board with that, defense definitely isn’t for them. We have to be proud of who we are, what we do and what we’ve done. Ethically, you just can’t listen to all the noise from the outside. You’ll drive yourself nuts. It’ll tear you apart.
To work as an operator in defense, you have to go acquire the skills. I’m so privileged to spend time with the CEOs I get to back. I wish these were jobs I could have gotten right out of undergrad. I went into software at LinkedIn, which was great, don’t get me wrong. But I would have loved to be building Corsair ASVs with Dino at Saronic, or Blackbeard hypersonic missiles with Bryon at Castelion. Those are crazy, fascinating, cool solutions, and when I graduated, everything was SaaS.
So put in the time to understand the dynamics and the type of people who work here. You’re not around a crowd caught up in all the fluff of the world. You’re around very binary people who get the problems and understand the reality of what we’re being confronted with. They’re there to build. If you’re there to insert your political ideology, make a mess, or whine about X, Y or Z, you’re not going to be in defense tech for long. Make sure they’re your people first. Make sure it’s a philosophy you subscribe to, and then ignore the outside noise.
As for VC, everybody wants to be in private equity or venture capital. It’s all the rage. A lot of people join too early. A lot of people have the pedigree: “I went to Cornell for undergrad, spent three years at Goldman, got my MBA somewhere, and now I’m ready to be a venture capitalist. Hire me.” That’s literally the worst set of career choices you could make to do venture capital effectively. If you want to be at a giant platform and climb a 25-year corporate ladder, that might be the perfect career path for you. But if you want to be in the weeds, investing on the front lines of deep tech and hard tech, the things that will define the next 30 or 40 years, I encourage people to go operate. Go build. Investment banking is great; I’m not saying don’t do it. But if you want to be a VC, the best way is to go do it yourself.
Join a startup early, or build one from scratch. Understand how maniacally, fundamentally difficult this stuff is. Go through the highs and the lows. Understand what it’s like to have 100 fires to put out every day and one fire extinguisher. Get really comfortable chewing glass while walking over a bed of hot coals, in perpetuity. That’s startup life. You’ll build really meaningful skills and internalize the intangibles that no school, textbook or podcast can teach you. And if venture is an avenue you want to walk down one day, you’d be pretty surprised. If you put yourself in the right place at the right time, doing the right work, giving off the right energy around the right people, opportunities avail themselves to you.
That’s a long-winded way of saying there’s no shortcut. You can’t short-circuit it. The playbook coming from academic institutions and the MBA gods isn’t necessarily what best suits young adults for success in venture. We’re young. We can take risks. Take those risks, learn, and inject those learnings into whatever you’re doing. If it’s venture, great. If it’s not, you’ve probably found something else you love. That’s my candid, hard feedback. I have a lot of these discussions every week, and it’s basically: go build, go operate. Once you crack that nut, maybe then you can start underwriting and investing in people who claim to do the same.
Charles: Jackson, thank you so much for your time. Where can people follow your work?
Jackson: If you want some very candid words about the state of the world, X is a great place to find me. But we’re called Silent Ventures for a reason: the focus should be on the founders. The most important part of our website is probably the news section, where you can see the quantifiable outcomes these founders are driving in a completely new era of generational opportunity. We’re allocators. My job is hard in some ways, but it’s nowhere near as difficult as building from scratch. We’d want the attention that would otherwise go to Silent Ventures to go to our founders, what they’re building, and how people can support those companies and the ecosystem more broadly, whether by learning about them or even applying. A lot of cool companies are building really cool stuff. It’s a very unique moment in time.