When it comes to pushing the frontiers of science, few institutions can match the talent of the Department of Defense, the intelligence agencies, and the U.S. national laboratory system. With ample budgets and flexible oversight under the aura of national security, ambitious scientists and engineers are working on everything from quantum computing to next-generation satellites.
A Wealth of Talent Left Behind
However, this wealth of talent is often left behind in the frenetic product development and fundraising world of Silicon Valley. Langley, Arlington, and Los Alamos are a far cry from Palo Alto or New York City. Even more challenging is the career transition: the government is, well, the government, and the private sector is, well, the private sector. Moving from one to the next can be quite jarring.
Scout Ventures: Bridging the Gap
Scout Ventures wants to act as the bridge between the startup world and that vast science and technology workforce, with a particular focus on veterans of the military, intelligence agencies, and national labs. Founded about a decade ago in 2012 by Brad Harrison, the firm raised two funds and invested in several dozen companies at the earliest stages, including identity verification platform ID.me (now valued at $1.5 billion), men’s subscription service Bespoke Post, and youth sports management platform LeagueApps.
Incubating Companies
It also incubated companies like health services company Unite Us. Harrison, who has been a long-time angel investor prior to forming Scout Ventures and is a West Point grad and Army Airborne Ranger, said that when he started to look at the track records of the most successful founders he backed, many of them happened to be veterans.
A Focus on Frontier Tech
The firm announced this morning that it has raised a $55 million third fund, which will continue its focus on backing veterans while centering its investment thesis on frontier tech in areas like machine learning, robotics, drones, physical security, quantum computing, and space (that said, the firm does not invest in weapons).
A Unique Differentiator
Harrison said that when he started to look at the track records of the most successful founders he backed, many of them happened to be veterans. So he started doubling down on that thesis, eventually hiring Wes Blackwell who graduated from the Naval Academy and Sam Ellis in Brooklyn from West Point as his co-partners.
Scout Ventures Partners
The firm is a traditional seed stage fund, and Harrison said that the firm targets roughly a deal per month, with a typical check between $500,000 and $1 million targeting 10% ownership. The firm also reserves $2-3 million in capital for follow-on investments.
Taking Advantage of Non-Dilutive Funding
The firm is taking advantage of non-dilutive funding by partnering with organizations that provide grants and other forms of support to startups working on cutting-edge technologies.
A Strong Track Record
Harrison has a strong track record as an investor, having backed companies like ID.me and Bespoke Post. His focus on veterans and frontier tech is a unique differentiator in the startup investment space.
A Bright Future Ahead
With its new fund and focus on frontier tech, Scout Ventures is poised for a bright future ahead. The firm’s commitment to supporting startups working on cutting-edge technologies and its focus on backing veterans will likely lead to many successful exits in the years to come.
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