Funding Innovation or Failing Forward? Why USSOCOM’s New Venture Initiative Misses the Mark
The Private Capital Investor Cohort (PCIC), developed by SOFWERX and backed by USSOCOM, represents a new experiment in defense innovation. By inviting venture capitalists to help sustain early-stage tech companies, the initiative aims to ensure that these firms—many of which possess potentially game-changing technologies for special operations forces—have the funding necessary to survive the drawn-out defense contracting process. The rationale? Companies often run out of resources before the military ever inks a deal with them, leaving potential innovations to languish before they can be deployed in the field.
General Bryan Fenton, SOCOM’s Commander, captured this sentiment well when he stated that he regularly encounters small companies with remarkable technologies, but that these solutions are years away from appearing in the Program Objective Memorandum (POM)—the five-year budget planning tool that governs defense spending. In Fenton’s view, the VC community could act as a stopgap, keeping these companies afloat until the government is ready to buy. (source)
On its face, the PCIC might seem like a good idea—a proactive way to keep tech companies engaged and ensure the warfighter eventually gets access to cutting-edge tools. But this approach has an inherent flaw: it addresses the symptoms, not the problem. In other words, PCIC is akin to putting a Band-Aid on a festering wound. Sure, it might stop the immediate bleeding, but it does nothing to cure the underlying infection.
The problem isn’t that promising companies lack funding; it’s that the defense acquisition process is hopelessly slow and rigid. It’s worth remembering that this process is driven by a bureaucratic structure that simply doesn’t move at the speed of modern innovation. For a startup developing bleeding-edge AI or cyber capabilities, waiting two to five years for a government contract is not just frustrating—it’s often a death sentence. During this time, many firms either pivot to commercial markets, are acquired, or close down altogether. The PCIC, then, tries to cover up this deeper dysfunction by propping up companies financially rather than accelerating the procurement timeline.
Imagine it like this: You’re on a sinking ship, bailing out water with buckets. The PCIC would be like tossing in more buckets instead of patching the actual leak. Sure, you might stay afloat a little longer, but the ship is still taking on water at an alarming rate. To put it bluntly, VC funding is not a substitute for faster, more agile contracting methods. It’s merely a stopgap that keeps the companies alive but fails to deliver solutions to the warfighter in a timely manner.
The bigger question is why USSOCOM, and by extension, the broader DoD, isn’t investing more in streamlining the acquisition process itself. The problem isn’t the lack of interested parties willing to solve hard problems—it’s that the government takes way too long to make deals. Contracting delays, endless paperwork, compliance requirements, and a lack of urgency all contribute to what should be the primary target for reform. If USSOCOM really wants to encourage innovation, it needs to create a contracting system that can move at the speed of innovation.
The PCIC is not without merit; it could provide temporary relief for some companies and help them survive until they land a contract. But as long as it’s seen as the solution, rather than a temporary patch, the government will continue to miss the mark. Without addressing the core inefficiencies in contracting and acquisition, programs like PCIC will merely treat the symptoms of a much larger problem.
