NAME: Tim Hsia, Founder and Managing Partner

COMPANY: Context Ventures

FOUNDED: 2021

HEADQUARTERS: Auburn, WA

PREFERRED ROUNDS: Pre-seed or seed. We sometimes joke that we like to be in the friends, family, and fools round and not be the fools.

AVERAGE CHECK SIZE: $250,000 to $1 million

NOTABLE INVESTMENTS: Farther (Army co-founder), Rentcheck (Navy co-founder), Actuate (Marine co-founder), Boom & Bucket (Navy co-founder), Reveal (Marine founders), Wove (Army cofounders), The MilVet (Marine co-founder), Perfect Venue (Army co-founder), Fellow Products, Maker Wine, Luma AI

Q: What was your path into venture capital?

When I was at Stanford for graduate school, I learned about venture capital (VC), and it sounded like an incredible job, but I was told it was not possible to simply find a VC job. I was told that the way to get into venture capital would require one, if not all three of the following routes:

1. Be a good (if not great) angel investor.
2. Start and build a company so you know what it is like to be a startup founder (and ideally be successful).
3. Join a rocketship company, so you know what it is like to be at a successful startup.

Based on this feedback, I decided to follow those routes and began angel investing, started a company, and joined a startup. I am thankful to have a fantastic team that includes Carina Cho and Brendan Aronson (who served in the Marine Corps).

Q: Tell us more about your investment thesis. Why does your fund focus on companies owned by prior service military members and veterans?

We focus on military veteran founders because this is our community. We also think this is an advantage for us because we know the community well through our involvement within the veteran ecosystem, with connections through Service to School, Marines Memorial Club & Hotel, Bunker Labs, and others.

We also think the best military veteran founders have key traits for building and growing companies. They have high character and competency, they seek context, they have strong work ethic, and they are great leaders, team players, and builders.

Q: What are some unique advantages veteran founders have when building dual-use and defense-focused companies?

They understand the problems intimately because they likely faced them when serving. Military veteran founders also really care about ensuring that warfighters have the best technology, equipment, and service, as this is a community they care about passionately.

Q: How does being a veteran inform your outlook on the dual-use space as a whole?

We understand the challenges associated with dual-use companies. How hard it is to be defense tech or commercial focused, and how tremendously difficult it is to do both.

Q: What unique value-add does your fund provide to the companies in which you invest?

We bring connections to help companies raise funding by connecting them to other sources of capital including investors from the Bay Area and Sand Hill. We also host a lot of events like the Military Veteran Startup Conference that brings hundreds of veteran founders, investors and industry leaders together.

We help companies with their marketing strategy by leveraging Media Mobilize to help them attract earned media, provide marketing operational assistance as well as guidance on paid media.

We connect companies to talent especially if they are looking for military veteran talent through our military veteran incubator and portfolio company, The MilVet.

We provide coaching by leveraging our team’s operational experience. We know what it is like to start and build a company. We are both operators and investors.

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NAME: Brandon Shelton, Managing Partner

COMPANY: Task Force X Capital

FOUNDED: 2015

HEADQUARTERS: Charlotte, NC

SECTORS: National Security (as it relates to defense and cybersecurity), Healthcare

PREFERRED ROUNDS: Pre-Series A

AVERAGE CHECK SIZE: $500,000-$750,000 plus reserves for follow-on investments

LEAD INVESTOR?: Yes, we can lead or follow

NOTABLE INVESTMENTS: Sayari, ThinkOrbital, Tidal Cyber, Xona Systems

Background:

Brandon Shelton founded TFX Capital (TFX) in 2015 with a fundamental belief that the best entrepreneurs are those who have served. As the Managing Partner, he leads the firm’s service-driven investment strategy. With a focus on Pre-Series A and Series A business to business (B2B) technology companies, TFX provides unique and trusted access to companies founded by high-performing, commercially-tested former military and national security leaders. As a veteran himself, Brandon brings over 25 years of military, financial, strategy, and operational experience including within high-intensity and dynamic environments.

Q: What was your path into venture capital?

I started TFX to fill an unmet need for high performing, former military founders trying to navigate the venture capital obstacle course. I began with the question, “How does one access trusted capital and a support network?” This evolved into our unique “Task Force” approach. Having worked on Wall Street, I was familiar with many of the personas common within venture, so my pursuit of venture capital has always tried to place the founder at the center of all that we do.

Q: Tell us more about your investment thesis. Why does your fund focus on companies owned by prior service military members and veterans?

We invest in early-stage technology solutions that make our nation more secure and our society stronger. We exclusively focus on high-performing former military and intelligence community leaders as founders. Our experience has proven that there are opportunities in investing in technology businesses led by service-driven, former military and national security leaders who are now solving problems that affect us all. We look for founding teams with at least one leader who has executed in more challenging environments than their startup.

Q: What are some unique advantages veteran founders have when building dual-use and defense-focused companies?

Military veterans have a mission-first mindset. If a founder has served their country in the military or the intelligence community, they generally understand what it means to serve something higher than themselves: a mission. They want to make our nation stronger and more resilient, so they approach problems with a more transformative and creative mindset. This mindset is well-suited for dual-use technologies.

Q: How does being a veteran inform your outlook on the dual-use space as a whole?

I remember being a young, infantry platoon leader overseas (before 9/11) and buying ICOM radios out of pocket for some of my leaders because they increased our level of performance, but the military did not provide them. Today I am constantly thinking about our portfolio companies, their products, and whether they could solve a problem (or many) within the U.S. military. The good news is that the Department of Defense (DoD)’s innovation, connectivity, and outreach efforts are improving as we see with NSIN, Defense Innovation Unit, Office of Strategic Capital, and others. But we need to accelerate and increase the number of “windows” that startups can sell through to solve real-world problems of the military.

Q: What unique value-add does your fund provide to the companies in which you invest?

Durability. Since 2015 we have noticed many other venture capital firms start to reduce their levels of enthusiasm and engagement for a portfolio company as it encounters significant setbacks, such as during a pandemic or during the recent capital markets downturn. For many this is a Power Law mindset, and it is just easier for them to pack up and move on. That is not in our DNA. We may be a small firm, but we aspire to add way more value with our expertise, network, and relentless support that goes beyond just writing checks.

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NAME: Derren Burrell, Founder and Managing Partner

COMPANY: Veteran Ventures Capital

FOUNDED: 2019

HEADQUARTERS: Knoxville, TN

SECTORS: Space, Autonomy & Robotics, Quantum, C5ISR (Command, Control, Communications, Computers, Cybersecurity, Intelligence, Surveillance, and Reconnaissance), AI/ML, and Materials Science

PREFERRED ROUNDS: Series A

AVERAGE CHECK SIZE: $1 million

LEAD INVESTOR?: Yes

NOTABLE INVESTMENTS: Hidden Level, Asylon Robotics, Grist Mill Exchange, and Phase Four

Background:

Derren Burrell is the Founder & Managing Partner of Veteran Ventures Capital (VVC). Before this role he served as the Chief Operating Officer (COO) for TAG Resources, LLC where he generated a 5X return in 3 years culminating in an acquisition. A financial professional with over 28 years in the industry, he is an Accredited Investment Fiduciary, Certified Defense Financial Manager, and Level 3 Certified in the Secretary of Defense Financial Management Program.

Prior to his retirement from the Air Force, Derren was the Resource Director of the White House Communication Agency. He worked directly with senior White House staff, Congressional comptroller, United States Secret Service, Department of State, and Defense Information Systems Agency staff in all aspects of financial and contract management in support of the President, managing nearly $350 million.

Derren graduated from The Citadel with a Bachelor of Science in business administration, holds a Master of Science (MS) in cost analysis from the Air Force Institute of Technology, and a second MS in human resources from Central Michigan University.

Q: What was your path into venture capital?

During my 28-year career in financial management in both the government and private sectors, I personally experienced the challenge associated with gaining access to capital as a veteran-led business. After raising $2 million for a small veteran-led company where I was the COO, I saw a need to help bridge the gap to help veteran-owned/led businesses gain further access to capital. I founded VVC in 2019 to merge my two passions, financial management and veteran businesses.

Q: Tell us more about your investment thesis. Why does your fund focus on companies owned by prior service military members and veterans?

Our underlying thesis is to invest in veteran-owned and led companies building breakthrough solutions to the challenges facing the U.S. national defense/security industry. Veteran Ventures invests in technologies complementing the National Security Strategy, as this is where significant growth is projected within the federal budgeting process in tandem with private sector growth.

VVC interacts exclusively with companies that have military veteran leadership, recognizing the value of military experience, training, and character in business operations. VVC leverages these military principles to optimize businesses and take them to the next level. The market opportunity is huge; veteran leadership has set the precedent and has been the backbone of our country for more than 70 years (veterans founded businesses like Wal-Mart, FedEx, U-Haul, Kinder Morgan, RE/MAX, GoDaddy, Enterprise, among others). The government invests billions in developing our military. Now with greater technology, greater investment from the government, and greater educational opportunities, veteran leadership is more poised than ever to take businesses to the next level. These companies just need the proper access to capital, and that's Veteran Ventures Capital.

Q: What are some unique advantages veteran founders have when building dual-use and defense-focused companies?

Veteran founders have a “can do'' attitude when it comes to problem-solving and overcoming hindrances to mission accomplishment. Innovation occurs at the small business level, and having someone who understands the government process, exercises a disciplined approach, and brings resilient, innovative ideas to solve the problems facing today’s military is a key component of any business’s success. These traits are exemplified in today’s military.

Q: How does being a veteran inform your outlook on the dual-use space as a whole?

We have an extensive network of key veterans and leaders at all levels of the defense technology ecosystem. This helps us remain informed about emerging trends and how to anticipate which technologies will be adopted by the DoD.

Q: What unique value-add does your fund provide to the companies in which you invest?

Defense budgets are large and growing, and members of our team helped to write these documents while serving in the military. Our fund is aligned with these budget priorities and the National Security Strategy. As such, we know where the government is allocating resources for years to come. We employ this knowledge in each of our portfolio companies to help them scale and grow to take their firms to the next level.