Domain: Defense Tech, Supply Chain Security / GovTech, Dual-Use B2B
Stage: Ideation & Validation
When: November 2025 – March 2026
Team Skill Set: Co-founder with an elite intelligence-unit military background who previously founded and served as CEO of a medical device company; Co-founder with a strong technical and interpersonal profile, experienced helping founders through fundraising and hiring.
Thesis
The two founders set out with a clear filter before they even had an idea: find a domain that leveraged their combined strengths, that felt big enough to hold their interest for a decade, and that sat on top of a real, structural tailwind. They spent weeks running structured ideation sessions, throwing out domains and testing them against that filter.
Both partners had strong backgrounds in defence, so that became a natural place to start exploring. As the interest in supply chains started to surface, they knew one thing for sure – they wanted to stay on the software side of the problem, not hardware. That wasn’t incidental – it was the explicit lesson they carried in from earlier ideation attempts, and it mapped to where they felt they had real added value: it played to their own experience, it was the layer they were personally excited to build, and they felt software was the underserved point of leverage in a space where most existing players leaned hardware-first.
As they dove deeper into this area of supply chains, they first came to a structural observation: modern supply chains, especially in hardware-heavy industries, are made of an enormous number of small, disconnected moving pieces – vendors, sub-vendors, shipments, part numbers – and almost nobody managing them has a real, unified view of the whole chain. It’s an area that’s inherently hard to track and hard to manage. Second, and following directly from that, came a quality-control observation: that same fragmentation makes the chain genuinely vulnerable – to neglect, to counterfeit parts, to components that simply go unmonitored for months – and that same blind spot could just as easily be exploited on purpose, not just fall through by accident.
Defense and government bodies were chosen as the entry point for a practical reason – tight, relationship-driven networks the founders could access quickly gave them fast, credible validation. But the intended destination was wider – the plan was to use government work to get a foothold, prove the model, and then carry it outward into large commercial and civilian buyers, where the founders believed the bigger, more scalable business actually lived.
“It’s not really about war. It’s about the fact that nobody managing these supply chains actually knows what’s inside them – and once you see that, the malicious case is just one more thing hiding in the same blind spot.”
Validation
On the defense and government side, the team sat repeatedly with the Ministry of Defense and several military bodies, going deep with the people who actually own supply-chain risk day to day. The reception was strong and specific: officials described being unable to say with confidence what was really flowing into their own systems, or where to even begin looking – a management and visibility problem well before it was ever framed as a security one.
The team then carried the same pitch outward to critical infrastructure and, eventually, to large commercial and industrial buyers – energy, gas, and water utilities – testing whether the thesis held once “defense” was removed from the sentence. A large energy company, a national water authority, and several gas-pipeline operators all engaged, and the economics landed cleanly with at least one of them: a single bad or degraded connector in a gas pipeline could shorten a decades-long failure timeline down to just two years, with consequences far exceeding the cost of prevention.
“A senior Ministry of Defense supply-chain official put it starkly: if he lifted a single floor tile in his office, he said, the exposure underneath would reach the edge of the earth. It’s the same enthusiasm that I wanted to see from Apple, from Nvidia, from Samsung, but it just wasn’t as painful for them.”
Why it didn’t progress
1. With defense-tech, geopolitics is another variable impacting your TAM. Which countries you can sell into shifts with a geopolitical map that changes fast – alliances form and break faster than most planning cycles account for. Even the US isn’t a fully safe harbor: Israeli-founded companies have found themselves unexpectedly entangled in intelligence controversies – as happened when a Payoneer-issued card surfaced in the investigation of a Mossad operation – leaving lasting reputational residue that shrinks the addressable market for Israeli-origin defense software companies.
2. The commercial and civilian signal never matched the defense signal – and that’s the real story. Since defense was only ever meant to be the foothold, not the destination, a soft response from energy, gas, water, and other commercial buyers wasn’t a minor gap to explain away. It was direct evidence against the core thesis: that this was fundamentally a management and quality-control problem broad enough to matter far beyond defense. If that were true, commercial buyers should have felt the pain just as acutely. They didn’t.
3. The fundraising template didn’t fit the market. The team opened their round anchored to a relatively high valuation, modeled more on how a cybersecurity company typically raises. In hindsight, that was a mismatch: this was a rawer, less-proven market that needed a longer warm-up before that kind of story could land with investors. Lowering the number later didn’t fully undo the signal the initial number had already sent.
4. Momentum built faster than substance. Heading into fundraising meetings, there was real pressure to present the trajectory as a clean ascent – validated customers, aligned signals, obvious next steps – even in areas, like the civilian side, where the picture was genuinely more mixed. That gap between narrative and reality showed up in investor conversations.
5. The one offer on the table wasn’t enough to justify the road ahead. A modest pre-seed offer came in from an investor with relevant sector experience. The team ultimately decided the amount and terms weren’t sufficient to commit to what both founders knew would be a long, budget-intensive, multi-year sales cycle into government and defense procurement – and chose not to take it.
“We made a very hard call, and honestly, we still wince about it. But it was the right one. We’d spent almost a year building this together, day after day – and we didn’t feel we’d reached the point where saying yes would have been the right kind of yes.”
Insights
1. Sequence partner, domain, then problem – in that order. The founders’ framework: find someone you deeply trust and enjoy working with first. Then find a domain broad and interesting enough to hold your attention for a decade. Only after that, go looking for the specific problem worth solving. Reversing the order – chasing a hot problem first – is a common trap.
2. Build where your edge actually is, and say so early. Choosing software over hardware wasn’t a minor implementation detail – it was a deliberate bet on the founders’ real expertise and interest, and on an underserved layer of the market. Making that call explicit early gave the whole ideation process a much sharper filter.
3. Fundraising templates should match market maturity, not category prestige. A high-valuation, fast-moving raise built for a hot category like cybersecurity doesn’t automatically transfer to an adjacent, less-proven market. Forcing the wrong template can undercut a genuinely good idea before investors even get to evaluate it.
4. A seemingly big market isn’t enough without a visible exit strategy. Investors weren’t only weighing pain and willingness to pay – they were also looking for a legible pattern: a strategic acquirer who’d pay a premium, or a plausible path to an IPO. Without that pattern on the table, even real pain and real revenue potential wasn’t enough to close the round. The founders don’t fault the investors for passing on that basis – a market can be real and still not be venture-shaped yet.
5. In hindsight, a smaller, quieter first step would have de-risked the raise. The founders’ own retrospective plan: raise a small friends-and-angels round from four or five people with real sector relationships, spend a few months deepening customer conversations and ecosystem understanding, and only then approach institutional investors with a sharper, better-grounded story.
6. Personal and professional backgrounds can open doors fast in tight-knit worlds like defense. Deep personal networks compressed months of cold outreach into days, although access alone didn’t change the underlying maturity of the market or the fundraising math.
“There’s always something to do – things change, things move. Even a company that looked shut out of a market can end up thriving there a year later. It’s the gap between what’s certain to happen tomorrow morning and the potential you’re actually imagining that made us make the decision to stop.”
