1/ let's chat about venture math in the defense industry.

When VCs are raising their funds, LPs want to know what sort of returns the VCs are targeting. Most VCs are targeting 3X - 5X (Few hit that ambitious target). 2/ How do VCs get to 3x or 5x? It's not by investing in a lot of businesses that return 5X. VC is a power law business, which means it's a business of outliers.

Rule of thumb might be 1/3 of a firm's portfolio will go to 0, 1/3 will break even, and 1/3 will generate the returns.

1/ Here is how the abomination that is the AT-ST came about. Spoiler alert, it comes down to compromises & mission creep.

"Initial Requirement: We need a small dropship deliverable armored sentry tower (ST) for forward operating bases with space for 4 sentries"

An early sketch:

https://twitter.com/madscienceskill/status/1599886993575800832

2/ "Requirement Creep 1: Can we make It mobile at full height?

1/ Here are my top 18 non-fiction American Dynamism books (w/ a national security focus) and why you should read them if you are serious about the space.

The first trio is focused on the conflict between the US / China 2/ The Hundred Year Marathon: China's Secret Strategy to Replace America as the Global Superpower by @mikepillsbury

This is the THE tome on China's grand strategy and is a must read since it shapes how many in power think about China.

amazon.com/Hundred-Year-M…

1/ Some exciting news. I'm taking over as the Managing Director of the Army Venture Capital Corporation (AVCC). AVCC was created by Congress in 2002 to be the venture capital arm of the @DeptofDefense. You can follow our progress here: labyrinth.substack.com/about 2/ Before I get into the why, what and how, a quick history of AVCC.

In 1999 Congress authorized the creation of In-Q-Tel, a non-profit venture firm to serve the needs of the intelligence community, beginning with the @CIA

1/ The @nytimes piece on UFOs is pretty 🤯. Do I think its likely we're currently being visited by intelligent extraterrestrial life? No, but I think its a reasonable explanation for the observed phenomenon given the range of possible explanations.

nytimes.com/2019/05/26/us/… 2/ There are 5 possible explanations:
1) Its our own classified tech
2) its the tech of another state
3) The sightings are caused by hysteria, false perceptions, etc
4) The objects are real, non-sentient, undiscovered phenomenon
5) The objects are evidence of ET Intelligence

1/ Sometimes I find myself giving the bull case for venture capital as an asset class.

I thought y'all might find the pitch interesting so I'm going to share it

Note If you're pitching your market/asset class you've already lost. I just refuse to surrender so 🤷‍♂️ 2/ *Disclaimer: I’m not offering investment advice here and everyone should make their own investment decisions. This is just an overview of the bull case for VC.*

Here we go!