Think of five of the biggest VC fan favorites in defense tech off the top of your head. Silent Ventures has probably backed most or all of ‘em—including Saronic, Castelion, Hadrian, AMCA, Armada, CHAOS, and Firestorm—from the earliest of early days.
The defense tech VC firm—run by solo GP Jackson Moses—seems to have something of a Midas touch, or at least extreme prescience, when it comes to spotting winners before the crowd does, and that early-stage hit rate has caught the eye of some of the biggest names in venture capital.
Earlier this year, Silent Ventures closed an $85M Fund II, Moses exclusively told Tectonic, with Founders Fund Partner Emeritus Brian Singerman and Quiet Capital managing partner Lee Linden’s secretive specialist-VC-backing fund GPx coming in as an anchor LP.
According to Moses, that pretty much means GPx is getting its exposure to early-stage (pre-seed and seed) defense startups through him, and they “have enough skin in the game to where I’m excited about it,” he told Tectonic.
Judging from Silent Ventures’ early-stage portfolio so far—which includes “14 defense and deep tech unicorns” through the firms first fund and affiliate vehicles—per Moses, that seems like a solid bet.
Fundception: To back things up, GPx was secretly launched last year by Singerman and Linden with a reported $500M first fund (GPx told Tectonic the actual fund size is larger), and it has a pretty unique approach to venture capital.
Instead of betting on startups directly, the discretionary capital fund (a “fund of funds” of sorts) bets on specialist VCs that are closest to the action and that they believe are best suited to spotting sector winners—and best suited to getting early access to under-the-radar or harder-to-access startups and deals.
- GPx directs a smaller portion of its capital to backing emerging niche VCs investing at the pre-seed and seed stage, and the remaining chunk towards partnering with those VCs on later-stage (Series B and on) investments in their portfolio winners
- For GPx, that gives them an early foothold in the big-name companies before the behemoth Sand Hill Road firms swoop in at later stages. For emerging, smaller-fund VCs, having GPx as an LP lets them keep participating in rounds they might otherwise be priced out of and see their percentage ownership diluted.
- That often forces the specialist VCs to raise special purpose vehicles (SPVs) outside of their funds to keep backing their early bets when they get hot and go mainstream. GPx is designed to sidestep that whole mess. Sounds like a win-win.
Early bird: That makes Silent Ventures a prime candidate for their defense tech exposure, and notably, that process is pretty much how Silent Ventures has operated so far.
“We’ll be the biggest check—sometimes the only check—into a pre-seed startup, and then we’ll follow on to either co-lead or lead at seed,” Moses said. After that, “We can continue to follow on with sidecars indefinitely, and that’s a really nice thing about having such an active and deep-pocketed LP base.”
“We’re very fortunate to have done every round of Saronic, we’ve done Armada many times over, we’ve done Impulse [Space] many times over,” he added. “We want to be in the best names, period, and if those names graduate from the fund level to something external of the fund, we’ll still find a way to do them; It just won’t be from the fund,” meaning via SPVs or other standalone vehicles.
Grind in silence: Bringing in GPx as an LP—alongside several other big institutional backers—in Moses’ $85M second fund also comes as the hype around defense tech reaches a fever pitch.
With Silicon Valley’s mega-funds becoming increasingly active in defense, especially at the growth stage, the specialists like Silent Ventures that are able to see through the BS and spot winners before they become obvious are a precious asset for LPs looking to separate the glitter from gold.
- For Silent Ventures, having deep-pocketed LPs like GPx to return to in later-stage rounds keeps them in the action with a bigger spot on cap tables of the hottest startups.
Silent but deadly: With $85M in fresh capital to deploy into the next generation of defense startups, Moses says he’s going to keep operating as he has, “prioritizing founders, their needs, and their demands.”
- Silent Ventures has already backed a handful of pre-seed startups out of Fund II, and plans to “do 13 to 15 total names,” he said. “We’ll double-down into our breakouts—pre-seed into seed—and at the end of the day, we’ll probably have somewhere between 20 to 25 total investments, but that’ll only be across 13 to 15 companies.”
Backing the boom: Those bets are, for the most part, pure-play defense—the go-boom stuff especially.
“We don’t have vice clauses at Silent Ventures. We think that inhibits some very relevant investing, and we don’t necessarily agree with the Ivory Castle view on ethics and philosophy in combat,” Moses said. “We’re huge believers in soft power and diplomacy—we would rather everything get solved through political, nonviolent means—but we have many irrational state actors in this world, and we have many irrational people, and we don’t argue with history. Unfortunately, I think that soft power without the implicit threat of hard power is pretty meaningless.”
“With that in mind, we are big investors in kinetics,” he added. “We’ve done every relevant missile company from the earliest of stages, and we’re seeing that, more than ever right now, especially with the interceptor crisis, that those were good bets, and those are bets that we will continue to make.”
For Singerman, he has “no doubt Jackson will be around a generational defense company and have the smarts, relationships, and courage to go all in.”
