As we explored in Part 1 and Part 2 of this series, the nature of conflict is evolving, and established deterrence methods may no longer counter threats effectively. Asymmetric deterrence requires the rapid adoption and scaling of innovative, cost-effective technologies — many of which originate in the startup ecosystem. Over the past 25+ years, IQT has operated at the intersection of startups, venture capital, and government. This experience has taught us that transforming emerging technologies into national security advantages isn’t just about innovation — it’s about alignment. Startups, investors, and government agencies each face unique pressures and speak different operational languages. Creating deeper mutual understanding of these makes collaboration more effective and is a fundamental pillar of a successful deterrence strategy.  

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Financing and Building Impactful Startups

One of the key things we've observed over time is that effectively leveraging startup innovation for national security requires startups, investors, and government agencies to understand each other's challenges. Investors, for instance, must appreciate the substantial differences between government procurement cycles, which can exceed 6-12 months, and those typical of commercial markets, which are typically shorter. Although government contracts can be lucrative, the revenue from them tends to be unpredictable, or "lumpy," which means companies need committed investors willing to accommodate extended timelines. Leading venture firms thoughtfully assess whether startups they back are capable of operating during long periods without government revenue. They also select co-investors very carefully, ensuring those investors have the patience and commitment to support startups through those periods.  

Startups, in turn, must strategically manage their cash runway, internalizing these procurement realities. Leading ones frequently monitor their financial resources to ensure they have the resilience needed to deal with extended government sales cycles. Extended government sales processes require careful financial discipline and strategic fundraising. Those startups with “dual-use" business models — serving both commercial and government markets — often experience diversified revenue streams, resulting in less financial pressure. However, startups that are primarily defense-focused need particularly rigorous financial planning.

Another area leading startups pay careful attention to is their strategies for scaling and ensuring robust supply chains. Various elements contribute to this including product design, vendor selection, and contingency planning. For example, successful startups incorporate Design for Manufacturability (DfM) principles early to streamline production-line assembly and efficient scaling. Verifying supplier flexibility, reliability, and security is equally important, as is establishing backup sources for essential components. Although these considerations may seem burdensome for early-stage companies, investing time and resources into these areas up front significantly reduces risk and enhances long-term prospects.

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Modernizing for the Mission

From the government side, fostering effective asymmetric deterrence calls for a procurement culture that is both agile and inclusive of startup-driven innovation. We have observed over time that the most effective government teams creatively navigate the full range of available procurement tools to accelerate outcomes, adopt streamlined and flexible testing and evaluation practices, prioritize incremental advancements over distant "perfect" solutions, and simultaneously consider multiple competing technologies. They understand that startups can rapidly iterate and evolve their offerings — especially when they are coached by collaborative partners. Crucially, agile government teams build cultures that responsibly embrace risk and connect procurement officers closely with operational end-users. Outcomes improve significantly when procurement professionals stay closely engaged with warfighters and other users; greater distance, by contrast, often reduces effectiveness.

Forward-leaning government agencies also add value by being active design partners, especially when it comes to assisting startups in "hardening" products to withstand harsh operational environments common in national security missions. Challenges such as sophisticated cybersecurity threats and electronic warfare (EW) scenarios are typically not prioritized by commercial product managers. Most startups also lack deep expertise in modern EW capabilities and have limited access — if they have any at all — to the necessary test environments and equipment. Both government and commercial partners can play a role here, helping to ensure that startup technologies are not only innovative but also robust and mission ready.

The final thing that sets leading government teams apart is that they carefully assess whether their procurement processes are optimized in ways that enable them to discover innovative startups, engage efficiently with them, and ultimately acquire their technologies. Effective government leaders also reflect deeply about whether their organization's culture encourages — or discourages — thoughtful risk-taking. Is there really genuine reward for taking chances on startup technologies? Without the right risk-oriented culture, success is likely to remain elusive.

Aligning the efforts of startups, investors, and government isn’t easy, but it’s more essential than ever in today’s security environment. Asymmetric deterrence isn’t just a strategic concept — it’s a call to action. Success will hinge on the ability of the United States and her allies to modernize how new technologies move from ideas to impact — and that means embracing more risk, driving for greater alignment between actors in the innovation ecosystem, and fostering procurement cultures that reflect the lightning-fast pace of technological change. This isn’t just about innovation — it’s about getting ahead in a world that won’t wait.