Soldier-entrepreneurs are sadly still a rare breed in Silicon Valley, despite the region’s origins in Cold War defense spending. While the courage and persistence required to fight on an overseas battlefield (or the bureaucracy of the office-based) would seem perfectly suited to the founder’s struggles, the reality is that the journey from soldier to CEO is a long and arduous transition.
A few organizations have sprung up over the years to facilitate the jump. For example, Patriot Boot Camp, which I featured in 2018, works from the early days of the startup journey to help seasoned founders learn the key skills to start a business and raise funds. Yet there is still a lack of networking and funding that specifically targeted this group of entrepreneurs.
This is the opportunity Emily McMahan and Sherman Williams, the two managing partners of Academy Investor Network, saw when looking at their peers at the five US service academies. The company is targeting a first final fund of $ 50 million and today announced the closing of its flagship investor, insurance and financial services provider USAA, which will invest $ 2.5 million. Prior to USAA, the fund’s first investor was Scout Ventures, which focuses on cutting-edge technology and where McMahan is a venture capital partner.
McMahan graduated from West Point in 2001 at the start of the War on Terror. I “really went straight into the action after 9/11,” she said. From there, she grew into a startup targeting the federal market, before founding the Capitol Post, which has taught entrepreneurial skills to veterans and their spouses and also had a collaborative workspace in Northern Virginia before. to join Bunker Labs in 2019.
“My career has always been about community, working with entrepreneurs and harnessing the energy of the veteran entrepreneur community,” she said. She is based in DC and also serves on the board of directors of Patriot Boot Camp.
Meanwhile, Williams is a native of the Naval Academy, graduating in 2003 before completing four deployments amid the Iraq War, which began weeks before graduation. He eventually ended up at the Booth School in Chicago, where he studied finance and oriented his career towards investment banking with a focus on mergers and acquisitions. “I knew I needed to learn a lot of things,” he said. I “started investing and advising startups as a banker, then I decided to work with Emily to start AIN Ventures”. He is based in New York.
The company’s first foray into the business was to create an investment syndicate made up of alumni of the five service academies, which was launched in June 2020. “We have astronauts, we have Navy SEALs.” , said McMahan. “We really think we are positioned very well as a group because we have all been through it on active duty, and now we continue to see it and continue to serve.” The union has invested in a handful of deals since its launch, including Polco, an online community engagement platform for local governments, and the online identity service ID.Me.
“This is also where a lot of our service academy graduates are thrilled to sit down at this table and help these companies grow, connect, hire, all of those things,” McMahan said. . “So we’re really happy to be on par with some of these other institutions – the Harvards, the Stanfords – which also have these kinds of unions. “
Williams said the union’s goal was to shape the company’s investment processes before moving to a more traditional venture capital fund model. They started the fundraiser in January.
The new fund has a two-pronged thesis of investing in veterans across industries while selecting startups creating “dual-use” technologies that are useful to the private sector and governments. “Civic technology, disaster technology – think FEMA – defense technology, obviously the military, intelligence agencies and space technology. Things in and around the climate that will affect voters and governments, ”said Williams as examples of where he sees the company investing. “We want the business, when it reaches maturity, to make the majority of revenue outside of government. “
The company is focusing its investments on the scene right after the product has matched the market, although as the veterans pipeline can be a real challenge, Williams said the company will invest selectively at the pre-seed stage there. low.
The company is also looking to diversify the ranks of venture capitalists and founders. McMahan said, “I’m a woman, Sherman is an African American, you know even in the military we’re kind of a unique team, so we think we’re able to reach an audience as well. much larger under-represented. minorities, women and groups, and we think we’re pretty attractive in terms of a team. ”
The USAA’s flagship investment is perhaps not surprising given the financial services company’s focus on serving members and veterans. He has made other investments and sponsorships around veteran entrepreneurship, including in Patriot Boot Camp. The company has also invested directly in startups such as PrecisionHawk and Coinbase.