Startups with dual-use applications are increasingly looking to the government as a lucrative customer, with the Department of Defense (DOD) being a prime target. According to Rebecca Gevalt, managing partner at Dcode Capital, the key to success lies in figuring out a repeatable way to get government revenue, rather than relying on grant money or other nondilutive funding.

The DOD, with a budget request of close to $850 billion for 2025, is actively seeking to work with startups developing AI, autonomous systems, quantum computing, and space technologies. Startups can tap into this lucrative market through programs such as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs through DARPA. However, Gevalt advises startups to have a partner to guide them through the process, as only 16% of DOD SBIR-funded companies have made it to commercialization contracts over the last 10 years.

It's not all about defense, though. Gevalt's firm, Dcode, is heavily focused on investing in startups that handle and analyze data, as well as those that offer cybersecurity solutions. And, despite the upcoming U.S. election, startups shouldn't worry too much about contingency plans, as the government's need for data, tools, and cybersecurity will remain a priority across administrations.