Approach
The buyer first,
then the record.
We underwrite the customer's problem before the technology's promise, enter early beside investors we know, and hold for as long as the business needs.
How We Invest
Five steps, in order.
01
Buyer first
Who pays, why they pay now, and what breaks without the company. In defense, that is the program office and the budget line. Commercially, it is a customer already paying for the job.
02
Read the record
Contracts, backlog, unit economics and the cap table exist before a round is raised. We read them before we weigh the pitch, and we value what a company has built over what it promises.
03
Enter early
Our first check usually goes in at the seed or in a convertible round, beside a specialist fund or lead investor who set the price. We follow on in the later priced rounds, as new leads set each price.
04
Size to risk
The smaller check goes where the risk is highest. The larger one goes where assets, contracts and recurring revenue protect the downside. Position size follows the company's risk, not a template.
05
Hold through
A family office has no fund life. We hold through qualification cycles, plant builds and program decisions, and never push a founder to sell before the contract that makes the company valuable.
Discipline
Four things we will not fund
We say these up front so a founder does not spend a month finding out.
01
One customer
One customer and one contract make a contract, not a company. We look for more than one buyer and, in defense, a commercial market that exists without a defense budget.
02
Ahead of demand
A plant, a fleet or a sales team built for demand that is not yet contracted destroys capital. We fund new capacity only against signed orders and paying customers that already exist.
03
Priced on the story
A crowded category bids prices past what the business can return. If the valuation needs a rare outcome to give the money back, we pass, however good the company.
04
Unclear economics
If we cannot name the buyer, read the record and explain the economics in plain words, we do not invest, whoever the co-investors are and however fast the round is closing.
These are gates, not weights. If one applies to you today but will not after your next milestone, tell us. We would rather know.
Where We Invest
Three areas, one test
These are the three areas where we have operated, and where our judgment is worth the most to a founder.
01
Defense and the Industrial Base
Companies that make what the Department of War and its allies need and cannot get enough of: munitions and guidance, the parts and factories behind them, and the software that gets a system approved and kept in service. Informed by years inside the Navy's buying process.
02
Energy
Power generated and stored where it is used: microgrids, on-site renewables and the resilience a data center, a base or a factory now has to buy for itself. Patrick George is President and a board director of Hover Energy.
03
Applied Technology
Software, data and automation brought to industries that still run on paper and phone calls: agriculture, vehicles, auto care and the trades. We look for recurring revenue from customers who already pay for the job the old way.
Stage
We invest at the seed and in the rounds that follow, and we follow on through the Series B as outside leads set the price. Our first check is usually the smaller one; conviction is expressed in the follow-on.
Structure
SAFE's, convertible notes and priced preferred rounds, directly in the company. We also invest as a limited partner in specialist early-stage funds and co-invest beside their portfolio companies.
Our Ethos
Three Principles
01
Ride for the Brand
"Son, a man's brand is his own special mark that says this is mine, leave it alone. You hire out to a man, ride for his brand and protect it like it was your own."
Red Steagall
02
Moral Compass
"Look for three qualities: integrity, intelligence, and energy. And if you don't have the first, the other two will kill you."
Warren Buffett
03
Courage of Conviction
"The most contrarian thing of all is not to oppose the crowd but to think for yourself."
Peter Thiel