Venture Capitalist Bilal Zuberi Urges Deeptech Founders to Diversify Beyond Defense, Citing Early-Stage Distractions

MENLO PARK, CA – Veteran venture capitalist Bilal Zuberi, founder of Red Glass Ventures, has issued a notable reminder to deeptech founders, emphasizing that the sector's innovations are not exclusively bound to military or government applications. In a recent social media post, Zuberi cautioned that pursuing government funding and sales, particularly in the early stages of a company’s development, can become a significant distraction.

Zuberi, who recently departed Lux Capital to launch his new firm focused on the intersection of AI and the physical world, stated, "Deeptech doesn’t have to be defensetech, or have to sell to military/government. Seems like founders sometimes need to be reminded. For some companies going down the government funding/sales path can be a big distraction, esp in early days." This perspective highlights a nuanced view within the burgeoning deeptech investment landscape.

Deeptech, characterized by its reliance on scientific discoveries and engineering breakthroughs, encompasses a wide array of fields including artificial intelligence, quantum computing, biotechnology, and advanced materials. While defense technology (defensetech) has seen a surge in venture capital interest, driven by geopolitical instability and government modernization efforts, Zuberi’s comments underscore the broader potential of deeptech. Global deeptech investment has doubled in the past decade, with the U.S. and Europe leading in capital deployment across diverse sectors.

The allure of government contracts for startups is significant, offering large budgets and potential market validation. Programs like the U.S. Department of Defense's (DOD) Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) aim to bridge the "Valley of Death" for early-stage companies. However, navigating complex and lengthy government procurement cycles, often spanning years, can divert critical resources and focus from commercial market development. This bureaucratic burden can be particularly challenging for nascent companies with limited capital and personnel.

While some deeptech firms, such as Anduril Industries and Helsing, have successfully secured substantial funding and contracts within the defense sector, their path often involves specialized teams dedicated to government relations and compliance. For many startups, attempting to serve both commercial and government markets simultaneously without sufficient scale can lead to strategic misdirection and operational inefficiencies, validating Zuberi’s concern about potential "distractions" during crucial early growth phases. The venture capital landscape increasingly recognizes the need for patient capital in deeptech, which typically requires longer development cycles and higher R&D investment compared to traditional tech startups.