Reynaldo “Ronnie” Trevino and Rahul Singh are U.S. military veterans turned venture capitalists. They’re on the front lines of bridging the gap between the Department of Defense and veteran-owned startup companies. Ronnie served in the Army and Rahul is a Marine. Dual Use Ventures has partnered with General Assembly, Bunker Labs and Amazon. Dual Use Ventures helps active duty service members or veterans take the steps necessary to build their business while simultaneously helping the war fighter keep our country free with the resulting innovations adopted by the U.S. government. WATM sat down with Dual Use Ventures to get a better understanding of what they do and how they’re inspiring the next generation of entrepreneurs.
Usually what we would see is a technology or better yet a veteran entrepreneur in the space that is very DoD heavy. What we’ve come to learn is we come from a commercial background on top of military. Deciding the path forward really comes down to: Is there commercialization for that tech or start up? Another thing [to consider] is that if the DoD builds it, it doesn’t always have a commercial application. You don’t run into that too often but it’s a reality.
For example, we’re working with a retired First Sergeant and his technology startup. It is a counter-IED technology used all throughout the war. Now that the war is over he lost a customer. It’s not that the DoD left him out to dry. The point came when he finally said, ‘Guys, I get it.’ If you’re not commercializing, DoD can divorce you at any point in time. Case in point with him, this technology has evolved over the course of the war. It can sense a heartbeat through three inches of concrete. The software identifies a person’s vital signs and heartbeat and uses it like a finger print. The technology can sense a bunch of heartbeats in a room. It will know the difference between a specific, such as a grandmother, and she’s still okay.
You have this chasm of, ‘How do I commercialize this?’ Do I make a device that you can put in a child’s room that can be on the lookout for SIDS – Sudden infant death syndrome? So, we sit down with the entrepreneur, and we figure out what is that solid commercialization strategy but also what is a solid path going forward. On top of that, how big is that market?
What we really look for is, we look at the person, we look at the founder. We determine why a founder or a person is doing this. Why are they starting this company or why are they starting out on this adventure. We look for technologies and products that are both beneficial in government and commercial. It has to be big commercial markets. It can’t be be a super-niche thing. That’s not what we do. It has to be big so that we, as venture capitalists, can get some good returns for our LPs, our limited partners. Also, from the government side, we want to get technology that actually benefits the warfighter. Some of these technologies are innovative and can help out DoD or military become more efficient. To become better in some form or another.
One of our companies is called RoboTire. RoboTire is a robotic tire changer for tire shops. We took that, sold it to the Air Force and they loved it. They imagined it for all the ground vehicles and it is currently being installed at Travis Air Force Base. These are the types of businesses we look for. It comes to dual use, big market, makes sense and benefits the war fighter.
The website does the best job of summarizing it. But for those that don’t know what it means — it’s really America’s seed fund. It’s been around for a while. Rahul and I met at Stafford and our professors introduced us to it. Honestly, we didn’t see value [at the time]. I was building a connected car start up, so, I was building Tesla screens for existing cars. Rahul was picking amazing start ups for Amazon HQ. When we came back to it, we really saw the value for veteran entrepreneurs and military spouses getting into entrepreneurship. It’s America’s seed money. An advantage you have, especially as a veteran, is there is money that has to be allocated to you, a veteran owned, service-connected business.
I think what really put this into perspective is that we not only saw this as a useful hack for a veteran or veteran spouse to launch their business, but it was all the things I reflected on as an entrepreneur: ‘It was hard for me to get access to capital, hard to find my first customer, there are a lot of unknowns such as budgets for things that don’t even exist.’ In some ways I think Small Business Innovation Research does all the things I just mentioned.
It does it in a way that is probably not the best way, like going to the DMV (laughs). Waiting in line and a bunch of other stuff. If you’re a veteran or an entrepreneur and have some gaps in your knowledge, you’d be surprised how one of these proposals could actually help you put together a decent business plan. Two things: it’s a hack to get early financing because early startups are high risk. The other part is, ‘What is it going to cost to build this technology?’ and then securing your first customer using SBIR. We get really excited about this one!
Think of the SBIR as the government’s way to attract innovation and ideas and in turn giving non-diluted capital to those founders, so they can benefit from that type of innovation. DoD being the biggest, NASA, National Science Foundation, and all these other agencies attract innovation from the public. We love that but not many people know about it. We noticed the government give non dilute capital to submit your idea, prototype your idea, and ultimately find a customer in those agencies that I just mentioned. Think of it as a way the government can attract ideas that can help solve their problems…they look towards the private industry and this is their way of doing that.
It’s RoboTire but let me get a little more in-depth. The amazing thing was Rahul and I met this founder when he was building these robots out of his garage. There is something to be said about me meeting an early startup. One of the things we did when we first met him was asked him straight up, ‘Have you ever considered making the Department of Defense your customer?’ and he said, ‘It’s funny you should mentioned that. I worked at General Dynamics, we worked with NASA, and I’ve actually never considered that.’
He followed through with his phase 1 proposal and he got approved. He was accepted into a really prestigious incubator and during that time he reached back out to us. ‘Okay guys, I got my phase 1 approval but I don’t know where my customer is.’ We told him we’re on the ground with the war fighter every day, we know who your customer is, don’t worry about it, we got you. Fast forward — we take to Travis Air Force Base and we put him in front of his customer. He just really amazed me as a founder.
Not only did he have an amazingly talented start up to come into DoD but the person signing off on his paperwork was just amazing. Essentially what we were presenting to the Air Force was, ‘This robot changes all four tires of a vehicle. It pulls them off the rim, balances them, puts new ones on in under 10 minutes.’ I remember the woman interviewing us said, ‘You’re telling me you’re going to replace all of our technicians?’
He replied, ‘No, ma’am. What I’m telling you is the DoD is facing the same problems that the commercial side is facing.’ He broke it down real easy. ‘The demand for tire technicians is going up. Electric vehicles will burn through tires two to three times as fast as a gas-powered car. What I’m telling you is: I’m not going to replace your airmen, let my robotics do the hardest parts of their job. These young recruits coming in don’t want to be a tire changer, they want to be a robotics maintainer.’
He could have dropped the mic at that point because you don’t really need to have a lot of data to think about that. I think that is our best example of a success story because it shows how much a start up can benefit the war fighter and, again, the airmen who will be using this technology for the next 12 months are absolutely excited. As you know, in the military, it’s very hard to get a mechanic show excited. We’re going to make their job easier and hopefully more fun. We’re really excited about it and hopefully we see other branches of the military adopt this technology.
We as veterans have all the skills necessary for entrepreneurship. However, people will try to put you in a box. People say because you’re a veteran you need to fit a mold of what is preconceived a veteran should be. Ronnie and I personally do not think that is the case. We want to show that there is no typical path. That has been a narrative that has been pushed for a long time. ‘You’re out, you have to find these jobs where you have to take a step back whether that is something you don’t want to do or something you’ve done in the past job role.’
People persuade you to follow the same roles as in the past. We say that is all hogwash. Pursue technology. We want veterans in leadership. We want them to solve the next set of problems that our country, our people, are going to face. Together, as the next generation of innovators our mission is not yet over. You can still find something to serve your country through entrepreneurship. You can do something through SBIR and still be in the mission. We are here to connect those dots.
When we join the military, our networks are different. They’re different than all the folks that are building startups at Silicon Valley, LA or the other start up hubs around the world. We want to extend our personal network, our Dual Use Venture network, in a meaningful way if we see that type of entrepreneur who wants to serve their country through entrepreneurship through this process. We can be that point of contact, that foundational element for them. To educate them on the process and let them know they are fully capable of doing all the things they want to do.
Whatever gaps in their knowledge, we’re here to fill. They are perfectly suited for technology entrepreneurship and to serve their country. Much like they have done in the past when they were active duty, they have even more resources and networks, they just don’t know about it. We’re here to start that.
Honestly, I failed two startups. I failed forward and I’m really happy I did. I tell the veteran entrepreneurs we work with, ‘I wish I could tell you some success stories of exiting with $500 million but I got something better for you. We can tell you all the things NOT to do. One of those things that always circles back to SBIR, why it is so important for veterans to get back in the fight to utilize those mechanisms. There is going to be no better person to solve these problems than a service member who has experience in it or is out and knows a lot about it. Dual Use Ventures is putting out money where our mouth is on that.
If you see what is currently happening with the current airmen in the Air Force, they’re hacking their own problems. They’re 3D printing their own solutions. Very much what I think I the next 10 to 20 years is you’re going to go on to build billion dollar companies because, again, what you learn in entrepreneurship is finding a profitable problem to solve. These veterans and service members have them on their lap. My message is, take that problem and really capitalize on it or someone else will and they’re probably not going to solve it as well as you can.
We’re out fundraising. We very much want to align and connect with people who either have an affinity toward veterans or better yet they believe these veterans can go on and build these successful startups that we’re talking about. At Dual Use Ventures this is where we really come in an bridge that gap between capital that is our there and getting into the hands of servicemembers and their families who really need it to build their businesses.
For us the biggest thing now is really delivering solutions inside the DoD to the war fighter. That’s the biggest thing. Once you go down the route of finding a solution for the government, people ignore the commercial route. Don’t ignore that, that’s the worst thing you can do. For us, we’re working on both sides of the problem. Trying to scout and find solutions for the DoD while also encouraging veteran entrepreneurs to build their commercial venture.
Whatever it takes, whether they need resources or capital, Dual Use Ventures is well positioned to connect them to that. Any big company that has an affinity towards veterans and wants to encourage these types of entrepreneurial efforts for the government they should get involved with us. We are creating those types of environments where entrepreneurs can succeed. Get resources, get funding in a way that elevates them and encourages them rather than charity. This is not charity. We’re building something big and we know our brothers and sisters [in arms] have the capabilities to pull this off and have answers for them.
That is an amazing question. We purposely built our fund to invest in the early stages because we need veterans that stay grounded. Sometimes it’s just an idea on a napkin. Does that necessarily mean we’re going to cut them a check? I mean, I was that veteran that didn’t know anything but the reality of me having the talent to build it was always there. We don’t shy away but where we find the most success is that they’re beyond concept.
Lets go back to the First Sergeant, he has a piece of technology and he has to commercialize or they at least have a team in place. They don’t have to be experts but a team to work with and rely on. We know it’s a lonely road. [Another example] is that they have a product ready to ship or if they have it on a napkin – we have a team. Overall, early stage startups. Anywhere from Pre-seed, no revenue, all they way up to series A, where hopefully at that point you have some revenue.
We really want to unite veterans and unite the country through entrepreneurship. Service through entrepreneurship.
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