Interview with Graham Plaster: General Partner of Expeditionary Ventures (Podcast Transcript)

[00:00] Richard C. Howard: Hey, guys, thank you for tuning into this week's episode of the Government Sales Momentum podcast. This week we have on Graham plaster. He's the Expeditionary Ventures general partner, very much involved with investing in and raising capital for new technologies that can solve national security needs. He's very, very knowledgeable about things like the civil process, some other ways you can grab government funding, but also talks about venture funding and some different funding types that you can combine because there are ways to get both government funding and venture funding and combine that with different programs. We're going to talk about that. We talk about conferencing a little bit about business development, virtual reality. We cover a lot of different topics. But I think that you are going to find whether you're a new company with a new technology or you've been doing this for a while, I think there are a lot of Douglas in here that you can take away and apply to your own business. Then as a reminder, check out our website, Dodcontract.com, if you'd like to work with us to help you improve your sales to the federal government, whether that's products or services, we have a lot of great programs that help businesses and we offer a free 30 minutes consultation. And without any further ado, let's get on to the show. All right, well, thanks for listening to the government sales Momentum podcast. Today. I've got Graham plaster on. He's a general partner of Expeditionary Ventures. He's done a ton of work in the federal sector helping national security, working with different companies, familiar with SBIR, more than familiar, and it has a lot of great points. I've been following them on LinkedIn for a while and want to welcome you to the show here, Graham.

[02:58] Graham Plaster: Pleasure to be with you today, Richard.

[03:01] Richard C. Howard: Yeah, I know thanks for coming on. I've been following you for a while now, and I've taken a lot of information from your post and some of your interactions, and I know you do a lot, but I wanted to keep the podcast focused today. But before we get into some of the things I talked about in the intro, maybe we could talk a little bit about your background.

[03:24] Graham Plaster: Sure, yeah. I went to the Naval Academy, graduated right after 911, and served eleven years active duty. Most of the first half of that was surface warfare, so I was on ships then was the Assistant Dean of Students at the Naval War College in Newport, Rhode Island. Got a master's degree while I was there. Focused on the blogosphere in Iran. So really kind of had a background in academic background, in social networking in the Middle East, and it got picked up for the Foreigner Officer program. From there, went to go learn Arabic in Monterey and came back to the Pentagon and served just one tour as a foreigner Officer in the Army Staff doing UN peacekeeping operations and Navy lies on work in the Middle East. So that was a really interesting tour from 2010 to 2013 and then got out, started a company called the Intelligence Community Inc. Which is a social network for people in national security and have used that network since then to do a lot of crowdsourcing of different things. We've crowd-sourced tech solutions for government. We've done a lot of staffing recruiting services for small businesses trying to bid on government contracts. And in general, I do a lot of business development consulting. And in the middle of there, I've done some advisory work at the Pentagon, State and Reserves, and also done a lot of hands on BD consulting for small to medium sized emerging tech companies. Okay.

[04:50] Richard C. Howard: No, that's great. Also, it just shows a lot of the credibility that you bring to the table here. Often we'll grab and find business developers that do really well, but when you combine that with your type of background, it really shows a complete understanding, especially when we're talking about the Department of Defense and some of the efforts that they're in need of how you go and you contract with them, the right people to talk to. But I thought right now for a lot, it's January of 2022, and for a lot of the companies that listen to this podcast, it's SBIR season. We have a couple of SBIRs coming up, one with the Air Force that I know a lot of people are targeting. Maybe you could talk a little bit about expeditionary ventures and we could pivot to silver after that. But when you're looking at companies for emerging technology, what are you looking for? How do you take a look at the company and say, hey, what they have? That solution might be perfect for a military Department of Defense or national security need. What does the process go through and what would company, what do you think would benefit them as they're thinking about their offering and if it would make sense for something like this?

[06:08] Graham Plaster: Sure. And I'll give you a little bit more background on Expeditionary Venture. So a couple of years ago, based on the social network that I'd built up, I thought it would be great to host an event in DC. Kind of like a shark tank event, to allow emerging tech companies to pitch solutions to investors who are interested in growing the next unicorn startup in the defense sector. Right. And so I was getting ready to organize this event and then covet happened. So we backed away from doing it as a live event. Meanwhile, another event that was based out of Fort Worth, Texas called America's Future Series, which has been running for ten years, was getting underway and they reached out to me and asked for some help. And I basically pivoted all of my energy to help them run an online event which was similar. And that was over a year ago, we brought together over 100 startups and a bunch of investors online for a pretty awesome event. And America's Future Series continues to do wonderful events with military leaders and defense innovation. But coming out of that event, which was in 2020, myself and Jack Ryan and Nick Breedlove, who are both based in Texas and both Navy veterans also we said we really think there needs to be a new venture fund focus on early stage hardware companies that have dual use in national security and the commercial critical infrastructure. And the reason why we think this needs to exist is because a lot of investors kind of cluster around cyber-security and AI, more pure software companies and more towards the growth phase after companies are already kind of through a lot of what we call the valley of death. So we saw across the innovation ecosystem a real gap of capital at the early stage in the hardware space because it's got several layers of complexity in their government. Contracting is complex, hardware is hard and early stage is risky. But we knew there were a lot of programs like the Simmer program and others that helped to de-risk some of that. And we want to educate investors across the country, the trusted capital, so the US capital market about how do you risk those investments and stimulate a lot of growth in those entrepreneurial circles. So we began the process of raising $150,000,000 fund for Expeditionary Ventures. In the meantime, we also have already put about 20 companies on term sheets to do direct deals with some of our potential limited partners for the larger fund. And then we're talking about in the next two months launching a mid tier fund, a rolling fund through Angeles, which I'll be able to get into more details with probably in February or March. But essentially there's going to be, by the end of the year, probably three different options for investors to get involved with expeditionary ventures. One through direct deals, two through a rolling fund, which is a subscription based fund where you pay quarterly to join, and then the larger $150,000,000 fund will be for family offices and high network individuals to join. But the thesis for that fund is, like I said, early stage startups with hardware already generating some revenue. It doesn't have to be a lot, it could just be a phase one suburb and with an interest in dual use. So that means national security and commercial. And we think increasingly that commercial use cases overlap with national security because technology is everywhere ubiquitous. So in the past maybe there was more of a pure delineation between things that were military or national security and things that are in the private sector. But nowadays technology is everywhere. We think that there's a lot of argument to be made for most things that are in the national security interest to also have scalability commercially.

[10:22] Richard C. Howard: Sure, yeah, those are great points.

[10:25] Graham Plaster: What do you think?

[10:26] Richard C. Howard: You mentioned some other programs aside from SBIR. Right, so SBI sounds like it lines up with what you're talking about, especially when you're talking about investing outside of the government. There are some programs like Strategy and Tactic I where you can take some of that investment and couple that with government dollars. What are some of the other programs that you think makes sense for these types of companies?

[10:51] Graham Plaster: Well, for emerging tech company, of course, you can look at things like the National Laboratories, you can look at DARPA and IARPA, you can look at broad agency announcements, which are the contracts that come out basically not looking for a specific solution, but having kind of a bunch of general categories. You can pitch ideas that, of course, you can work through. National Security Innovation Network insin or Defense Innovation Unit. They have a number of programs like Hackathons and Hacking for Defense and things like that that are designed to bring in new ideas. You could of course go through different innovation funnels like Defense Innovation. You could look at Nikapaia at Defense Intelligence Agency or Naval X with the Navy software with Special Operations forces. There's a long list of them and I curate a lot of them for my email distribution, which is the Defense Intelligence Innovation Ecosystem newsletter, DIIEsubstact.com. And every Monday night I host a live virtual happy hour where we feature different influencers across the defense innovation ecosystem. So the point is to try to bring people together for collaboration and then educate people on how to participate in a lot of these things.

[12:15] Richard C. Howard: Yeah, that's extremely important. I think it's one of the things company struggle with too. They start learning a little bit more about government sales and get past the point where they realize there's more to it than just seeing a solicitation and putting a proposal together. Especially with a new technology where a lot of times they're not even going to see a Solicitation because what they have may be groundbreaking or innovative. And maybe the government doesn't know they even need that particular technology yet. Getting to the point where you're matching them with decision makers, actually talking with the program managers and the engineers within the government and within some of these companies is extremely important. So I can see how attending your happy hours, maybe subscribing to your newsletter, things like that, can really be informative for a lot of these companies, that it could be really hard to do what you're doing right, like curating that information. It takes a long time to even understand where to pull it all from. So it sounds like it is a great source for some of these companies that are interested in working with the government and developing their tech further.

[13:17] Graham Plaster: All right, I appreciate that.

[13:19] Richard C. Howard: I'd like to talk a little bit about virtual reality. We're seeing more and more efforts within the Department of Defense, in particular being funded. Can you talk a little bit about where you see that going as far as maybe some of what you're looking at? I know I've seen a lot of it in training with the DOD, but maybe on that or some other areas where you are seeing VR and where you think it could go.

[13:43] Graham Plaster: Sure, yeah. For 2013 to 2019, I was the Senior Policy Adviser for Pentagon on cultural training, and one of the things I saw happening was that a lot of the language and culture training was taking place in these ISO emerging villages where you'd have actors and role players and language speakers, and these generally are pretty expensive to operate. You'd have to fly unit to the camp and have them put them up in hotels or on a base and have them run through scenarios. Sometimes in older days, there were Pyrotechnics involved and a lot of great experiences, but in a lot of ways it was not real because it was basically manufactured. And also it was hard to scale across the total force. So when you're talking about trying to get people contact hours, hearing other languages spoken around you, one of the great opportunities is 360 video. And so I went to south by Southwest in 2018, and my goal was to see all of the different companies that might be able to offer 360 video experiences that can be integrated into a language-learning environment, language and culture learning environment to not necessarily replace the ISO emergent villages, but at least to augment it and scale it to units that couldn't necessarily take the time or the money to fly to one of these training experiences. And so one of the things I saw was that a lot of the ARVR solutions that companies were trying to sell in the government, first of all, in order for ARVR to really scale and be popularized, it needs big enterprise clients because of, once again, the cost of getting hardware off the ground. Hardware is hard, and generally speaking, ARVR requires hardware purchases. So you need enterprise clients like the government to buy and say, yeah, this is how we want to do it. And the problem is that the companies that have the sales force to sell into a big enterprise client like government generally want to sell something more expensive. So if you have something that's a lower cost point on the scale of options like AR, VR, then the thing that's more expensive actually has a bigger sales force. And you see that with something like AWS. Right. For the more expensive the price tag, the larger the sales force you get. And then you get to fill a whole event with a lot of salespeople. Right. And then you changes the conversation. So what I saw happening at south by Southwest was that some of the solutions that I thought were better for government were actually cheaper. They didn't have sales people that would want to ever go after selling in the government. Right. In particular, I thought 360-video, like authentic video, was the best solution for authentic language immersion. Getting to hear, for instance, a lot of people speaking Dari or Arabic around you in a video I thought was better than having a game like environment where you had, like, game characters come up to you and talk to you in Arabic or something like that. But the price point for the game was much higher. Right. So zoom out from that and the influencers, really in defense and intelligence, augmented reality and virtual reality are Tyler Gates and Sophia Mashesa, who run the ARVR Association chapter for national security. Tyler Gates runs a company, Bright Line Interactive, which is a great systems integrator for everything ARVR and mixed reality, and Sofia, who was at Bright Line or Interactive Networks athwax so for anyone who's interested in ARVR for defense, they should probably connect with Tyler Gates and Sophia Mashasha.

[18:01] Richard C. Howard: Okay. Those are great points. And just working with clients and some companies on our side is the struggle from going from SBIR phase one, phase two, and I'll talk specifically about virtual reality right, in training, because it's possible to do some silver work, sell small scale, kind of like you're talking about some of those innovative technologies from smaller companies that don't have a huge sales team, right. Getting them into units within the government. But how do you transition that from some of these smaller sales or SBIR phase two to phase three and beyond to those longer term funded government contracts? Do you have any thoughts around that particular problem set, or do you mainly focus in the beginning kind of getting off the ground and some of the initial investment, what you're describing.

[18:57] Graham Plaster: What we call the Valley of death, getting out of kind of the R and D flywheel and into a program record is something that is important to the thesis of expeditionary ventures. We don't believe that every technology should be able to transition into a permanent program or Palm. On the other hand, a lot of good things are left in the cutting room floor that war fighter might have loved to at least try. Right. And so the question is, how can you create that environment where you or myself, when we were on active duty, could have had an opportunity to try out things that were in development and say, yes, I want this, and create a demand signal. In general, that's what every entrepreneur is looking for is that Dev-Ops opportunities to get their thing that they have into the hands of an operator and get feedback. Right. And they also are looking for if it's a good product that end user, to not just provide feedback, but to feedback, but to create a demand signal. Because as soon as they create that demand signal, all kinds of doors can open as far as making it to the next step. So if you're going through the sipper process, one of the most important things is you got to get a letter of interest from a unit somewhere showing, yeah, if you make this or more of this, I want it, I might like to buy it. Right. Well, how's the entrepreneur supposed to do that if they don't know anybody in the military? Right? So it's something that we do care about. I think if you look at the success rate in Silicon Valley, not every startup succeeds. A very low number of startups actually succeed. If you look at the success rate at DARPA, it's a high risk, high reward system. Not every innovation succeeds and they shouldn't. But on the other hand, we should create mechanisms that if something should succeed, it does succeed.

[20:59] Richard C. Howard: Yeah, no, absolutely. It's funny because just talking about that one piece of hey, how does the company get that letter of interest from the government, right, that doesn't know anybody in the government or the military? And just for those listening, just one thing that we found useful is you have to be beyond the stage where it's just an idea. But if you are selling commercially and looking to maybe modify or innovate to get it in the hands of the government, going to some of the military sponsored conferences, that is a great way to if you can actually bring your product there because as you're aware, a lot of times they're not targeted towards industry. I'm not talking about those conferences, but something more like ATA, for instance, which is targeted at the tanker airlift community where they're going to be going through their officer ship building briefs throughout the day, but then at night they're going to have a nice industry event where they'll be walking around with cocktails. But you have all the industry boots there. That's a great place if you do have one of those technologies because now all of a sudden you have the user but you also might have the requirement generator, like the wing commander, someone on staff kernel level and you also have flag officers and contracting personnel walking around. So it's a great place. If you have something hot or something that is really solving a solution, you're going to see a lot of those different personnel circling the wagons and you can then from there turn that into letters of interest, memorandums of support for phase two, etc. So those are great points. I was wondering just on that note because we were talking a little bit about events and you are at south by Southwest. Do you have any conferences that you might recommend for the tech company that's looking to go down this path?

[22:51] Graham Plaster: There's a million of them. Really? All the events that are hosted by America's Future series are excellent. They're all online, so you can just Google America's Future series. I'm helping to put on a VIP event at south by Southwest this year in March and it's open for tech companies to come and participate or even sponsor and you can find out more about that on my listserveDIIEsubstact.com. I'll be putting out a lot of information about it as it gets closer to March and then of course different trade associations like you kind of hinted at. NDIA is great with their big event that they host and then also appsia and Insane, of course the industry days. If people want to go to those, you can find out about those on Sam.gov or if you have an account, there's more events to attend both virtual and live than anyone could ever do. But there's some goodness in just showing up to that stuff and pounding the pavement so you can burn down real quick. If you're a small business and you try to attend all of them and you're an introvert and you hand out a couple of cards, you don't get anything back. But once you become a known quantity and you attend those and you start to actually become friends with people in uniform at the events, then the doors can start to open up.

[24:28] Richard C. Howard: Yeah, I agree. It's a huge part of relationship building and putting in the effort. You can't attend all of them, but I think picking a few to attend each year, maybe on a regular basis could be a great thing. And then we'll also list in the show notes for anyone that wants to check out anything that you've talked about during the podcast. They can make sure they've got a link to all of that. Just in closing, I want to know if you had any last things to say about either expeditionary ventures or that you want to put out there to maybe the small tech startup community about DOD sales.

[25:06] Graham Plaster: Yeah, if anyone is looking to raise money for their company and they kind of fit that category if you've already made a little bit, but you want to raise some to try to get over the Valley of Death and you got some sort of hardware component, you can reach out to us through Expeditionary VC where you can connect with me on LinkedIn. I'm happy to take a look at your pitch deck and kind of point you in the right direction. If we're not a good fit, we can kind of factor you towards another Venture fund taking Venture isn't for everybody. If you are really working on growing as for instance, an SUV, USB or an A company, think about it like this. As soon as you take Venture investment, then you're thinking in terms of selling your company, eventually you're diluting your equity and you're thinking in terms of exit strategies where you might want to get rolled up into another company in five to ten years because your investors are going to want to get their money back eventually, right? So Venture is not for everybody. Maybe there are ways that you can just borrow money and hold onto all of your equity if you're thinking in terms of passing your company down or something like that. But yeah, happy to talk to companies that would like to take investment and help them scale.

[26:22] Richard C. Howard: No, that's great. And you answered my last question, which is how can they contact you? So we've got there as well. If you do want to contact Graham again, this will all be in the show notes. You guys can click on it. Graham Plaster, thank you for taking some time to talk a little bit about Expeditionary Ventures and go through your background. A lot of insight, I think, not only just on my part, but a lot of the people listening to this today.

[26:43] Graham Plaster: Thanks, Richard, for the opportunity. I really appreciate it. Awesome.

[26:47] Richard C. Howard: Thanks again. Cheers.

[26:49] Graham Plaster: Cheers.

[26:50] Richard C. Howard: Hey, guys, Ricky here. I hope you enjoyed this episode of government sales momentum. If you did enjoy the episode, please subscribe to the podcast and leave a review. It's very much appreciated. If you're interested in selling products and services to the Department of Defense, I have something for you that you're not going to find anywhere else in the world. The team and I created a program that takes everything you need to win defense contracts and put it into one place. Up until now, only large defense companies and a small amount of people in the know have had access to how products and services are really sold to the Department of Defense. I've taken all of that information and put it in a step-by-step training module that shows you how to consistently sell to the US. Military. If you join our membership, not only do you get the model, but you get weekly sessions with former DOD acquisitions officers for training and guidance to answer your questions and a community of like minded business owners that want to partner on different opportunities to bid for subcontracting and teaming or just to discuss general strategy on how to sell to the DOD. You have access to every course I've created, every coaching session I've ever recorded in every interview with an acquisitions professional that I've ever conducted and we cover topics that range from defense sales planning and competitor analysis to SBIR and STTR former military sales. The list goes is on. Go to Dodcontract.com if you are interested and I would love to see you in the membership. Thanks.

If you enjoyed this episode, you can also check out The 3 Similarities between Military Aviators & Defense Contractors.