NAME: John Adams, Portfolio Integration (Platform) Lead

COMPANY: Lockheed Martin Ventures

FOUNDED: 2007

HEADQUARTERS: Bethesda, MD with a large presence in Palo Alto, CA

TECHNOLOGY VERTICALS FOCUS: Autonomy, Artificial Intelligence and Machine Learning (AI/ML), Advanced Electronics, Materials, and Manufacturing, Weapons, Aerospace and Space, Artificial Intelligence and Virtual Reality (AR/VR), Bio & Climate Tech, Communications and 5G, Cyber, Data, Next Gen Computing, Quantum, Power and Propulsion, Sensors, and Human Potential. Anything of interest to the Pentagon, intelligence community, and global security customers.

PREFERRED ROUNDS: Seed - Series B

CHECK SIZE: $4,000,000 - $5,000,000, but we’re flexible in going above or below that range for the right opportunity, with reserves to follow on

NOTABLE INVESTMENTS: Hawkeye 360, Firestorm, Launchpad, EpiSci, GuRu, Slingshot, Atom Computing, Hidden Level, Ocean Aero, Skydio

Background:

John is the Portfolio Integration Lead for Lockheed Martin Ventures. John leads efforts to transition portfolio company technologies into Lockheed Martin business and fosters collaboration between the portfolio, Lockheed Martin, and the defense industry. John acts as a program manager for Lockheed Martin Ventures’ research and development programs. He also assists in investment deals in climate tech and corporate operations.

Prior to his current role, John supported Lockheed Martin Space’s Special Programs Line of Business as the Business Development lead for ground and edge processing and exploitation, AI/ML, data fusion, and novel phenomenologies. Before that, John was a Business Development and Capture Manager covering maritime autonomy, anti-submarine warfare, and has won new programs as large as $75M from defense and intelligence community customers. Before becoming a business development professional, John worked in air traffic control and began his career at the National Transportation Safety Board’s (NTSB) command center in Washington, D.C.

John earned a Bachelor of Science in Aeronautics, as well as a private pilot certificate, from Embry-Riddle Aeronautical University in Daytona Beach, FL, and an MBA from University of California, Berkeley’s Haas School of Business. John enjoys reading, marathons, motorsports, and supporting D.C.-area sports teams.

Q: What unique characteristics does Lockheed Martin Ventures look for in potential investments as a corporate venture capital fund (CVC)?

We need to have an identified strategic value in the investment. Our charter mandates that we take a look at how investments benefit or compliment Lockheed Martin’s strategy, products, services or aspirations, and how it benefits the defense industrial base.

We look for start-ups that have a dual use focus or dual use capability; a technology or capability that has both commercial and defense use cases. Ideally, the development of the product and company is early enough to where Lockheed Martin Ventures can offer insights and resources for commercial solutions to fit security applications with light tailoring.

Q: How does being a CVC affect how you invest in companies?

As a CVC, we want to see enthusiasm from one or more of our four business areas to move forward with an investment. While we weigh venture-scalability and financial returns, our primary objective is strategic value-add to Lockheed Martin. We want to incubate and integrate new capabilities and technologies into our existing platforms through our investments.

Given our role in global security, we consider additional characteristics, such as supply chain security and future business interests. We also look for Lockheed Martin’s values reflected in a potential investment: Do What’s Right, Respect Others, and Perform With Excellence.

Q: As the venture arm for one of the U.S.’s largest defense contractors, Lockheed Martin Ventures is uniquely positioned within a sector that has seen a sharp increase in venture capital (VC) interest. How do you think about collaboration with other investors in the space? How do you think about representing the Lockheed Martin brand within the dual-use VC ecosystem?

In many cases, our participation in the round serves as a validation of the start-up’s technology and its utility. We connect and share our company’s expertise with those in the ecosystem, particularly those investors who are as passionate about supporting our customers as we are.

We are a dual-use and deep-tech investor with the legacy of supporting defense and national security customers. We are able to inform what missions a new capability could support where a traditional investor may lack that expertise. We strive to be a resource for an investor and connect with founders that are curious about dual use applications for their product – particularly if the founders are underrepresented or prior service members.

We also recognize that even within the VC ecosystem, we represent the rich legacy of Lockheed Martin. We hold ourselves to a high standard, as well as the portfolio companies we back.

Q: To what degree do Lockheed Martin’s current programs drive Lockheed Martin Ventures’ investment thesis? To what degree is that interest driven by projected DoD priorities?

Our current programs earned Lockheed Martin its reputation as a world-leading technology innovator. We also recognize the pacing threat posed by our adversaries. We’re making investments in 5G, AI/ML, edge computing and sensor technology to deliver advanced capabilities faster to the U.S. and our allies.

We have a deep understanding of our customers’ missions, and follow the demand signals outlined by DoD leadership. Through our investments, we aim to innovate with urgency and deliver integrated, mission-focused capabilities so our customers can continue to outpace complex threats as the landscape changes.

Q: Portfolio Integration Lead is an extremely important position at a place like Lockheed Martin. Can you share some strategies and processes that you and your team use to make sure portfolio companies can leverage Lockheed Martin’s resources and existing programs to the greatest potential?

Great question. Candidly, it is a hard job. Being the glue between start-ups charging forward and a large company solving complex problems requires innovative ideas to be successful. We have three tools and methods to do it – our annual Demo Day, an internal research and development fund and our business development resources.

Demo Day is an annual event where we invite 12-15 portfolio companies to a key Lockheed Martin facility to meet with 100+ Lockheed leaders, innovators, experts, and partners across engineering, program management, business development & strategy, supply chain, and government affairs. This year, we are planning to open up our Demo Day to select non-Lockheed Martin attendees from government, academia, and other key external stakeholders. Keep an eye out!

Second, We have an internal research and development fund to help portfolio companies work with experts across Lockheed Martin to create prototypes and conduct real demonstrations for further adoption.

We do a lot of internal business development. We are consistently exploring creative avenues to update our employee population on our goals as a venture fund while identifying opportunities for collaboration with companies in our portfolio.

Q: What are some common asks that Lockheed Martin Ventures will have for its portfolio companies? What are some common requests portfolio companies make of Lockheed Martin?

We ask for openness to explore the art of the possible and bring excitement to connecting with the many parts of Lockheed Martin. We do need regular financial reporting like any VC investor, but we are flexible and founder-friendly.

Common requests from portfolio companies include general support and expertise, especially around security and classified new business, customer opportunities, and thought leadership we can share around defense and dual-use needs.

Q: How has Lockheed implemented diversity, equity, and inclusion initiatives and the advantages those initiatives provide to both the fund and the broader organization?

Lockheed Martin has a robust Business Resource Group culture – 36,000 strong as of 2022. We actively support the Society of Women Engineers (SWE) and Historically Black Colleges and Universities (HBCUs).

No doubt, the defense ecosystem can and should do better with representation. It is well known how poorly the VC ecosystem does with diverse investors and supporting diverse founders.

Lockheed Martin Ventures has the benefit that our customers are diverse, and as a result we bring unique perspectives to the VC community. 40% of our core team identifies as female, and 50% are from underrepresented backgrounds. We have two PhDs, two pilots including yours truly, a prior banker, and folks based from D.C. to the Bay Area, New York City to Atlanta.

Our advantage is that we try new things. We have sent teammates to Black Tech Week and other non-traditional deep tech venues to find and connect with current and potential founders who may be left out of the traditional VC funded pipeline. We’ve partnered with Venture Forward and funds based in the Midwest for deal flow, and connected with academic institutions like Arizona State University – a large Hispanic Serving Institution.

Q: How have you seen diversity positively affect Lockheed Martin Ventures’ portfolio companies? Conversely, how have you seen the lack of diversity negatively impact Lockheed Martin Ventures’ portfolio companies?

Personally, I see the lack of diversity in the defense innovation ecosystem as a national security risk. The threats we currently face, and the many we will in the future require that we explore every corner of domestic innovation, in addition to allied international innovation. It simply does not make sense to exclude anyone from solving these hard problems, yet many VC’s rely on outdated pattern recognition that actively excludes women, Black, Latino and indigenous founders.

If the VC and innovation communities continue to overlook the value that underrepresented founders and talent can bring to national security, we are increasing our risk of not meeting those threats, let alone creating additional financial returns and economic value.

Just this year we ran a survey of our portfolio companies to provide insights into how diverse our portfolio is. I’m proud to note on behalf of Lockheed Martin Ventures, we see fewer of our portfolio companies wind down or become distressed, and our internal rate of return (IRR) and returns on invested capital are impressive when compared to other corporate and institutional VC funds. Since this is the first year of doing a comprehensive survey, this may be more correlation versus causation, but I am encouraged to see what future year data shows.

Q: What are a few things that the defense and dual-use sector can do to increase diversity across companies, founders, and investors?

Last February, Lockheed Martin Ventures co-hosted a meeting in Washington, D.C. near the Howard University Campus centered on improving Diversity in the Defense Innovation Ecosystem. We partnered with the Common Mission Project and the United Negro College Fund to host representatives from In-Q-Tel, AFWERX, NSA, Silicon Valley Bank, think tanks, policy influencers and researchers to discuss ways to improve diversity.

Key takeaways include: starting early, democratizing information and opportunities, and countering bias in the hiring and investment processes.

For starting early, many potential founders are derailed at the K-12 education levels due to many societal and structural barriers. Investing in young talent, particularly with mentorship, is key. It can be as simple as attending a career day, or providing support for STEM education at your local school. The key is to let students know that this is an opportunity and something that is possible for them to pursue, so they can start preparing at the same time traditional founders do.

Even when underrepresented founders find their way in or adjacent to the core VC-backed-founder pipeline, they are usually disadvantaged by a lack of information and access to opportunities afforded to those who are at the well-known universities and employers. Personally, I did not even know Venture Capital was a profession, let alone an investment asset class, until I started studying for the GMAT. Again, it is key to get out there, and visit college campuses (beyond the usual ones) and career fairs. If you find yourself without diverse candidates in your resume bank, it means you are not going to meet the diverse candidates where they are. Be intentional about it, and go outside of your comfort zone.

Finally, in countering bias in hiring and investing, there are countless studies that offer solutions. Generally, its beneficial to have diverse interviewers involved in the process. Also be mindful of your line of questioning, as studies show that VCs tend to ask leading questions. Male founders are asked about how they will succeed, whereas women founders are asked about how they will avoid failure.

If we can do these things, taking one step at a time, we will find a more just and equitable VC and dual use ecosystem, providing substantial benefits for our national security and our society.