America's greatest strategic advantage in military competition isn't its defense budget but its commercial capital markets, according to a new briefing published in June 2026 by the Hoover Institution's Technology Policy Accelerator. In Mobilize the Modern Defense Industrial Base, Gen. John Raymond (ret.), founding chief of space operations of the US Space Force, and Dr. Dan Berkenstock, founding CEO of Skybox Imaging, argue that military commanders who understand investor dynamics can unlock an industrial base no adversary can match.
The report reveals that the United States deploys private capital at nearly the scale of its entire defense budget each year, representing a massive latent resource for national security. While adversaries like China can compel their entire economies to serve military objectives through military-civil fusion, the United States must persuade its commercial sector—and the investors who control it—to align with defense priorities. The briefing identifies whether a company is publicly or privately held as the factor with the largest first-order impact on its behavior, because that single fact determines its risk tolerance, success metrics, and time horizon.
The report finds that investors are often the ultimate drivers of corporate strategy, with what companies do or don't do explained largely by investors' financial incentives: steady returns for public institutional investors, big bets for venture capital, and efficiency gains for private equity. According to the authors, early-stage venture-backed companies are uniquely positioned to pursue bold, mission-aligned capabilities, but more than immediate research dollars, they need contingent contracts from defense customers, because future revenue commitments are what unlock their next funding round. The briefing delivers three concrete lessons that any commander can apply immediately, focused on understanding company ownership structure, identifying the real decision influencers behind executives, and knowing where a company sits in its funding lifecycle.
The report confronts what it describes as a fundamental asymmetry: commanders must learn a language most military leaders have never been taught—the language of capital markets. The briefing explains that knowing where a company sits in its funding lifecycle is the master key to influencing its direction: early-stage companies need contingent contracts more than grants, while mature public companies need predictable revenue. The real decision influencers at most technology companies aren't the executives in the room but the venture capitalists, private equity firms, and institutional investors behind them, each with distinct financial incentives that shape corporate strategy. By understanding these dynamics, commanders can effectively direct private capital flows toward national security objectives without the coercive tools available to authoritarian competitors.
The briefing's central recommendation is clear: commanders who master the mechanics of capital markets hold the key to mobilizing an industrial base that dwarfs traditional defense contractors. With private investment matching the entire defense budget annually, the gap between current practice and potential is vast—and closes only when military leaders learn to speak the language of the investors who ultimately decide which technologies get built.