Bradley Harrison: What people don’t realize is that the largest investor in innovation since World War II is not Silicon Valley; it’s the United States government. There are billions of dollars in each of these programs. The Army’s program for grants last year was $3.3 billion. That’s just the Army.
The government is passing the Endless Frontier Act which is about $110 billion to support innovation all through grants. We take our money, non-dilutive capital, and a bunch of smart people and build companies that we say are making the world a better and safer place.
Sramana Mitra: Where are you operating out of?
Bradley Harrison: We have a presence in New York, Washington DC, and Austin Texas.
Sramana Mitra: You are based where?
Bradley Harrison: I am based in Austin, Texas after 20 years in New York City. Austin became our new headquarters at the request of several people who we were speaking with in the Department of Defense. The former Secretary of the Army, and the Chief of Staff of the Army had asked us if we would be more involved in what the Army was doing, which is moving the center of innovation from Washington DC to Austin, Texas.
They established a new innovation command called Army Futures Command. That command has six other sub-commands. The Future of Mobility has a presence in Detroit. The Future of Communications has a presence in Aberdeen. We’ve centralized everything. The other thing that’s happened is that all the major corporations that participate in this have brought part of their innovation teams here to co-locate. We have representatives from all these units centralized in Austin.
Sramana Mitra: What sized funds are you operating with?
Bradley Harrison: Our last bucket of money was a little over $50 million. Our next fund will be somewhere north of $100M.
Sramana Mitra: What check sizes do you write?
Bradley Harrison: Our core fund is a seed fund. Our seed checks tend to be $500,000 to a million dollars for the first check. Then we’ll reserve $1 million to $3 million in follow-on. Our largest positions in fund three are roughly $2.75 million. We also have an incubation program. It’s led by my partner Sam Ellis. We’ll partner with an entrepreneur early on and we’ll provide the initial $250,000 as we build out the team. If it’s a business person, we might go find the CTO. If it’s the CTO, we find the business person.
As I mentioned, I view myself more as an entrepreneur than a VC. It just happens that my entrepreneurship was around building a VC. Along the way, we incubated a couple of companies. One of them relocated to Austin, which does insurance products for the collaborative economy. That was founded and incubated out of Scout. We funded the initial and recruited the management team. Then the management team raised the Series A.
Our most successful company was called Unite Us which was founded by Dan Brillman and Taylor Justice. They just completed a round led by Iconic at a $1.65B valuation.