Defense tech investor warns of 'tourist' VCs chasing SpaceX alumni

In an interview with Crunchbase News, Van Espahbodi, a general partner at Generational Partners, discussed the wave of software-focused venture capitalists now pursuing deals in defense and industrial technology, often drawn by the profile of founders with SpaceX backgrounds. He argued that many of these investors are treating the sector as a trend rather than understanding its distinct economics.

Espahbodi said AI is changing how hardware businesses scale, lowering some development costs and shifting how investors evaluate defense and industrial startups. But he cautioned that newcomers chasing fear of missing out, without deep sector knowledge, risk misreading timelines, government contracting realities, and capital needs unique to hardware compared to software.