Sep 8, 2026 · 1 hr · 13 segments
There are 40% fewer small businesses in America's defense industrial base than there were 20 years ago. The machining, welding, and fabrication that turn a program into an actual weapon happen three…
Patrick MalcorGuestLogan JonesHostWesley SparksGuestWell, we're really excited to dig into your all's role that you're playing in the defense industrial base and all the different dynamics that are going on in the space right now.
I wanted to start off by kind of one of those main thesis that you have around the defense industrial base, and that is the defense industry has a capital problem, not necessarily an innovation problem.
So why? Why was that the answer to that? And kind of let's dig into the problem around capital
I think it's pretty clear it's been the unfortunate trend for the last 20 years or so.
There are 40% fewer small businesses in the defense industrial base than there were 20 years ago.
It's administratively burdensome at times, and there are some unique characteristics that make it Hard, but it's still important to do.
And so the trend of small businesses, whether that was due to globalization and offshoring or just the high barriers to entry to being in that industry, for whatever reasons, you could see the atrophy in the defense industrial base happening in real time.
And if you were close to the defense industry, you realize, as we do, that a lot of the heavy lifting and investment happens in the tier two, tier three supply chain of the defense industrial base.
Of course, the primes, the large contractors at the top of the industry do a lot, and they're critical to making the industry work.
But a lot of the really heavy lifting in terms of machining metal and metal fabrication and stamping and welding and all those kind of things that require investment in machine and people happens in the Tier 2, Tier 3 part of the industrial base.
And I felt like that was an important thing to invest in, an important mission as it became a priority to increase production and put more focus on building up the defense industrial base from the Pentagon on down.
that seemed like a good mission to be a part of, and one that required, I think, a different approach to entrepreneurial capital.
It wasn't something that you could do with kind of VC, although, of course, there's plenty of VC-backed startups in the defense industry now, but I think the type of investment that our area of the supply chain, the industrial supply chain, needs is long-term patient capital and So I made it our mission at Ajax Defense to bring that type of long-term perspective and investment capital and know-how into the defense industry to rebuild the defense industrial base.
Well, we're really excited to dig into your all's role that you're playing in the defense industrial base and all the different dynamics that are going on in the space right now.
I wanted to start off by kind of one of those main thesis that you have around the defense industrial base, and that is the defense industry has a capital problem, not necessarily an innovation problem.
So why? Why was that the answer to that? And kind of let's dig into the problem around capital
I think it's pretty clear it's been the unfortunate trend for the last 20 years or so.
There are 40% fewer small businesses in the defense industrial base than there were 20 years ago.
It's administratively burdensome at times, and there are some unique characteristics that make it Hard, but it's still important to do.
And so the trend of small businesses, whether that was due to globalization and offshoring or just the high barriers to entry to being in that industry, for whatever reasons, you could see the atrophy in the defense industrial base happening in real time.
And if you were close to the defense industry, you realize, as we do, that a lot of the heavy lifting and investment happens in the tier two, tier three supply chain of the defense industrial base.
Of course, the primes, the large contractors at the top of the industry do a lot, and they're critical to making the industry work.
But a lot of the really heavy lifting in terms of machining metal and metal fabrication and stamping and welding and all those kind of things that require investment in machine and people happens in the Tier 2, Tier 3 part of the industrial base.
And I felt like that was an important thing to invest in, an important mission as it became a priority to increase production and put more focus on building up the defense industrial base from the Pentagon on down.
that seemed like a good mission to be a part of, and one that required, I think, a different approach to entrepreneurial capital.
It wasn't something that you could do with kind of VC, although, of course, there's plenty of VC-backed startups in the defense industry now, but I think the type of investment that our area of the supply chain, the industrial supply chain, needs is long-term patient capital and So I made it our mission at Ajax Defense to bring that type of long-term perspective and investment capital and know-how into the defense industry to rebuild the defense industrial base.
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