Backswing Ventures

Backswing Ventures Warns Defense Tech Valuations Are Outrunning Exits

Backswing Ventures Warns Defense Tech Valuations Are Outrunning Exits

Orlando, Fla. – September 17, 2026 -- Mach Industries doubled its valuation to $3.7 billion in three months, up from $470 million a year earlier, as defense startup funding heads for a record 2026 even while exits remain scarce, according to Backswing Ventures.

Crunchbase data shows 2026 funding at record levels with few exits in sight

Crunchbase News reported this month that 2026 is on pace to be the largest year on record for defense startup funding. Backswing Ventures founder Kyle Asman said that surge is not matched by liquidity, since government sales cycles and dual-use commercial traction can take years to materialize into a sale or IPO.

"Raising money has never been faster in this sector," Asman said. "Turning that money into an exit is a separate problem, and a much slower one."

Defense VC Backswing Ventures Rejects Unicorn-Dependent Fund Model

Defense VC Backswing Ventures Rejects Unicorn-Dependent Fund Model

Orlando, Fla. – September 11, 2026 -- Backswing Ventures, an early-stage defense venture capital firm, is underwriting every investment in its portfolio for an independent 3-5x return rather than betting the fund on a single breakout winner.

Carta data shows unicorn payouts are stalling, not disappearing

Among 2017 and 2018 vintage venture funds old enough to have realized outcomes, fewer than 20% have returned even 1x DPI to limited partners, according to Carta's Q1 2026 fund-performance data. Backswing argues paper valuations do not pay LPs back; distributions do.

SpaceX illustrates the timeline problem at scale. Founded in 2002, the company did not deliver a liquid outcome to shareholders until its initial public offering closed in June 2026 -- 24 years later.