Erik Berdy G2M Expert from Army, Pentagon Offers Advice to Israeli Startups

Introduction

Eric Berdy, a retired U.S. Army Colonel and Chair of the National Security Practice at Michael Best, brings decades of experience at the intersection of military operations, legislative affairs, and national security strategy. In a recent CET Sandbox conversation, he shared candid insights on how startups–particularly those from allied nations like Israel–can engage with the U.S. defense ecosystem and avoid common pitfalls.

Overview

From advising the Chairman of the Joint Chiefs to lobbying Capitol Hill, Berdy has seen the full lifecycle of how defense priorities are shaped–and how companies can align with them. He offered a strategic roadmap for emerging tech firms looking to enter the U.S. market, highlighting the geopolitical drivers of defense spending, the importance of dual-use tech, and the realities of government contracting in Washington, D.C.

What’s Driving Defense Spending and Technology Priorities Today?

The primary force shaping U.S. defense policy today is competition with China. While threats from Russia, Iran, North Korea, and violent extremist groups remain relevant, long-term planning is focused on deterring or, if necessary, defeating China in a potential high-end conflict. This has shifted budgets and priorities toward technologies that improve speed, precision, and decision-making across all domains.

Programs like DIU, the Office of Strategic Capital, and APFIT remain well-funded despite earlier fears they might be cut. The FY26 budget includes additional funding through reconciliation, suggesting strong bipartisan support for innovation and modernization. However, inflation-adjusted growth remains slim, and much of the defense budget is still consumed by personnel and legacy systems.

How Should Startups Engage with the Defense Ecosystem?

Startups must understand the complex and bureaucratic landscape of U.S. defense contracting before trying to break in. That means knowing what requirements exist, where funding flows, and who the key stakeholders are–both in the Pentagon and on the Hill.

A key takeaway: Don’t waste resources engaging consultants until you have a strategic plan. Startups should focus first on product development, achieving early traction, and leveraging existing DoD pathways like SBIR/STTR, DIU solicitations, or Other Transaction Authorities (OTAs). Lobbyists and advisors can be useful later, but only if there’s clarity on goals and ROI.

What’s the Role of Congress and How Can Startups Navigate It?

The defense ecosystem in the U.S. is deeply shaped by congressional committees, particularly the House and Senate Armed Services Committees and the Appropriations subcommittees. Professional staff members on these committees often specialize in specific portfolios (e.g., drones, semiconductors) and maintain close relationships with DoD counterparts and industry stakeholders.

Startups may consider joining associations like NDIA or regional councils to gain access, but Berdy cautions that unless these groups represent your specific priorities, they may offer limited value. Direct engagement–or partnering with firms that can help build those relationships–can often be more effective.

What Makes Technology Attractive to the DoD?

The DoD is increasingly focused on foundational technologies: AI, autonomy, cybersecurity, advanced communications, and software-defined systems. But it’s not enough to have a novel technology–the DoD wants solutions that are usable, affordable, and already integrated into operational needs.

Berdy cited new legislation (like the SPEED Act) that aims to accelerate acquisition timelines, particularly for emerging software-based solutions. However, he stressed that the department won’t build software internally–it must come from commercial innovators. The key is proving performance and demonstrating how a product integrates into existing or planned systems.

Should Startups Focus on Dual-Use or Defense-Only?

There’s no one-size-fits-all answer, but Berdy offered a reality check: having a commercial market is often essential to survive the long federal sales cycle. Defense-only companies may struggle to get funding from investors, while government buyers increasingly look for validated use cases before committing funds.

That said, the defense ecosystem can be skeptical of startups that appear unfocused or lack a core mission. The challenge is balancing commercial traction with a clear national security application.

Key Takeaways

• China remains the top driver of U.S. defense priorities, influencing budgets, policies, and technology needs across the board.
• DIU and similar offices are still funding foreign-affiliated startups, but competition is steep and priorities are tightly defined.
• Successful startups align their tech to known DoD requirements and pursue commercialization to reduce government risk.
• The U.S. defense ecosystem is not impenetrable, but it is bureaucratic, requiring strategic planning and patient execution.
• Startups should avoid scattershot lobbying efforts and instead pursue targeted, ROI-driven government relations based on clear goals.

Conclusion

Engaging with the U.S. defense market requires more than a good product. It demands strategic insight, market understanding, and long-term commitment. Eric Berdy’s advice is clear: know the environment, build the right relationships, and ensure your technology solves a real problem for the U.S. government. For Israeli startups navigating this space, that’s not just good guidance–it’s mission-critical.