First In closes $148M fund to back early-stage security tech startups
What's the deal? First In, an early-stage venture capital firm focused on security technology, has closed its third fund with $148 million in investable capital.
The fund is oversubscribed and structured as a Small Business Investment Company Critical Technologies (SBIC-CT) vehicle — a federal designation that lets the firm deploy private capital alongside US Small Business AdministrationDealroom has a profile for this one. Try Dealroom → (SBA)-backed leverage. It will focus on seed-stage companies in cybersecurity, defence technology, AI, autonomy, and advanced manufacturing.
Founded in 2020 and based in Hobe Sound, Florida, First In is led by managing partner Renny McPhersonDealroom has a profile for this one. Try Dealroom → and general partner Arthur KarellDealroom has a profile for this one. Try Dealroom →. Past bets include AndurilDealroom has a profile for this one. Try Dealroom →, now one of the most prominent defence technology companies in the US, as well as Castelion and Adlumin, a cybersecurity firm acquired by N-able.
Why now? The SBIC-CT licence, approved by the SBA in coordination with the Office of Strategic Capital (OSC), is central to the fund's structure and took time to secure. The programme is part of a broader federal push to channel private capital into sectors deemed critical to US national security — a mandate that has gained urgency as defence budgets and commercial security spending both surge.
The timing also reflects a maturing defence tech ecosystem. A wave of startups building military and security applications has created a larger pool of investable companies at the seed stage than existed even three or four years ago.
What could go wrong? SBIC-CT funds come with regulatory strings attached — the SBA's involvement means additional oversight and constraints on how capital can be deployed. For an early-stage firm backing inherently risky, pre-revenue startups in a specialised niche, the margin for error is thin.
Defence technology also has long sales cycles and heavy dependence on government procurement decisions that can shift with administrations or budget cycles, making it harder to predict when — or whether — portfolio companies will reach scale.
The signal: First In's fund is small by venture standards, but it represents something bigger: the institutionalisation of defence tech as an asset class. What was once a niche corner of venture — dismissed by mainstream Silicon Valley for years — now has dedicated seed funds, federal co-investment structures, and a growing roster of exits.
The SBIC-CT programme itself is a bet by Washington that the best way to build the next generation of national security technology is to get private capital doing the heavy lifting early.
Sources:
Business Wire
First In
Renny McPherson's LinkedIn post
Arthur Karell's LinkedIn post
Image credit:
First In
