According to a new report from the Center for a New American Security (CNAS), “Veteran Tech Entrepreneurial Ecosystems,” American veterans continue to play a significant role in the entrepreneurial landscape, even as entrepreneurship as a whole declines in the United States.

Since 2012 the military has provided an introduction to entrepreneurship as part of its training program for service members leaving the military. The CNAS report highlights how veteran-founded startups, especially in the technology sector, advance the veteran community but also the broader U.S. economy.

“Veterans are very eager to learn and capable of adapting,” said Jason Dempsey, adjunct senior fellow of the military, veterans, and society program at the Center for a New American Security, and author of the report.

“They typically bring a discipline to learning new skills that some don’t have,” Dempsey told ClearanceJobs.

Best Cities for Veteran Startups

CNAS reported that the two standout ecosystems for veterans are currently Washington, D.C. and Austin, TX. The report noted that while the nation’s capital isn’t normally seen as an entrepreneurial hub, the Washington-to-Baltimore corridor remains a top location of choice for many veterans seeking to launch a new business.

Eastern Maryland and Northern Virginia have long been dominated by government contracting companies, and as a result have developed one of the strongest ecosystems in the country for the cybersecurity subsector. It offers a pathway to entrepreneurship that is uniquely suited to veterans with experience and expertise in the field.

Virginia’s Center for Innovative Technology (CIT) has landed a grant from the U.S. Small Business Administration (SBA). CIT has been making investments in local startups through its early-stage investment fund and its Virginia Founders Fund, which focuses on supporting companies with female, minority or veteran founders.

“D.C. is far and away the main hub for veteran entrepreneurs, and is already shaping up to be a key node for the growth of the cybersecurity industry,” added Dempsey.

Austin is another well-established destination for entrepreneurs, and while it lags behind the coastal hubs in the size of its tech-specific ecosystem, it has a high concentration of veterans and veteran-supported networks. It is also home to the newly established Army Futures Command, and this could strengthen the city as a destination for veteran start-ups.

The authors noted that Austin may be seen as the city with the best ecosystem for veterans. There are multiple organizations in the Lone Star State that are assisting veterans, and this includes the Texas Veterans Commission’s Veteran Entrepreneur Program, which was created in 2013 to foster and promote veteran-owned startups throughout Texas; the Texas Military Officers Association, an Austin-based enterprise that connects central Texas’ military officers with the Austin business community; and BiGAustin, a central Texas solution for entrepreneurial education, tailored business counseling and flexible loans.

Lesson Plan for veteran entrepreneurs

The authors laid out several key lessons for veterans seeking to build technology startups, including ways to build more supportive ecosystems.

The report suggested that the evolution of the technology sector requires that company founders have a deeper knowledge and extensive experience in existing companies. For that reason, potential veteran entrepreneurs may need to seek out opportunities that allow them to gain the necessary skills before launching their own startup. Veterans should still draw upon the valuable skills that they gained during their period of service, but look to supplement that military experience with civilian experience.

Many veterans may find difficulty making the leap from the early stage of “angel” funding to venture capital. Overcoming this gap could take time as veteran networks further expand into the venture capital and private equity space.

Veterans and other founders should also have an understanding of where best to build a new company, and this includes looking for support from the veteran community as well as state and local agencies. The best locations for veterans therefore may not be traditional startup hubs – such as San Francisco and the Bay Area – but could be those areas that offer unique synergies between the federal government, local business and technological innovation. That could of course include aforementioned D.C. and Austin metro areas.

Veterans must be strategic about choosing the right ecosystem for a new startup, as location is important for those launching a technology company. A supportive ecosystem, said the CNAS authors, will help veterans fill the gaps in their networks, technical skills, and knowledge of the industry they are working in.

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Peter Suciu is a freelance writer who covers business technology and cyber security. He currently lives in Michigan and can be reached at petersuciu@gmail.com.