Asia imported 2.45 million barrels per day, led by Japan
Europe imported 2.4 million barrels per day, with Italy setting a record
HOUSTON, June 1 (Reuters) – U.S. crude exports climbed to a record 5.6 million barrels per day in May as the Middle East crisis pushed up demand for the country’s oil from Asian and European refiners, ship tracking estimates showed on Monday.
The U.S. and Israel’s war with Iran triggered the largest-ever disruption to the global energy market with refiners globally scrambling for alternatives to Middle Eastern supply. Around a fifth of the world’s oil and gas supplies passes through the Strait of Hormuz. a key waterway that effectively closed when the war started at the end of February.
U.S. crude exports last month surged past the previous record set in April of 5.2 million bpd, according to data and analytics firm Kpler, as benchmark U.S. West Texas Intermediate prices traded at a steep discount to Brent, the global benchmark. Physical U.S. crude grades are typically priced as a differential to WTI, and a large discount to Brent makes it more economic for foreign buyers to purchase U.S. oil and ship it across the world.
WTI traded at a discount of as much as $20.69 a barrel to Brent futures in March, its widest in 13 years as supply disruptions in the Middle East led increases in Brent to outpace those in WTI. In April, when a bulk of the deals to export crude in May were executed, the spread averaged a discount of around minus $8.86, compared with an average of minus $4.85 before the war.
Exports to Europe and Asia touched record highs in May, with Asia taking 2.45 million bpd of the barrels exported, retaining its spot as the top buyer for a second month in a row. Europe was a close second at 2.4 million bpd.
Demand from Japan, which typically imports the bulk of its crude from the Middle East, accounted for the lion’s share of Asian imports of U.S. grades in May, at 808,000 bpd, a 32% jump on the month and setting a record.
“It’s not a surprise to see Asia pulling so much given the loss of barrels from the Mideast Gulf,” said Kpler’s Director of Commodity Research Matt Smith.
U.S. crude bound for the Mediterranean and Black Sea also hit a record high in May, with Bulgaria, Croatia, Turkey and Greece emerging as rare transatlantic buyers.
Italy’s record imports of 335,000 meanwhile drove the uptick in European demand.
“We believe the Asian buying was mainly driven by necessity while European buying was mainly favorable shipping economics and lower transatlantic freight rates,” said Rohit Rathod, a senior oil market analyst at Vortexa.
At least 283,000 bpd, or about 5% of U.S. crude exports in May, were oil barrels from the U.S. strategic petroleum reserve. The oil, part of the 172 million barrels currently being released from the country’s emergency oil stash to combat spiking crude prices, headed to both European and Asian buyers.
EXPORTS SET TO WEAKEN
After a bumper May, exports are set to ease in June as hopes of a peace deal have eased some supply concerns and narrowed WTI’s discount to Brent. While WTI’s discount to Brent remained wide in the early part of May, it weakened in the second half and was trading around minus $6 on Monday.
Consultancy Energy Aspects estimates exports to average about 4.9 million bpd for June, and about 4.60 million bpd for July.
“We would expect exports to fall by over 1 million bpd in June compared to May,” said Georgios Sakellariou, chartering analyst at Signal Maritime, adding that the company has seen at least 10 fewer Very Large Crude Carriers for June dates compared with May.
Low inventories of WTI crude in the United States will also incentivize more barrels to flow into storage domestically, sources and analysts said, cutting into exports.
Prices for top U.S. export grades – WTI Midland crude at East Houston and Mars sour crude – both weakened into July trade as demand slipped. MEH traded at a premium of $1.15 to WTI on Friday, compared with a premium as high as $7.75 in April for May delivery. Mars traded at a premium of $1.50 on Friday, compared with a high of $17.50 in April.
(Reporting by Arathy Somasekhar and Georgina McCartney in Houston; Editing by Andrea Ricci )
Arlington County-based Fortune 500 aerospace and defense contractor Boeing received nearly $730 million in defense contract awards last week, including a contract supporting military aircraft and a long-term research agreement focused on future aerospace technologies.
The larger award was a $528.3 million contract modification from the Defense Logistics Agency for performance-based support services. According to the Department of Defense, the work is scheduled to continue through Sept. 16, 2027, and supports military customers across the Air Force, Army, Navy and Marine Corps.
While the DOD did not provide much detail on the work, a January 2026 presolicitation notice on SAM.gov indicates that the work is tied to support for the F/A-18 EXPO program. The F/A-18 is a family of military aircraft operated by the U.S. Navy and Marine Corps. According to the notice, the program provides logistics management, supply support, engineering services and spare parts support for those aircraft.
Boeing did not immediately return a request for comment.
Also last week, Boeing was awarded a $200 million indefinite delivery, indefinite quantity contract from the Air Force Research Laboratory for research and development involving aerodynamics, structures and other aerospace technologies.
The research will help the Air Force develop, demonstrate and integrate new aerospace vehicle technologies. The DOD said work will be performed at Saint Louis unless otherwise indicated in each task order and is expected to be completed by May 28, 2037.
Although the contract carries a ceiling value of $200 million, the Air Force said only $14,305 in fiscal 2026 research, development, test and evaluation funding was obligated at the time of award.
Boeing reported $89.5 billion in revenue in 2025 and has more than 170,000 employees. It ended 2025 with a major restructuring that included cutting approximately 17,000 jobs.
Virginia’s housing market continued to grow in April, with sales and new listings outpacing last year amid strong buyer demand, rising inventory and steady price growth, according to Virginia Realtors.
The trade association reported in late May that 9,758 homes were sold in April, a 4.5% increase from last year’s 9,334 and up 16.3% from March’s 8,388 sales. Pending sales have also strengthened, with 10,579 pending sales in April, a 6.2% increase from last year and up 4.2% from March.
The statewide median sales price was $439,945 in April, about $15,000 higher than April 2025, a 3.5% increase. The association reported that 59% of Virginia’s local markets recorded price growth compared to the same month last year.
April was one of the strongest months of inventory growth since before the pandemic-era supply shortages, according to Virginia Realtors. There were 17,111 new listings last month, a 10% year-over-year increase, and 23,867 active listings statewide, about 1,800 more listings than a year ago.
“April’s numbers reinforce just how resilient Virginia’s spring market has been,” Virginia Realtors Chief Economist Ryan Price said in a statement. “More sellers and more buyers are stepping into the market this year, even as mortgage rates have climbed since late February.”
He said the increase in sales and new listings compared to April 2025 is a sign that demand remains strong in Virginia. Statewide, homes spent a median of 10 days on the market, down from March’s 16-day median, but the same as April last year.
“Realtors are seeing firsthand how these improving conditions are shaping real opportunities for buyers and sellers,” Virginia Realtors 2026 President Curt Reichstetter, co-owner and broker of Two Dog Realty, said in a statement. “With more inventory coming online and steady interest from consumers, our members are helping clients navigate a market that offers more options and clearer paths forward than we’ve seen in recent years.”
Based in Glen Allen, Virginia Realtors represents about 34,000 Realtors and is the state’s largest trade association.
Welcome to the fourth edition of StartVirginia, our annual special issue focused on the state’s entrepreneurial ecosystem. It bears the name of the StartVirginia page in our monthly magazine, where, as you might expect, you’ll find additional coverage of the world of startups and small businesses in Virginia.
Our featured story from freelance writer Courtney Mabeus-Brown explores the rapid growth of government contracting startups clustered near D.C. Fueled by the 2015 launch of the Defense Department’s Defense Innovation Unit, sometimes called the “Pentagon’s innovation experiment,” the burgeoning defense tech and AI startups sector is seeing increased interest from both the government and VC investors.
The Elevator Pitch, a hallmark of the StartVirginia issue, features 12 innovative startups in varying industries, from packaged food to EV charging to in-space assembly robotics. Selected from a host of applicants, these founders tell our readers what makes their ventures a good bet.
And if you’re looking for more advice, check out this issue’s commentary from an undeniably successful founder, Bill Crutchfield, CEO of Charlottesville-based electronics retailer Crutchfield Corp.
Whether you’re a newcomer to this domain, a unicorn CEO, venture capitalist or casual observer, this issue has something for you. Dive in!
Founder: Holt Walker Founded: 2025 Capital raised: $0 Employees: 1 Service provided: Clean-ingredient, high-protein cereal
What makes your company different?
Tribute was built around a stricter ingredient standard than both conventional cereals and most high-protein cereals. We use organic, grass-fed whey as our protein source, which provides a complete protein with all amino acids. We also avoid the common shortcuts in the category, including seed oils, so-called natural flavors, gums and emulsifiers.
That combination is what sets Tribute apart. In cereal, consumers are often forced to choose between better macros and better ingredients. Conventional cereals typically fall short on protein and ingredient quality, while most protein cereals improve macros but still rely on heavily processed formulations and additive-driven ingredient decks.
Tribute is designed to close that gap by delivering meaningful protein and a cleaner ingredient standard in the same product.
The pitch: Tribute is a clean-ingredient, high-protein cereal built as a daily staple. We use real ingredients and deliver 12 grams of protein. Sugar is kept intentionally low.
The opportunity is to rebuild a legacy category that has drifted toward ultra-processed formulations. Consumers are increasingly looking for everyday foods they can trust, but options that combine strong nutrition with a clean ingredient standard are still limited.
Tribute is designed to fill that gap with a product people can eat regularly, whether it’s breakfast, a snack or an evening bowl, without second-guessing what’s in it.
We are launching direct-to-consumer, using rapid iteration and real-world feedback to refine the product before expanding into retail.
Photo by Shandell Taylor
AVANT GENOMICS
CHARLOTTESVILLE
Co-founders:Rachelle Turiello (CEO, pictured) and Renna Nouwairi (COO) Founded:2023 Capital raised: $3.5 million Employees:7 Service provided: Automated sample preparation platform for liquid biopsy
What makes your company different?
Avant Genomics is advancing a first-of-its-kind fully automated sample preparation platform for liquid biopsy. The Avant Source system enables consistent, reliable and efficient collection of tumor-derived cell-free DNA (cfDNA) from a simple blood draw, solving an urgent gap in the detection process. Today, costly and time-consuming manual workflows deliver insufficient cfDNA recovery and variable results, undermining test performance and limiting the utility of liquid biopsy.
The Avant Source platform is distinctly positioned for rapid launch and adoption in a large and growing laboratory market, and Avant Genomics has a seed round near completion and plans to initiate a Series A round in 2026. Avant is prepared to shift the diagnostic paradigm for cancer detection and monitoring through next-gen automated sample prep.
The pitch:Liquid biopsy will transform cancer care through noninvasive, blood-based diagnostic and treatment monitoring, if we can address the No. 1 bottleneck today: sample preparation. Tedious manual workflows result in inconsistent, unreliable yield of circulating tumor DNA from blood samples.
The solution lies in automation. The Avant Source platform delivers consistently high DNA-yield samples to enable accurate, reliable diagnostic testing. It consolidates dozens of manual steps to just two — load the sample, remove the cartridge — improving yield by nearly 30%, cutting time to result in half and reducing costs by 80%.
Today, there is no fully automated solution across the $1.75 billion U.S. obtainable market. Avant has built momentum on a well-defined path to launch in 2027, with strong infusions of capital, manufacturing underway and market leaders signed up for our early access program. The potential for liquid biopsy to redefine cancer care is at our fingertips — precision starts with preparation.
Photo by Jay Paul
TIDAL FLIGHT
CHESAPEAKE
Co-founders (from left):Pranav Krishnamurthy (chief technology officer), Mark Lau (chief engineer) and Jude Augustine (CEO) Founded:2023 Capital raised:$5.55 million Employees:6 Service provided:Hybrid-electric seaplane
What makes your company different?
As compared to other companies in advanced air mobility, our approach of building a fixed-wing seaplane with an existing certification basis under the Federal Aviation Administration’s Part 23 regulations significantly reduces certification risk and cost. Furthermore, since seaplanes are in commercial use today and require very little infrastructure, there is already a robust regulatory framework for seaplane operations and minimal barriers to rapid scaling of seaplane operations.
Polaris is the first hybrid-electric seaplane, reducing operating costs by 50%, reducing fuel burn by 85%, reducing takeoff noise by about 20 decibels and nearly eliminating corrosion-related maintenance. As a hybrid-electric aircraft, Polaris does not depend on charge infrastructure, a critical differentiator over other startups building modern seaplanes that have focused on fully electric or hydrogen-electric solutions.
The pitch: We are building the next enduring aircraft manufacturer around modern propulsion. Our first aircraft is Polaris, a nine- to 12-passenger hybrid-electric amphibious aircraft designed for coastal regional mobility and defense missions. Polaris provides direct access to city centers, vacation destinations and remote communities by landing on the waterways they are built around.
There are 13 billion trips of 100 to 500 miles annually in the U.S. alone, and seaplane access would save 2-plus hours in door-to-door time for those travelers. For the defense sector, Polaris brings low-signature runway independence with a small logistics footprint, critical for potential conflict in the Pacific.
So far, we have flown three one-sixth-scale prototypes, secured more than 150 aircraft and $980 million-plus in orders from 12 airlines, and won a $1.25 million U.S. Air Force contract. We raised $4 million in summer 2025 and are now building full-scale systems, including the full-scale hybrid powertrain and fly-by-wire systems.
Photo by Will Schermerhorn
QME
CHANTILLY
Co-founders (from left):Aditya Sengar and Akshita Tiwari Founded:2022 Capital raised: $0 Employees: 2 Service provided: Quantum computing education
What makes your company different?
Most quantum education content is built for advanced learners or assumes strong coding backgrounds. qMe is designed for first exposure, especially for students who might otherwise self-select out of the field.
Our approach is rooted in behavioral insight: Students don’t disengage because they lack ability, but because they perceive topics as inaccessible. We counter this by anchoring quantum concepts in students’ existing interests, combining storytelling, research and applied learning. As high school founders (now in college), we’ve personally faced this tension, which is why we can connect with students on a closer level.
Additionally, qMe doesn’t stop at education. Students publish blogs, build up their portfolios and begin engaging with real-world innovation early, creating both skill development and identity shifts in who sees themselves in tech.
A portion of profits supports girls’ STEM education in Hyderabad, India. Tiwari started qMe to contribute to a cause she not only relates to but also has witnessed because of her heritage in India.
The pitch:qMe is rethinking how the next generation approaches technology, specifically with quantum computing. While most quantum education is designed by Ph.D.s for advanced learners, qMe is built by students, for students, making complex ideas accessible from the very first exposure.
We’ve taught 300-plus students globally, from elementary school learners to university engineering students, guiding them to complete blog articles and research projects. Our approach builds on student passions, with even a first grader connecting quantum computing to planets. Through partnerships across Charlottesville, Northern Virginia and India, we make abstract concepts engaging and actionable.
qMe isn’t just teaching quantum computing. We’re redefining who gets to learn it.
Photo by Jay Paul
HERCULE-Q
HAMPTON
Founder and CEO: Hannah LaCon Founded:2022 Capital raised: $100,000 Employees: 6 Service provided: Charging infrastructure
What makes your company different?
HerculE-Q differentiates itself by focusing on developing governance-enabled wireless charging infrastructure rather than standalone charging hardware. While many companies in the field are focused solely on improving charging technology, HerculE-Q is building systems that integrate infrastructure, energy coordination and operational oversight into a unified platform.
Additionally, HerculE-Q is focused on enabling flexible and scalable deployment models, particularly in environments where traditional charging infrastructure is difficult to install, such as campuses, urban mobility corridors and shared transportation systems.
By combining wireless charging with infrastructure governance, HerculE-Q is working to support a more integrated and accessible electrified mobility ecosystem.
The pitch:HerculE-Q, with joint venture partner Helixis Technology, is building PWR-ARC, a governance-enabled wireless charging infrastructure designed for the next generation of electrified mobility. As EVs and micromobility scale, the real challenge is no longer just charging — it’s how to deploy and manage charging infrastructure efficiently across cities, campuses and utility systems. PWR-ARC addresses this by combining wireless power transfer with a governance layer that enables operators to monitor, coordinate and scale distributed charging networks.
Our approach reduces infrastructure complexity, lowers installation barriers and supports grid-aligned deployment — making it easier to expand access to charging in high-density and underserved areas. With early traction through university partnerships, engineering development with the New York Institute of Technology and support from NASA and state innovation programs, HerculE-Q is positioned at the intersection of energy, mobility and infrastructure. We are building not just a product, but a platform for scalable electrification.
Photo by Jay Paul
MECHASTRUCTURE
HAMPTON
Founder and CEO:Iok Wong Founded:2025 Capital raised:$50,000 Employees: 1 Service provided: In-space assembly robotic structure
What makes your company different?
Unlike conventional spacecraft, which must be folded tightly to fit within the constraints of a rocket fairing, MechaStructure provides structural systems that enable the construction of mega-scale assets directly in orbit or on the moon. The in-space assembly (ISA) approach facilitates the creation of complex, highly customizable spacecraft architectures that would be difficult, if not impossible, to deploy through conventional methods.
MechaStructure provides an economical, reliable and scalable standardized backbone for next-generation space systems. A core objective is to minimize the barrier to entry for non-aerospace sectors, enabling customers to leverage the unique space environment. By providing managed in-space real estate and utility hosting frameworks, MechaStructure allows commercial and scientific customers to deploy specialized payloads and capabilities without the need to develop an entire spacecraft.
The pitch: The space economy and scientific advancement are accelerating at an unprecedented scale. As reusable rockets lower launch costs, non-aerospace industries are exploring the unique advantages of the space environment. Simultaneously, agencies like NASA are revisiting mega-scale concepts previously limited by rocket fairing volumes. While accessing space was the first hurdle, building and expanding infrastructure is the critical next step for a flourishing orbital economy.
MechaStructure is developing a robotic ISA framework to facilitate the construction of mega-scale spacecraft and orbital assets. The ISA approach achieves superior packing density, enabling massive structures to launch via smaller vehicles while providing flexible mission logistics. Such modularity allows spacecraft and infrastructure to be completed, expanded or upgraded across multiple launch manifests, similar to the International Space Station (ISS). Unlike the ISS, which is human-tended, MechaStructure platforms are operated and managed by the same robots that performed the initial assembly of the platform.
Photo by Shandell Taylor
EUNOIA BRA
HENRICO COUNTY
Founder and CEO:Ciara Brown-Smith Founded:2024 Capital raised: $5,000 Employees: 1 Service provided: Postpartum support products for women who need to suppress lactation
What makes your company different?
Eunoia Bra was born from a gap that has gone largely unaddressed for decades. When women experience lactation after loss or choose not to breastfeed, they are still being told to use sports bras or plastic wrap — the same advice given 20 years ago. Eunoia Bra is one of the very few products designed specifically for this moment. It combines gentle compression, full coverage and cooling relief in one thoughtful system. More than a product, it’s a brand that centers the emotional experience of postpartum transition — meeting women in grief, in choice and in healing with dignity.
The pitch: When Ciara lost her son, RJ, in 2022, her milk came in days later. She was told to layer multiple sports bras and wrap her chest in plastic wrap just to manage the pain. She then learned this was still the standard advice — the same guidance she’d received 16 years earlier as a teenage mother. So, she built something better.
Eunoia Bra is a postpartum support brand offering a full-coverage compression bra and cooling packs designed for women suppressing lactation — after loss, after choosing not to breastfeed or during weaning. It’s a space that has long been overlooked by the maternity industry.
Derived from ancient Greek, “eunoia” (yoo-noy-uh) means “beautiful thinking” — because even in her most vulnerable moments, every mother deserves a well mind. With a growing online presence and a community that deeply needs this product, Eunoia Bra is just getting started.
Founder and CEO: Dev Roy Founded:2024 Capital raised: $300,000 Employees: 8 Service provided: End-to-end AI platform for enterprise
What makes your company different?
We prove it before you pay for it. Every engagement starts with a free six- to eight-week pilot on your real data, measuring your actual key performance indicators. We don’t sell promises — we sell proven outcomes.
We are an AI systems integrator, not a software vendor. We don’t hand you a platform and wish you luck. We co-build with every customer — capturing their unique workflows, terminology and success patterns — then deploy specialized AI agents tailored to their business.
Our architecture is fundamentally different. Zero data migration means your data never moves. No security risk, no expensive re-platforming, no monthslong implementation.
And finally — we are technology agnostic. As the AI landscape shifts daily, our customers are insulated.
That combination — customer-first proof, deep customization, zero data migration and model agnosticism — is extremely difficult to replicate at speed.
The pitch: IntraIntel.ai is an end-to-end enterprise AI platform — think of one single AI platform with our focus on “your data, your AI, your way,” connecting all different functions within your enterprise. It has 15-plus active deployments across the U.S. and India, $50 million-plus in documented customer value and an over 95% pilot success rate. Unlike point solutions, we replace fragmented “AI in pockets” with a unified, zero-data-migration platform that connects to any existing system in minutes and delivers measurable return on investment in four to eight weeks — with proven 70% to 90% operational time reductions across healthcare, clinical trial, financial services, government, cybersecurity and retail. We’re currently generating early software-as-a-service revenue and targeting $2 million in annual recurring revenue by the end of 2026. We are raising $1.2 million in seed funding to accelerate U.S. enterprise sales and scale our AI agent library.
Photo by Shandell Taylor
ALPS DX
RICHMOND
Co-founders (from left):Les Edinboro (chief science officer) and Ali Safavi (president and CEO) Founded: 2025 Capital raised: $2.2 million Employees:8 Service provided:Oral fluid testing automation
What makes your company different?
Alps Dx is redesigning and scaling oral fluid drug testing by automating its most complex and error-prone stages — from collection through sample preparation.
Today, laboratories rely on manual steps to extract, filter and prepare oral fluid samples for analysis. Alps Dx replaces this fragmented workflow with an integrated system of devices, including its Xpressor tool that simplifies sample handling through a two-step filtration and capping process and its Atelier platform that automates barcode tracking, filtration and sample preparation at scale.
By standardizing these steps, Alps Dx reduces manual handling, improves consistency and enables laboratories to scale oral fluid testing more efficiently and reliably.
The company is now expanding beyond the lab with connected collection and verification tools, including its Capra platform, which introduces digital chain-of-custody, identity verification and guided collection.
The pitch: Alps Dx is building automated and connected systems that prepare and verify oral fluid samples for drug testing.
The company is building within a multibillion-dollar drug testing market that is rapidly expanding beyond traditional lab-based methods to include oral fluid and real-world testing environments. This shift is being driven by demand for faster, less invasive and more accessible testing across workplace, clinical and emerging consumer settings.
As the company scales in 2026, Alps Dx is evolving into a platform that supports both high-volume labs and testing that begins in real-world environments, from workplace programs and third-party administrators to public safety and future consumer-facing applications.
By connecting what happens at the point of collection with what happens inside the lab, Alps Dx is helping modernize how drug testing is performed — making it more consistent, scalable and aligned with how testing is used in the real world.
Photo by Don Petersen
URBAN REBLOK’D
ROANOKE
Founder and president:Joseph Brozovsky Founded:2023 Capital raised: $0 Employees: 3 Service provided:Mixed plastics recycling
What makes your company different?
Urban Reblok’d stands apart because we’ve designed our model around the hardest part of the plastic crisis, not the easiest. Most recyclers depend on clean, sorted, high-value plastics, which represent a small fraction of the waste stream. We intentionally target the 91% that is traditionally considered “unrecyclable,” including mixed, contaminated and low-grade plastics.
Our advantage is twofold: feedstock access and process flexibility. Because we accept what others reject, we secure abundant, low-cost (often negative-cost) input supply with minimal competition. At the same time, our processing approach is material-agnostic, allowing us to handle variability without costly pre-sorting infrastructure.
Instead of competing in crowded recycling markets, we’ve created a new category that aligns with tightening regulations and growing demand for circular materials, while unlocking value where others see only waste.
The pitch:Urban Reblok’d is turning America’s most ignored waste stream into a scalable, revenue-generating supply chain. We accept what others reject to convert it into premium, reusable materials for construction and manufacturing applications. We’re paid tipping fees to take in that waste and unlock additional value on the backend, creating a dual-revenue model with strong, defensible margins and contracted supply.
With 100-plus customers and $400,000 in annual recurring revenue, we’ve proven demand, pricing power and operational viability across municipalities and commercial partners.
We are raising $1.5 million to $2 million to launch our first full-scale manufacturing hub in Southwest Virginia, expanding throughput, lowering unit costs and creating regional jobs.
As regulation tightens and brands face recycled-content mandates, demand is accelerating. Plastic waste isn’t going away; we make solving it profitable and scalable, with proprietary processing validated by pilots right now.
Photo by Caroline Martin
HARDSHELL
CHARLOTTESVILLE
Co-founders (from left): Hunter Moore (chief technology officer) and Andrew Schoka (CEO) Founded:2025 Capital raised: $1.1 million Employees: 6 Service provided: AI security platform protecting sensitive datasets
What makes your company different?
Most AI security tools today operate at the model layer, running tests on outputs or filtering prompts after deployment. That means the threats already embedded in the data, like poisoned training sets or leaked sensitive records, go unaddressed. Hardshell works upstream, securing datasets before they enter AI systems. Our platform is model-agnostic, meaning it works across large language models (LLMs), tabular machine learning (ML), computer vision and more, giving security teams a single layer of protection across their entire AI stack.
Our founding team brings a rare combination of technical depth and operational credibility. We built Hardshell because we saw firsthand how sensitive data was being pushed into AI systems without adequate protection, and the existing tools weren’t designed to solve that problem.
The pitch: Organizations in healthcare, defense and financial services are under pressure to adopt AI, but the sensitive data powering those systems remains dangerously exposed. Hardshell secures datasets before they enter AI systems, protecting against threats like data poisoning, data leakage and adversarial manipulation.
We’ve raised over $1.1 million from investors including VTC Ventures, Front Porch Venture Partners, Blu Ventures, Not Yet Ventures and CAV Angels. Our commercial customer base is growing across enterprise verticals, with an active federal pipeline supported by partnerships with defense prime contractors. Our founders bring direct experience from U.S. Cyber Command, U.S. Special Operations Command and the Department of Defense‘s Chief Digital and AI Office. Both serve as adjunct faculty at the University of Virginia’s School of Engineering and Applied Science.
Founded in Charlottesville and backed by leading investors across the region, Hardshell is securing the foundation of modern AI.
Photo by Kristen Zeis
SYNAP BIOTECH
NORFOLK
President, CEO and co-founder: Glenn Block Founded:2023 Capital raised:$115,000 Employees: 2 Service provided: Developing an intranasal therapy to unlock the brain’s ability to repair itself
What makes your company different?
Synap Biotech is focused on neurological recovery, an area that has historically received far less attention than acute treatments or symptom management.
Our approach is different because we are developing a noninvasive intranasal nanobody therapy designed to reach the brain directly and temporarily block biological pathways that prevent nerve regeneration.
By unlocking the brain’s natural capacity for repair, we aim to improve functional recovery after neurological injury. Our platform also has the potential to address multiple conditions — including stroke, traumatic brain injury and neurodegenerative diseases — rather than focusing on a single indication.
The pitch:For millions of patients who survive a stroke or traumatic brain injury, the real challenge begins after the hospital: regaining the ability to move, speak and live independently. Yet few therapies exist that help the brain repair itself once the initial injury has passed.
Synap Biotech is working to change that. Our company is developing a breakthrough intranasal nanobody therapy designed to unlock the brain’s natural ability to recover. The treatment targets Nogo-A and related pathways — molecular signals that act as a brake on nerve regeneration. By temporarily releasing that brake, we aim to enable the brain to rewire and restore lost function.
Delivered through a simple nasal approach that bypasses the blood-brain barrier, our platform has the potential to improve recovery across multiple neurological conditions, including strokes, traumatic brain injuries and neurodegenerative diseases.
At Synap Biotech, our mission is simple: Reimagine what recovery after brain injury can look like.
VC invested about $5.3B in the greater Washington region across 341 deals in 2025, according to a PitchBook-National Venture Capital Association report.
Northern Virginia, particularly government contracting, drives much of Virginia’s VC investment.
Defense tech companies luring large amounts of capital as defense industrial base fights to rebuild, catch up with geopolitical needs
Propagation of AI companies with promising vertical solutions and focus on building a domestic semiconductor supply chain are fueling investor excitement
During the past three years, Govini CEO Tara Murphy Dougherty estimates she’s handled hundreds of calls from investors looking to grab a stake in the Arlington County-based defense software firm she leads.
It was a good problem to have, she admits, albeit a time-consuming one.
“I think this is typical of many companies that are successfully navigating this market,” Dougherty says. “On a pretty much daily basis, I would hear from various investors who were interested in getting to know the company for the purposes of making an investment.”
The company’s flagship suite of AI-enabled applications — known collectively as Ark — is used across each of the U.S. military branches and within intelligence agencies to speed acquisition.
In October 2025, Govini announced it had secured $150 million from Boston-based private investment firm Bain Capital, elevating it to unicorn status with a $1.25 billion valuation.
Founded on the West Coast in 2011, Govini moved to Northern Virginia in 2016 in a pivot toward the federal government. It was drawn by the Pentagon’s establishment of the Defense Innovation Unit in 2015 to accelerate the adoption of commercial technology and expand the defense industrial base as the military realized it was falling behind its competitors.
“The conversation was really just starting around this idea of bringing in new companies or tapping into … the American technology sector in order to expand beyond just the traditional primes,” Dougherty says.
The bet paid off. As a government contractor, Govini has joined other Northern Virginia-based unicorns, as well as a host of other startups in the region that have recognized the value of being close to their government customers.
Virginia is the “heart and soul of U.S. national security,” Dougherty says, adding that Govini employees visit the Pentagon multiple times each week to meet with customers.
“It’s Defense Tech Alley here,” she says of Rosslyn, the Arlington neighborhood where Govini is headquartered. “You can’t cross the street and get lunch at Cava without bumping into a founder of another fantastic growing defense tech company.”
Venture capital buy-in
Investors, too, have taken note of Northern Virginia’s growing cache of government contracting startups and, in particular, those in the hot defense tech sector, even given federal workforce layoffs and impacts on government contractors.
Venture capitalists invested about $5.3 billion in the greater Washington region across 341 deals in 2025, according to the PitchBook-National Venture Capital Association Q1 2026 Venture Monitor. That’s up from $4.2 billion across 289 deals in 2024, and this year appears to be off to a strong start for the region, which includes Arlington, Alexandria, Maryland, Washington, D.C., and West Virginia.
Govini CEO Tara Murphy Dougherty says Virginia is the “heart and soul of U.S. national security.” Photo courtesy Govini
PitchBook reports about $950 million invested in 61 deals in the region during the first quarter of 2026, up from $671 million and 80 deals year-over-year.
Virginia as a whole recorded $2.75 billion in VC investment in 2025, up from $1.8 billion the previous year, according to the PitchBook-NVCA report. Much of that was driven by later-stage venture investment as well as about $850 million in angel and seed investment, a 10% year-over-year increase, says Joe Benevento, president and CEO of the Virginia Innovation Partnership Corp., a state-run nonprofit overseeing commercialization and funding of startups.
“Northern Virginia is still the lion’s share of overall statewide venture capital investment activity,” Benevento says, adding that much of the capital came from outside investors.
Not that Virginia’s anywhere close to Silicon Valley, which led the 2025 field with $170 billion in 3,500 deals, nearly twice the $94 billion invested in 2024, but regional experts and business leaders see progress for Virginia startups.
While government contracting has long been Northern Virginia’s bread and butter, observers see defense tech and AI companies doing business with both the government and commercial sectors.
Government activity
Federal contracting has long been a steady source of income for Virginia.
In fiscal 2024, the federal government committed about $755 billion on contracting, and the U.S. Department of Defense accounted for more than half of that, or $445 billion, according to the U.S. Government Accountability Office. Virginia is the biggest beneficiary of that spending, accounting for $109 billion in 2023, about 62% of which went to Northern Virginia, according to the University of Virginia‘s Weldon Cooper Center for Public Service.
While the federal contracting world can be a challenge to learn and navigate for outsiders, it is often lucrative, says Kevin Robbins, general partner at McLean-based Blue Delta Capital Partners, a venture capital firm focused exclusively on the federal government market.
He notes that the government’s spending on IT and professional services represents about 20% of the annual gross domestic product.
“It’s not the first place that a lot of VCs look to invest, but when you get a little bit of a hiccup elsewhere, if valuations are getting really crazy in startup land, if you’re worried that AI is going to eat all your software investments, if you’re concerned about your exposure to tariffs or trade wars, well, hey, look over here,” Robbins says. “There’s a fifth of the U.S. economy in and around technology and technology-related services that’s kind of insulated from a lot of that. … It’s a really ripe environment to invest in.”
Adding to that ripening is the Trump administration’s efforts to downsize the federal workforce, swapping out workers while encouraging technology modernization, as well as a proposed $1.5 billion 2027 defense budget.
Defense tech companies, particularly those with dual-use products designed for both government and commercial customers, are luring large amounts of capital as the defense industrial base fights to rebuild and catch up with geopolitical needs. At the same time, the propagation of AI companies with promising vertical solutions and the focus on building a domestic semiconductor supply chain — along with the resources to support it — are fueling investor excitement.
While the government tends to lag behind the commercial sector in areas like IT management and cloud migration, it is on par or even slightly ahead in places like cybersecurity, autonomy and certain parts of AI, Robbins adds.
“You’ve just got a confluence of two or three massive kinds of investment theses rolling through our zip codes,” he says.
Sector growth
Excitement is evident in large investments in Northern Virginia-based companies in 2025. Just after Govini reached unicorn status, Sterling-based Heven AeroTech, which is producing a hydrogen- powered drone, closed on a $100 million Series B round led by Maryland-based IonQ, pushing its valuation to $1 billion.
Other big winners include Manassas-based aviation company Electra.aero, which closed a $115 million Series B round in April 2025 led by New Jersey-based Prysm Capital, and Ballston-based Auterion, which provides software for military drone swarms and announced last September a $130 million Series B round led by San Francisco’s Bessemer Venture Partners.
“There is a lot of momentum in this space,” says Ryan Sublett, vice president of finance for Rosslyn-headquartered Shift5, which produces an operational intelligence platform for military and transportation customers. Founded in 2019, Shift5 raised $75 million in a Series C round led by London-based Hedosophia in 2025, with plans to use the money to continue to develop its products.
Venture capital poured about $50 billion into defense tech companies in 2025, according to PitchBook, but just a handful of years ago those same investors were wary of the sector until defense disruptors like Palantir Technologies and Anduril Industries helped rewrite the narrative, Sublett says. The Pentagon’s commitment to reforming acquisition and prioritizing innovation has motivated investors.
“Will the government know how to buy this thing, and will the government deploy it at the speed of venture capital? That’s really been the catalyst to this shift in venture being interested,” Sublett says.
Northern Virginia, home to four of the five largest U.S. defense contractors, has not been shy about trying to put its stamp on ownership of the national security sector.
“We feel like this is the Silicon Valley for defense,” says Derren Burrell, managing partner of Veteran Ventures Capital, which he started in Tennessee and moved to McLean in 2024 to be “closer to the action.”
An Air Force veteran, Burrell invests in dual-use defense tech companies run by fellow veterans, typically close to the Series A mark. Last August, Veteran Ventures Capital closed on its second fund, raising an oversubscribed $60 million. Burrell says he is investing that money in four companies and is completing due diligence with six other Virginia startups.
Building an ecosystem
While Northern Virginia’s wealth of prime contractors can lead to coattail-riding protégés, Burrell notes that regional initiatives also help lure investors and startups. In February, Arlington and Alexandria’s National Innovation Quarter launched a series of year-round initiatives to spur economic activity, including accelerators and investor summits.
Known as National IQ, it is a public-private partnership that includes a laundry list of who’s who in the National Landing neighborhood, including local and state government, academia and industry partners. Maryland real estate developer JBG Smith, the business behind Amazon HQ2 and other significant projects, is also a part of the tech hub.
“If you look at all the companies that are kind of crowding into this region, into this neighborhood, I don’t think there’s a higher density of emerging defense tech anywhere else in the world,” says Andrew Lackner, co-founder of the Virtus Innovation Center, which grew out of a partnership between Amazon Web Services, VC capital firm Energy Innovation Capital, JBG Smith and others, and focuses on defense and energy startups.
Virtus moved into its new 15,000-square-foot home at 1550 Crystal Drive in the spring with plans for up to two dozen startups to move in, Lackner says, noting that Energy Innovation Capital is raising money for the chosen startups.
“What we’ve seen so far is that there’s not a lot of innovation centers right now that are purpose-built to house startup companies in this space and provide them with the sort of platform and also the mission-aligned founder community that we’re trying to build here,” he says.
While Northern Virginia companies may be riding the wave now, one question remains: What’s next?
“We’re on the forefront. … I think that this is just the beginning,” Burrell says, adding that defense tech will continue to have a leading edge, in part because “we are seeing real world threats that are continuing to escalate on the technology curve. We have to continue to do that in order to maintain our edge. I see this trend continuing to double and triple over the next several years.”
Robbins, meanwhile, offers the same advice he gives to Blue Delta’s portfolio companies: “Be ready to go at any time.”
What technologies are cyber startups tending toward, and are those focuses reflected in Virginia?
The current landscape is continuing its evolution from static defense to proactive resilience. Startups are prioritizing agentic AI, non-human identity security and supply chain transparency to combat the rise in malware-free intrusions relying on social engineering and stolen credentials. We are tracking the rise of agentic AI and autonomous security operation centers, where startups deploy AI analysts to triage with autonomous remediation permissions. There’s a particular surge in securing non-human identities to detect autonomous malicious machine-to-machine access.
While Virginia-based startups mirror global trends, their unique strengths lie in defense tech and critical infrastructure protection. These startups are more likely to be dual-use oriented, and have differentiators linked to compliance and energy-conscious AI.
How competitive is the market for AI cybersecurity tools, and what can founders in the field do to stand out?
The 2026 AI market is extremely competitive, with a few massive platforms capturing the majority of resources while thousands of startups fight for the remainder. This is driving a shift from point solutions to integrated platforms as enterprises attempt to fix “tool sprawl.”
To compete, new startups are carving out “deep tech” moats in niches like non-human identity (NHI) security and “circuit breaker” protections for AI agents against prompt injection in a space where machine identities now outnumber humans 50-to-1. AI startups must shift their focus from “selling AI” to “solving outcomes,” differentiating themselves by moving towards agentic systems that safely execute.
What emerging technologies are gaining ground?
Virginia’s cybersecurity sector, in particular, is focusing on quantum-resistant security through quantum-proof keys and crypto-agility to meet new federal standards, as well as securing machine-to-machine communication to address growing AI concerns.
Hall
RYAN HALL
EXECUTIVE DIRECTOR, SHENANDOAH COMMUNITY CAPITAL FUND AND SHENANDOAH VALLEY TECHNOLOGY COUNCIL, STAUNTON
What is unique about the entrepreneurial ecosystem in your region?
The Shenandoah Valley is extremely collaborative. Our strength really stems from the rural hospitality any tourist receives when they visit. That same energy extends to entrepreneurs when they are looking for resources or access to capital. Our assistance doesn’t stop at a county line or revenue threshold. Each support organization in the valley is dedicated to building a stronger regional support network, and our entrepreneurs feel it.
SCCF made several changes to its programs within the last year — which has had the greatest impact?
We’ve made a concerted effort this year to realign our programs with our strengths in capital access and acquisition. For nearly 20 years, we’ve been lending to entrepreneurs in the valley, and we want to make sure that expertise is conveyed to our program participants whether they are looking for equity or non-equity funding. While not a big visible change, I think adjusting our curriculum point back to capital building and sound financial practices is making the biggest impact.
How do SCCF microloans assist entrepreneurs?
We hold a unique space in the incubation/acceleration community because we are able to provide loans to startups. Some programs have access to equity capital, but we have the ability to provide early-stage startup capital in the form of a five-year loan of up to $50,000. Generally, entrepreneurs have used these funds for overhead costs, minimal viable product development, equipment purchases, etc. Our only limitation is commercial property acquisition and buildout.
Lattimore
SOMIAH LATTIMORE
EXECUTIVE DIRECTOR, APEX CENTER FOR ENTREPRENEURS, VIRGINIA TECH, BLACKSBURG
You joined Virginia Tech from the University of Richmond last year. In what ways do the entrepreneurial ecosystems of these universities differ or overlap?
Both ecosystems are collaborative and interdisciplinary but differ in scale and context. Richmond offers an intimate environment with strong metro connectivity, and its initiative began just before my tenure.
In contrast, Virginia Tech founded the Apex Center for Entrepreneurs 10 years ago and operates on a larger scale, providing access to a broader talent pool through a land-grant university-wide platform and supporting founders at all stages.
Richmond’s ecosystem is shaped by proximity and close-knit relationships; Virginia Tech’s by technical breadth, scale and national reach, with particular density in Virginia and an established footprint across the commonwealth.
What attributes do aspiring student entrepreneurs need to be successful?
Curiosity, resilience and coachability are essential. Successful entrepreneurs test assumptions, engage customers early, accept feedback and iterate continuously. They combine ambition with humility, collaborate across disciplines and remain focused on the problem. Initiative is also important; founders who begin before feeling fully prepared often learn the fastest. Entrepreneurship is about taking action and building habits through real-world experimentation, rather than waiting for the perfect idea.
What industries are Virginia Tech student founders interested in?
Our students are committed to improving the human condition. There is strong interest in technology and AI solutions, fintech, edtech, healthtech and social impact and sustainability ventures, as well as creative and community-based businesses. This diversity reflects the interdisciplinary approach of Virginia Tech entrepreneurship, where founders often blend technical, design, business and service-oriented skills.
Miles
DELCENO C. MILES
PRESIDENT AND CEO, THE MILES AGENCY, VIRGINIA BEACH
Based on your own experience as a founder, what advice would you give other entrepreneurs?
Seek support from credible and knowledgeable experts/mentors who are where you aspire to be. Have a solid plan about what your business is and who your target audience(s) are. Expand your network in the community and in your industry by joining affinity organizations. Volunteer your services if necessary as you build your business and brand to give prospective clients a preview of what your capabilities are. Consider teaming with others to build capacity for client pursuits. Use resources designed to support your business at little to no cost, such as the Small Business Development Center in your area, the U.S. Small Business Administration and the Virginia Department of Small Business and Supplier Diversity, to name a few.
What challenges might entrepreneurs not take into consideration when starting a business?
Entrepreneurs might not consider the financial and time commitments needed to build and scale your business. Owning a business is definitely not a 9-to-5 type of endeavor. Most startups are usually underfunded and may not have the collateral to receive financing from traditional resources like banks or credit unions. Whatever funds you have, carefully invest them into the business, not the perks like cars or fancy office space. Keep your overhead as low as possible. Work from home. Hire support team members on a contractual basis versus employees. It saves money and you only pay for what you need at the time.
What are the key elements of a successful pitch to prospective clients?
The primary key elements are what distinguishes you from your competitors and your success record. Clients want to know how you can help them solve their problem(s). Be ready to address that directly.
O’Daniel
JENNIFER O’DANIEL
SENIOR DIRECTOR, VIRGINIA VENTURE PARTNERS; PROGRAM MANAGER, VIPC LAUNCH, VIRGINIA INNOVATION PARTNERSHIP CORP., RICHMOND
What trends are you seeing among Virginia startups, particularly software and cybersecurity startups?
We are seeing a significant increase in AI startups across Virginia, enabling faster product development cycles and accelerating time to revenue. In cybersecurity, startups are increasingly centered around AI-native solutions, with founders building automated, intelligent platforms rather than traditional tools. At the same time, there is growing momentum around dual-use technologies and digital twins, reflecting the region’s strong intersection of commercial innovation and government-driven demand.
What challenges are unique to Virginia’s entrepreneurial ecosystem?
Virginia has emerged as a top 10 venture capital market nationally, underscoring the strength and momentum of its startup ecosystem. However, at the same time, investors are writing fewer, larger and more conviction-driven checks, with heightened expectations around traction, revenue and capital efficiency.
Pre-revenue and pilot-stage companies have faced increasing challenges in raising angel capital. To help address this funding gap, VIPC launched the Launch Note program, which incentivizes angel investment by matching capital at a 1:2 ratio. Through this initiative, we have funded seven companies over the past several quarters.
What do you look for when you’re evaluating applications for the VIPC Launch Grant for early-stage startups or for the Launch Note program?
We seek founders with deep domain expertise, paired with the passion and conviction needed to attract and inspire top talent. We prioritize companies addressing large, scalable markets that can draw venture capital into Virginia and drive meaningful job creation. Equally important, we look for clear evidence that customers will derive real value from the product.
Steele
MIKE STEELE
PRESIDENT AND CEO, ACTIVATION CAPITAL, RICHMOND
How does Virginia’s life sciences startup ecosystem compare with those of other states you’ve worked in? What lessons could Virginia learn from them?
Virginia is highly competitive, but it is still earlier in its maturation curve than states like Massachusetts, North Carolina and New Jersey and has similarities to Georgia, all pit stops during my career. What Virginia has today is a strong research base, growing entrepreneurial activity, lower operating costs than the major coastal hubs and increasing momentum in manufacturing and commercialization.
The lesson for Virginia is not to copy any one state. It is to be intentional about building the pieces of a complete ecosystem. Virginia can win by doing four things well: supporting entrepreneurial support organizations and expanding early-stage capital; scaling wet lab and pilot/manufacturing infrastructure; creating a more coordinated commercialization-to-workforce pipeline; and making site selection and permitting easier for growing companies while maintaining its status as a top tier business-friendly state. Virginia already has the core assets. The opportunity now is to connect them with the same level of long-term strategic discipline that made those other states nationally competitive.
In what ways did Activation Capital expand its Frontier BioHealth accelerator in February?
Frontier BioHealth was created to address a critical gap facing emerging biohealth founders: access to practical guidance, sector-specific expertise and trusted connections needed to translate scientific innovation into scalable, investable companies. Following its first cohort, the program is advancing with deeper advisory engagement and a more flexible delivery model informed by founder feedback and early outcomes
Frontier BioHealth is now delivered through a more flexible engagement model, including rolling admissions and an asynchronous cohort structure, allowing companies to participate alongside ongoing research, development and commercialization efforts. This approach reflects the realities faced by scientific founders who must balance lab work, regulatory planning, fundraising and team development without stepping away from critical work.
Companies are raising more capital, staying private longer and exiting later (if at all) nationwide, and Virginia is no exception.
Median time to IPO rose from 5.4 years in 2020 to 7.4 years in 2025, according to PitchBook analyst
Companies have more funding options than they used to, evident in how the private investment market has ballooned.
When Blake Hall co-founded ID.me in 2010, he intended to take it public. More than 15 years later, the McLean-based digital identity company is still private. But Hall says it’s not a failure of ambition; it’s a sign of the times.
“There’s so much more capital in the private markets now that it is just easier to get access to liquidity and to defer going public than it has been, maybe like 10 to 20 years ago,” he says.
Hall acknowledges ID.me isn’t really a startup anymore, explaining it is “a growth company on the [initial public offering] track.”
The company has raised hundreds of millions across multiple late-stage rounds and is actively in the pre-IPO process, but the path has stretched longer for ID.me than it did for other businesses that previously went public.
Instead, companies are raising more capital, staying private longer and exiting later (if at all) nationwide, and Virginia is no exception. The median time from a company’s first venture capital round to IPO grew from 5.4 years in 2020 to 7.4 years in 2025, says Emily Zheng, senior VC research analyst at PitchBook. The median Series D or later company is 10 years old, up from 8.4 years in 2015.
“This means that a majority of late-stage startups have founders and early employees who have been waiting over a decade for liquidity,” Zheng notes.
Virginia companies collectively raised $2.75 billion in venture capital in 2025, according to the PitchBook-NVCA Venture Monitor. That’s roughly triple the amount raised in 2015. Nationally, megadeals of $100 million or more became more common in 2025, a sign companies would rather raise more late-stage rounds than plan for a sale or IPO.
Why are companies staying private for longer? They have more funding options than they used to, evident in how the private investment market has ballooned. BlackRock projects it’ll grow from $13 trillion in 2024 to $20 trillion by 2030. That gives founders the chance to raise more capital without the attention of being a public company.
“It’s hard to be a public company in terms of the operating rigor and the scrutiny,” Hall says. “You can clearly get access to massive liquidity without going to the public markets.”
Speed bumps
Amias Gerety, partner and head of the U.S. for Alexandria-based QED Investors, says the bar for public markets has risen. He recalls pitching an investor in 2021 on one of his portfolio companies “flirting with a [special purpose acquisition company] deal” doing $40 million in revenue and on track to hit $100 million the following year.
“I don’t have time for companies with $40 million in revenue,” Gerety says the investor told him.
“In order for it to be worth the time of the mass of public market investors, you need to have enough scalebto be interesting to them.” That threshold is roughly $500 million in revenue and a $5 billion market cap, he says.bLate-stage private rounds also provide greater proof of value for employees. Secondary transactions, in which existing shareholders sell a portion of their stake to new investors, give employees a chance to see their equity become real without forcing an IPO, Hall says.
“People can buy houses and change their lifestyle,” Hall says. “So the question might almost be the reverse: Why would you go public? You can solve for all capital needs [and] avoid this microscope that’s always over the business.”
Hall still insists, though, that ID.me will go public. “Successful IPOs [have] a predictable business,” he says. “If you have a predictable business, then being public can be amazing.”
While Hall’s company is staying private from a position of strength, not every company is.
Zheng describes the current landscape as a “tale of two markets.” After interest rates rose sharply in 2022, venture activity slowed and exits dried up. Fewer exits meant fewer cash returns to limited partners — pension funds, university endowments and wealthy individuals who supply the capital that VC firms invest — and that made them more selective about new funds they’d back. Plus, investors have become obsessed with AI-related startups since ChatGPT’s introduction in late 2022.
“This hyper-focus on top startups and AI has allowed these companies to raise seemingly unlimited amounts of private capital at rapidly rising valuations, reducing the need to exit, while the rest of VC struggles to close a single round,” Zheng says.
Meanwhile, Gerety and Hall agree the calculus for going public has changed. Hall describes an IPO as a “one-way door,” meaning once a company goes through it unprepared, there’s no easy way back. A miss on earnings can tank stock prices, resulting in diminished employee morale.
“The operating discipline to go public and have it be a wise decision over the medium to long term requires a level of excellence that a lot of young companies simply don’t have,” Hall says.
Founders, startup support organizations and universities are implementing AI.
Users should fact-check and think critically about responses from AI tools.
Rakesh Nair, an engineer with experience building large-scale platforms for companies like Capital One Financial, Wipro and Fiserv, had a problem. His annual contract for lawn-mowing at his Glen Allen home called for weekly service, but the growing season fluctuated, meaning some weeks his grass didn’t need a haircut.
Those bills, though, kept coming. So, he decided in 2024 to build a platform where the customer had full control, the ability to pause or change the schedule at will. His startup, Nestease, began with mowing but soon branched out into about 20 services, including cleaning, junk removal, tree trimming, yard materials delivery and pressure washing.
As the sole founder, Nair does everything from engineering to marketing to scheduling delivery. But he doesn’t do it alone.
“I have to say that my co-founders are the AI that I work with,” he says, adding that he uses artificial intelligence daily. “Instead of talking to another founder and giving them ideas, I run my ideas and everything else through AI.”
Like many startup founders, Nair has discovered that leveraging AI is a force multiplier, reducing cost and time.
Carlos Bortoni, senior director of global tech strategy at the University of Virginia‘s Batten Institute for Entrepreneurship, Innovation and Technology, has watched AI become indispensable.
“It’s really interesting to see how the startup ecosystem and how entrepreneurs have quickly gravitated towards AI tools,” Bortoni says, “as a mechanism, and, in many cases, as a valued co-worker, in terms of the entire funnel, when thinking and launching and scaling a startup.
“The speed through which someone can come up with a prototype and take it to market to test that assumption is from zero to 60,” he adds. “It’s insanely fast.”
Charlie O’Brien, senior product and operations manager at Norfolk incubator 757 Collab, says the organization has helped entrepreneurs use AI to brainstorm and plan in weekend sessions.
“At the end of the day,” he says, “execution is pretty much everything in the world of startups, and AI is not only helping you ideate more properly, think through who your customers are, discover the best practices, but then also go through and execute your vision and bring that to reality.”
Saving money
Historically, startups needed someone with a tech background on the team, Bortoni says. That’s no longer the case. Not only can a nascent company create a prototype more easily, but AI jumpstarts scaling because it’s not necessary to hire as many people to connect with customers and do the marketing.
“The landscape is changing, I like to say, by the week,” he says, “which makes it incredibly exciting and also terrifying for established players who can’t keep up.”
Student teams, Bortoni says, recently were given use cases by the university’s health system and collaborated with AI to produce a range of prototypes for processes like emergency room triaging and drug development.
“That’s on the front end, which I find very exciting,” he adds. “How do you connect real-world problems with people who can build a prototype quickly?”
Nair used AI to do market analysis, track customer engagement patterns, determine routing for crews, and even to build screens he needed for internal use and the Nestease website, something that would have taken weeks in the past.
He has crews take photos of their work. AI checks and helps determine if they need to rectify any deficiencies. He plans to start using photos and videos run through AI to create pricing quotes that customers can see immediately.
A Virginia Tech electrical and computer engineering professor, Creed Jones is also co-founder and chief technology officer of Blink Frames, which created eyeglasses that track ocular health data. He says the company used AI to examine its data security as well as components like light sensors for the glasses. Using AI to research components rather than hiring consultants saved the company significant money, Jones says.
Bortoni agrees that AI means startups can be more strategic in their hiring, potentially leading investors to consider prototypes fleshed out with AI early in development.
“It allows you to move the ball farther down the field for longer before you need to hire someone with that technical background, and you may not need to hire five or 10 engineers,” he says. “You may only need one or two.”
What happens when everyone has access to AI that solves problems, publishes websites, creates media, finds customers and helps with procurement?
“If you’re an early adopter,” O’Brien says, “I would say you got first mover advantage.”
But, he cautions, “You’ve got to fact-check it, understand it and critically think. Those skills are just as important now as the ability to create incredibly high-quality work is easier than ever, but it’s also just as easy for that information to be false.”
Several Virginia health systems have officials trained to help commercialize practitioners’ ideas for medical devices or diagnostic tools.
VCU’s TechTransfer and Ventures office helped Dr. Jonathan Isaacs launch Nerve Tape.
Carilion Clinic launched the Carilion Innovation department in 2020.
U.Va. established its Comprehensive Cancer Center Accelerating Innovation Fund in 2024.
Whether bedside or in the operating room, healthcare practitioners see firsthand where medical technology falls short — and where opportunity exists.
“We love to get inventions from doctors … because their inventions fill a specific gap in the market,” says Ivelina Metcheva, assistant vice president for innovation at Virginia Commonwealth University.
Medical school may prepare pediatricians to treat strep throat, but most doctors don’t graduate with expertise in patent law or business development. That’s why several health systems in the commonwealth connect practitioners with officials trained to shepherd promising ideas for medical devices or diagnostic tools through development to commercialization.
Dr. Jonathan Isaacs, chair of VCU Health’s Division of Hand Surgery and a professor in the School of Medicine, knew his field of medicine had a problem: Repairing nerves with sutures is time-consuming and technically demanding.
About 15 years ago, Isaacs brought a kernel of an idea for a solution to VCU’s TechTransfer and Ventures office, which helps commercialize inventions created by VCU scholars and staff.
The office staff works with inventors to preserve patent rights before they share their research.
“Their goal is to get you in a situation where you’re protected,” Isaacs says.
Not every idea for an invention makes it to commercialization, but Isaacs’ did. His Nerve Tape uses biomaterial and integrated microscale hooks to connect nerves faster and more accurately.Since the product entered the market in 2024, more than 3,500 nerve tape devices have been implanted.
The business side
In 2020, Roanoke-based Carilion Clinic launched the Carilion Innovation department to support employees interested in developing medical devices and other healthcare-related inventions.
The creation of the office wasn’t a response to a single inventor who needed help. Rather, “it was really more a sense that there was, overall, a pretty big desire to be innovative and work on the future of healthcare and not any resources in place to do that,” said Aileen Helsel before she left her position as Carilion’s director of innovation in late May.
Today, when a Carilion employee comes forward with an idea, Carilion Innovation evaluates its potential — not only for profitability but also for patient impact, particularly in rural communities.
“We can pursue some things that aren’t going to be quite as lucrative as maybe other groups would require,” Helsel said.
Carilion Innovation can help with rapid prototyping and outside expertise. The office also offers funding to develop innovations, ranging from $5,000 to $50,000.
As of mid-March, Carilion Innovation was working on between eight and 10 active projects.
“We have three that are sort of preparing for a spinout for startup companies, and we have probably about five more or so that are more or less ready to be licensed,” Helsel said.
At the University of Virginia, Sharon Krueger, senior director of research commercialization programs and relationships in the medical school’s Office for Research, oversees multiple funding programs, including the U.Va. Comprehensive Cancer Center Accelerating Innovation Fund established in 2024.
The U.Va. Cancer Center has committed $1 million annually for the program and provides grants of $150,000 to innovators.
To compete for funding, applicants must clearly demonstrate how their innovation improves on existing solutions and show an understanding of the market.
“What I primarily do is kind of teach the business side and storytelling of their technology,” says Krueger.
After inventors submit detailed applications, a review board composed of scientists, licensing experts and venture capitalists select finalists for oral presentations.
Those selected for awards must meet specific milestones, positioning projects for future investment.
Even applicants who aren’t selected remain on Krueger’s radar.
“It might be a year or three years down the road where I come across some opportunity,” she says.
VCU offers a $50,000 commercialization fund that helps inventors build prototypes, conduct studies and refine their technologies for industry partners or investors.
When a license is secured, VCU inventors receive 40% of the proceeds, with the remainder distributed among the university, the inventor’s department and the relevant school.
U.Va. as a whole follows a similar model, distributing 35% of licensing revenue to inventors, with the remaining funds allocated to university programs and research support. Carilion officials declined to detail their revenue-sharing structure but said inventors do receive financial benefits.
Isaacs credits having the VCU TechTransfer and Ventures office with the success of his Nerve Tape.During development, Isaacs had trouble finding someone with the specialized expertise to engineer microhooks.
He later discovered Atlanta-based Axion Biosystems, a company with expertise in microneedles. The company’s leadership, however, wasn’t initially excited to use their technology to repair nerves, according to Isaacs.
Thankfully, VCU’s TechTransfer and Ventures office got the deal made.
“If they hadn’t navigated it perfectly, we would have ended up with nothing,” Isaacs says.
In 2019, BioCircuit Technologies spun off from Axion Biosystems to focus on Nerve Tape. Last year, the company was named to the 2025 Inc. 5000 list, recognizing the fastest-growing private companies in the United States.
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