VC firm Overlap brings on Pentagon alum to advise defense tech startups on working with the government

• Overlap Holdings hires Elizabeth Stockton to lead its defense tech advisory practice.
• With Pentagon experience, Stockton will guide startups on government contracts and policy impacts.
• Overlap aims to align frontier tech startups with federal agencies for better outcomes.

As Silicon Valley cozies up to defense tech, some venture capital firms are deepening their ties in Washington, D.C.

One firm making this push is Overlap Holdings, a New York-based venture firm that writes follow-on checks for early-stage frontier tech startups — building capital-intensive products in climate, energy, life sciences, space, robotics, semiconductors, and material science. It recently hired Elizabeth Stockton, former special assistant to the Undersecretary of Defense for Policy, to lead its new defense tech advisory practice. She'll serve as director of government solutions from Washington, D.C., the firm told Business Insider exclusively.

Stockton always envisioned herself becoming a public servant. "I remember reading my parents' copy of the paper and being more drawn to the international section," she told BI.

After studying international relations at St. Andrews University, she "went from a very small team to the largest bureaucracy in the world" — first in operations and business development jobs at two startups, then to the Pentagon in policy and operations roles.

There, Stockton worked for the Assistant Secretary of Defense, ensuring that the US industrial base could deliver capabilities warfighters need — a role she assumed only six months after Russia invaded Ukraine. "It kind of felt like the broader world was waking up to how our manufacturing capacity has really shifted over the last three decades," she said of this experience.

Her work with both incumbent defense companies and emerging players reignited her interest in the startup ecosystem. At Overlap, she hopes to combine her D.C. and operational expertise to help startups interpret how policy changes affect their business models.

"The decisions that are made in Washington impact companies day in and day out," Stockton said. "The need to expand our domestic capacity across all these frontier technology companies only remains more urgent."

Stockton won't be investing at Overlap. Instead, she'll work with startups directly, offering them tailored guidance on which grants or contracts best suit their stage, sector, and product. She will also tap into her D.C. network to connect startups with key government employees and experts.

With much of the venture capital ecosystem centralized in Silicon Valley, many frontier tech startups often don't know where to start when looking to secure a coveted government contract, which is often crucial to their business models and future fundraising opportunities.

Justin Stevens, Overlap's founder and CEO, is betting that better alignment between frontier tech startups, the venture firms that back them, and the federal agencies they depend upon for contracts will lead to stronger outcomes.

"This world needs that connective tissue in the middle," Stevens said, "for the betterment of the frontier tech ecosystem, but also for the betterment of government and the mission and the country."

This is Overlap's second advisory business. The five-person firm also runs a capital solutions arm, which helps startups raise debt for resource-heavy efforts like building hardware. It's headed by COO Rob Morelli, who previously led syndicate and structuring for mortgage and asset-backed products at UBS.

While Overlap's units' services are available to portfolio companies, the capital and government solutions businesses generate revenue by charging non-portfolio companies a fee, Stevens said.

To Stevens, Stockton is a "Swiss Army Knife" asset to the Overlap team.

"I saw inside the building — and outside as well — that it's not just private market dollars or just government dollars that these companies need to be successful and scale and grow," Stockton said. "It really needs to be that collaboration, and this role really gets to sit at that intersection."