Mobilizing Private Capital for National Security:

The Challenge

In "Arsenal of Democracy 2.0: Mobilizing Modern Capital for America's Defense," BENS CEO General Timothy M. Ray, USAF (Ret.), and BENS member Al Puchala, CEO of CapZone Impact Investments, draw a compelling parallel between America's World War II industrial mobilization and today's defense production challenge. Their key insight: where Roosevelt's production chief William Knudsen worked with major banks and corporations, today's defense industrial base must attract capital from a $50+ trillion ecosystem of private equity, venture capital, institutional investors, and distributed capital markets. The principles of bankable commitments and clear demand signals still apply—but the mechanisms for mobilizing capital have evolved dramatically.

The challenge we face is urgent. America must confront a defense production crisis amid the most complex and dynamic security environment in generations. We cannot scale manufacturing capacity fast enough to meet strategic demand. The problem is not innovation—most needed capabilities already exist. The problem is production: we lack the ability to manufacture at the scale and speed required.

Traditional solutions, meanwhile, are proving inadequate. Congressional appropriations are necessary but insufficient. Even at historic levels, defense budgets cannot close critical gaps in industrial capacity and supply-chain resilience on strategically relevant timelines. We are spending roughly the same in real terms as during the Reagan build-up, yet getting far less capability per dollar due to rising personnel costs, maintenance of aging systems, and procurement inefficiencies.

The Opportunity

Yet there is a path forward. Our campaign is premised on the idea that America has the financial firepower to address this challenge. Our capital markets are the deepest and most liquid in the world. The binding constraint is not the amount of capital available—it's bankability. Private investors remain on the sidelines because defense markets are characterized by unclear demand signals, stop-start procurement cycles, and high friction in contracting. When speed is decisive, we cannot afford to leave this capital untapped.

Our Approach

BENS will release individual recommendations, each championed by member experts. Drawing on BENS members' extensive experience across private equity, venture capital, investment banking, and defense contracting, we are introducing novel concepts and approaches to make the national security ecosystem more investable.

Mobilizing private capital for national security requires new thinking on all sides—a recognition that traditional procurement approaches and investment paradigms must evolve to meet this moment. At BENS, we see our role as a connector between government and the private sector. In this case, that means helping government understand what investors need to invest, and helping a broad range of investors understand the opportunity to rebuild the national security industrial base.

There are already signs that the U.S, government is developing new financial tools. As it becomes clearer what those tools are, we may identify ways to ensure the private sector is positioned to collaborate effectively with the government's toolkit. In the meantime, at BENS we have been working with several of our members who have expertise in capital markets and related industries to highlight the opportunities available as the Department of Defense and other agencies develop that toolset.

A common theme across these initial tool-building recommendations is an insight from the Arsenal of Democracy 2.0 framework: government would benefit from understanding the factors that encourage investors to deploy capital in commercial opportunities. Those factors include demand visibility, or the degree to which defense contractors and investors can see and predict future government purchasing intentions; demand durability, or the stability and predictability of government purchasing commitments over multiple years; demand opportunity, or the breadth and scale of potential markets for defense production, with larger demand signals making investment more attractive; and defense topline growth, in other words, increased appropriations.

Our Intended Impact

These member recommendations are not fully detailed implementation plans. Rather, they represent ideas drawn from private sector experience that deserve serious consideration and refinement through engagement with policymakers. Some will prove immediately viable; others may require substantial adaptation. All are offered to advance an urgent national conversation.

If you are interested in what you see—or if you have other ideas—please let us know. We welcome anyone interested in working with BENS and our members to help the U.S. government recapitalize the nation's national security infrastructure and industrial base.

For government partners: if you are developing financial tools designed to facilitate private sector co-investment and want to test your ideas with capital market experts, or simply explain the opportunities you are creating, please reach out.

The Arsenal of Democracy succeeded because Americans understood the stakes and acted with urgency. Today's challenge is no less consequential. By bridging the gap between our world-class capital markets and urgent national security needs, we can build the industrial capacity America requires. The recommendations that follow represent the beginning of that effort.

Digital artwork created with the assistance of ChatGPT (OpenAI).