Michelle Volz is the founder and Managing Partner of Pax Ventures, an early stage venture capital fund focusing on the defense, energy, and industrial sectors. She’s part of a new cohort of investors focused on the intersection of technology, industry, and national power. A former partner on Andreessen Horowitz’s American Dynamism team and an early Palantir employee, she has built her career at the frontier where software meets the physical world.

Last month, Pax closed its first fund after raising $52 million from investors. I spoke with Michelle about her vision for Pax Ventures, her love of running, and her observations on Silicon Valley’s shifting relationship with the defense sector. What follows is a transcript of our conversation.

CB: I saw you ran D1 track and cross country. Are there any particular highlights from that part of your career, or persistent lessons that come from competing at that level?

MV: I’ve been running for a very long time. My mom ran in college, my older brother ran in college, so I was introduced to running at a young age. I actually ran for the same coach and college that my mom ran for, which I thought was very funny. Minnesota is a very small, insular community. And I would say I always had this very deep competitive streak. When I graduated, I had to keep doing races to give myself something to compete for, and ended up doing a lot of marathons, and went after this very obscure Guinness world record for the fastest aggregate time running a marathon on all seven continents. There’s a small number of competitors in the pool of women that have run on every single continent. But it was this nine-year, lifelong goal. It takes a while to find all these marathons and train for them and run them. And I would say I need to have a race on the calendar, or a goal to be striving for. That’s how I motivate myself. There are different types of motivation. If you know yourself, you know what type of motivation drives you. Mine is very goal oriented. I need a goal to force myself to train.

CB: You need to be in training mode.

MV: Yeah. Or going after a goal mode, going after a certain time, or some kind of record.

CB: What’s your proudest race?

MV: My race in Antarctica, I won the whole thing. I beat all the men. It’s probably the only race where I get to say that.

CB: How did you end up in venture? You were at Palantir, later Andreessen Horowitz. What drew you into that field as a competitive person?

MV: I worked at Palantir and then worked at a couple of different startups after that. At the last one, I was on the founding team. It was a real estate startup. It’s dead now. I applied to business school, as sometimes lost people do when they’re trying to figure out their life, and got into MIT. When I went to MIT, I thought I was going to start a company, and I wanted to get back into national security. I knew the Anduril team really well. It was just starting to really take off. This was 2020, before Russia invaded Ukraine. So I got to business school. I started a defense tech club. I did a year-long fellowship with the Defense Innovation Unit, meeting all the founders at the time — a much smaller number than now — worked in defense. I didn’t expect to go into investing, but because I was meeting all of these founders, I was then also meeting a lot of investors and hearing how people thought about the space.

Everyone hated defense. They’d say things like, “Anduril is not even a real company.” People were hating on Palantir, in 2021 everyone was like, “tech-enabled services aren’t a thing. Palantir is just consultants.” I would get so annoyed. I started developing this defense and dual-use investing thesis, mostly because I was arguing with all these investors all the time. And then I got very lucky. Andreessen Horowitz announced they’re starting this American Dynamism team, and I was in the right place, right time, and ended up being the first partner they brought on to that team. Turns out I love investing. I love company building. And now I get to help founders a lot at that stage. It was this perfect blend of getting to do the investing side that I love, but also getting to build something of my own.

CB: Why did Silicon Valley’s relationship with defense sort of die out in the post-Cold War era, and how would you explain the cultural shift that has taken place in recent years?

MV: There’s a few different ways to answer that. One is on the tech side itself. The government used to be the main innovator of technology — creating the internet, GPS, and a lot of the tech we use today. They really started this era of the computer software revolution. Now we’re seeing a lot of pull from the private sector. The government is still providing the contracts, but they’re pushing the R&D and innovation to the private sector and letting the private markets participate in that part of technology creation. I think that’s actually a very good balance.

Government should still dictate some of the requirements and reward the things that they want and are working well. You can look at SpaceX — a lot of their early contracts were from the government. Palantir got lots of early government contracts. But the ability to have R&D dollars come from the private sector allows for a broader pool of competition to bring more interesting technologies to the forefront. So I think the shift for Silicon Valley is, in some ways, going back to its roots of building for defense, but opening up the markets a little bit more, and opening up the founder pool a little bit more, which I think is great.

On the cultural shift side, there was definitely a period in the 2010s where people got allergic to all things government, all things defense. My sense of what started to happen is that people began realizing the period of relative stability they had taken for granted was starting to wane. And now people who are very talented and don’t want the country to stagnate are getting involved.

CB: As somebody who’s worked inside startups and allocated capital, what would you say is the main differentiating factor between a successful founder and an unsuccessful one? If you can point to just one — or maybe there’s multiple?

MV: VCs constantly try to pattern match, and it ends up being the outliers who are the ones that create totally new categories. What I have found is that it takes extreme grit and determination and a different viewpoint on a market that comes from experience and knowledge and understanding, and the resilience to go make that happen. People at Palantir — which often spins out founders — would describe it as people that are just willing to chew glass for longer than other people, which I think is very true. Starting a company is very hard. Everything that can go wrong will go wrong. People glamorize being a founder, but it is the loneliest, hardest job out there. You have to really, really want to make this thing happen. You just have to have the pain tolerance to make it happen, which is probably the number one founder trait.

CB: Is money a good motive in itself? Or does it distract from the big picture?

MV: Ambition, and wanting to be very successful, can work as a motivation. I would argue that it shouldn’t be the only thing motivating you, but I don’t think it’s a bad thing to have. For example, I would like to have a very nice house. It’s a helpful additional motivator for me. But it feels very meaningful to be supporting founders working on important things.

CB: In some of your thesis materials, you mentioned Pax Technica. You’re observing the world shifting in a new direction, and you want to capitalize on that, so tell me a little bit more about that element of your thesis.

MV: The name Pax comes from a reference to Pax Americana and Pax Romana, historical periods of relative stability defined by who had the best technology. The Romans had the best engineering. Britain had the best industrial might and the best navy. And then Pax Americana had the best technology and nuclear power for a long time. Geopolitically, for the first time in my life, we have a great power competition. I think the next era of relative stability will be defined by who has the best technology. I want to back the founders who are building that technology to ensure peace and prosperity.

CB: If you were to group the most consequential technologies in development right now, from an investor’s standpoint, what are you looking at? What opportunities do you see?

MV: The most exciting categories, which I have invested in, are where software and AI intersect with the physical world. That wasn’t the case 10 years ago. Software was eating software. Now, I think for the first time, the hardware has caught up, and they’re advancements that allow for software to be deployed at the edge. Software to be deployed in manufacturing facilities, autonomous machinery and robotics can come in to improve economics or work in places that previously weren’t able to be innovated in.

For example, one of my companies is a mining company, and they are bringing a lot of automation into mining operations. That’s allowing a big copper mine in Utah to be reopened. They didn’t have the skilled labor, they didn’t have the equipment, the economics didn’t work. Now they’re restarting this gigantic copper mine and employing a ton of people in the area, and that is only possible because of the technology that exists today.

Starlink is another enabling technology, similar to maybe GPS, in some ways. Where GPS ushered in this whole new wave of companies when it came out; Uber couldn’t have existed without smartphones and GPS. But when GPS satellites were launched for the government, no one thought “Aha, like, now where there’s going to be some sort of marketplace for cars.” Somebody innovated because of an enabling technology that existed. I think Starlink is the next enabling technology. What can you do when you have connectivity everywhere, and you’re not limited by the physical infrastructure? That means internet on planes, cars, boats, in the ocean, in mines— places where you couldn’t bring a bunch of cables.

So you have deployment at the edge, AI becoming much better. Chips have become smaller and more energy-efficient. There’s a lot of innovation happening there. I have a couple of nuclear investments, which I think are really exciting. And then, autonomous systems in general — I think the next age of autonomy is upon us, whether that’s in defense, whether that’s in robotics and manufacturing, whether that’s in transportation and supply chain. We’re going ot see a whole new set of really exciting categories.

CB: What are the main inefficiencies in mining that AI in particular will solve?

MV: There are two major areas. The first is the management of building infrastructure itself, which is actually the biggest bottleneck to big infrastructure projects like starting up a new mine. My whole family are civil engineers who build bridges, and the amount of planning and logistics and operations required to get a big infrastructure project up takes years and tens, hundreds of millions, sometimes billions of dollars. A lot of that can actually be automated through sophisticated and very complex flow charts of dependencies — mapping all the inputs that feed into a project, and showing how a change in one thing affects everything else. That software didn’t exist before; nobody had built it for physical infrastructure. So one part of the operations of building — where software can come in and understand all the nuances and dependencies of putting something up.

The other is the operations of the mine itself. And so if you’re moving things around, and you don’t have the drivers to drive the trucks, this company, Mariana Minerals, uses autonomous like, hauling vehicles to move things back and forth. They use autonomous extraction, autonomous drilling, and AI helps with the discovery of different deposits and where to drill. Throughout the entire value chain, there are little places where you can continuously find more margin, more yield, more improvements, which makes the economics of the whole operation much better.

CB: I saw you also invested in, I think it was a lithium processing company — or was it extraction?

MV: It’s the same company.

CB: Is that primarily happening in the US? The extraction?

MV: Yeah, all their other current projects are in the US. They’re refining lithium from wastewater in East Texas.

CB: Last month you closed your first fund. Was it $50 million?

MV: $52 million is the official number, but I’m saying $50 because it’s a little bit rounder, easier to understand. I technically closed it in December, but announced it last month.

CB: What goes into raising your first fund as a venture founder?

MV: A lot of meetings, way more meetings than you ever expect or want to have. A lot of “kissing frogs,” is sometimes what people will say. It’s like figuring out which LPs (investors in funds) actually want to invest in what you are doing, and that’s a long process. You get a few early believers, and then you can start investing some of that money, and that helps you build a track record to then go out and get more and more LPs. It’s like a fundraise for a company, just much longer. You need a lot more yeses in a fund than in a venture round.

CB: How do you make sure you’re in alignment with your LPs on your investment vision and capital allocation in general?

MV: The portfolio construction, the pitch thesis — it’s all me. You have to find LPs that want to believe in the same thing. I have found that it has to be driven by me. I cannot let LPs wag the dog, otherwise you lose what makes it special, which is having some kind of unique insight and access and ability to get into deals you think are going to be great. The point of the fund is that the fund manager makes those decisions. LPs might say “Oh, I wouldn’t have expected that to be interesting,” and that’s exactly why they’re betting on the fund.

For example, Anduril was a very controversial investment at the seed stage for many fund managers. Even at one of the funds that invested, the LPs were asking, “Why did you do that? You shouldn’t invest in defense. That’s a terrible category,” and that fund manager had say, “I believe in this company.” Now, of course, everyone says they knew all along it was going to be great. But the magic of venture is you see something before the market sees it, and you see something before other people do. You want LPs to understand that. That’s why they’re betting on you.

CB: What are the most exciting opportunities in energy and nuclear at the moment?

MV: I think we’re finally going to see the nuclear renaissance come to life this year. July 4 is a big milestone date for nuclear. The Trump administration signed an executive order trying to have at least three new nuclear reactors go critical by July 4 — America’s 250th anniversary. And there’s actually four in contention right now. Because of this push for nuclear, it’s also opened up this whole supply chain for the nuclear market. There’s a couple of new uranium enrichment companies. There’s General Matter, there’s Standard Nuclear. New companies are being formed around uranium mining and discovery, finding new pockets of uranium. This whole ecosystem is growing.

Nuclear fission is not new technology. We’ve been doing it since the ‘60s, and it’s safer than the general public would understand — even safer now because of advancements in the way fuel gets processed. There’s this thing called TRISO, which is extremely safe fuel. It’s kind of expensive, but it’s meltdown proof. It’s like little nuclear beams that go into the reactor. It’s baseload, so it’s clean, continuous energy — just turn it on. It works. 10% of the country right now is powered by nuclear, and I hope that number goes up significantly as we turn on more reactors.

In general, we’re seeing a wave of new energy innovation beyond nuclear. Solar is still doing great. Battery development has gotten way better in terms of battery density and the power you can get out of them, and the cost is now at a point where you can almost have baseload energy with just solar and batteries. Data centers, obviously, are pulling the energy market forward in many ways. We’re due for an upgrade to all of our energy systems, so I’m very excited about that category, too.

CB: What do you think are the opportunities in space?

MV: The main markets in space are either defense-related or communications-related. Obviously the government is spending a lot of money in space. I think the new Space Force budget just came out — it was around a 70% increase from last year, or something high. Don’t quote me on that number, but it’s something very big. As we get more and more satellites in space, new ecosystems will form around how to manage all these satellites, how to move them around. Starlink is the major example on the comms side. But many other companies are putting up their own constellations. I think we’ll see more infrastructure-layer companies come out to manage this whole space networking problem. Ground stations will need to be modernized to help manage all the information coming down from space. I think it would be good to have more than one launch provider. There’s a couple companies that are very close to being able to do more regular launches, but obviously SpaceX is pretty dominant.

CB: Having launched Pax Ventures, what are you looking to emulate from Andreessen Horowitz, and where are you looking to take a more novel approach?

MV: Andreessen Horowitz has a lot of platform teams and can provide a lot of horsepower for companies. Those platform teams can sometimes be too much horsepower, or not timed right for early-stage companies, which need a different set of things. Sometimes the companies I meet are figuring out who to use as their law firm. They’re figuring out how to set up their internal HR systems. They might need a deck designer ahead of their first institutional round. They need their first real hires. They’re hiring advisors. I love that stage, and want to have the right ecosystem around me to support founders dealing with zero-to-one problems. From there, I want to help them raise those next rounds of capital from the multi-stage funds, who will then pile on the resources that are more stage-appropriate for companies as they’re scaling. I want to be very helpful — still be very hands-on and high-touch — but really focus on the needs of companies at the early stages, which are always different and unique.

This interview has been lightly edited for length and clarity