Why Commonweal Ventures Bets That Government Is a Founder's Best Ally, Not Its Biggest Obstacle

Nate Loewentheil built Commonweal Ventures on a contrarian premise: founders tackling America's biggest challenges in defense, energy, and healthcare succeed not by avoiding government, but by partnering with it. A former Obama White House advisor turned early-stage investor, Loewentheil has spent the past several years building a firm, and a community, around that idea.

The Core Bet: Government as Partner, Not Obstacle

Commonweal is an early-stage venture firm focused exclusively on pre-seed and seed investing, backing founders working in markets like defense and national security, energy, and healthcare. What sets the firm apart is not the sectors themselves but its posture toward government.

We don't see the government as an obstacle. We view government as a potential partner.

That distinction runs through everything Commonweal does. The firm pairs venture investors with roughly 70 former government officials, including former Trump White House advisors, Pentagon officials, former cabinet secretaries, and big-city mayors, all serving as advisors to the portfolio. If a founder understands what the government cares about and is tackling a genuinely big national challenge, there is often a helping hand to be found in the public sector, and Commonweal's job is to help find and grasp it.

The stakes feel higher given the geopolitical moment. A period of intense U.S.-China competition makes it nearly impossible to separate economic security from national security, and technology and AI now sit at the center of that debate. The government, understandably, cares deeply about what happens in the tech sector, which is exactly why understanding the government's priorities makes for a better investor and a better founder.

From the White House to the Cap Table

Loewentheil started investing in early-stage technology companies about 15 years ago, backing companies like Palantir and Roivant, while building a parallel career in public service. He spent three and a half years in the Obama White House at the National Economic Council, advising the president on emerging technology. It was there, sitting across the table from FAA officials and representatives from Google, Uber, and Amazon during a federal rulemaking on commercial drones, that he saw firsthand how deeply government shapes technology markets from the inside.

That experience became the founding insight behind Commonweal Ventures, launched in 2021. Alongside investing, Loewentheil has founded three national nonprofit organizations, taught at Yale on the history of technology, written for The New York Times and The Washington Post, edited a book, and ran for public office. Today, he devotes all of his time to Commonweal.

Three Ways Government Shapes a Market

The government's role in the economy breaks down into three distinct categories, each requiring a different playbook.

• Category 1: Government as the sole buyer.
  • Markets where the government is essentially the only customer. Example: defense, e.g., weapons systems, tanks, fighter jets. There is no real private-sector demand to speak of; if the government isn't buying, the market doesn't exist.
• Category 2: Government as market administrator.
  • Markets where the government runs and effectively defines the core program, but a private sector still operates alongside it. Example: disability insurance. The government isn't the only actor, but it sets the terms everyone else plays within.
• Category 3: Government as regulator and market participant. 
  • Markets where the government doesn't control the market but deeply shapes it. Example: healthcare, where government is both a major market participant through Medicare and Medicaid, whose actions shape overall market conditions and rates, and regulator, controlling drug approvals and medical device clearances.

The throughline: as you move from Category 1 to Category 3, the government's role shifts from "customer" to "landlord" to "referee," but in every case, a founder ignoring the government's role in that market is ignoring the single biggest force shaping it.

Commonweal looks for founders building in any of these three lanes, whether that means selling software directly to the Pentagon or to hospitals that inevitably engage with local, state, and federal agencies.

Reading Government Correctly

Government's core function is balancing competing interests across the public it serves, and that constraint produces behavior founders often misread as slowness or dysfunction. The drone policy work is instructive here: airline pilots, medical helicopter operators, and companies hoping to deliver groceries by air all had legitimate, conflicting priorities that regulators had to weigh simultaneously.

Not everyone is going to win on every policy, but what is the policy that can best advance shared interests?

Tech companies and governments are allowed to fail very differently. An early-stage company that loses a customer can simply iterate and try again; a government agency that fails a single constituent risks becoming a headline. That asymmetry is exactly why governments are structurally more conservative than entrepreneurs, and why that conservatism is often appropriate given their role. Education runs in both directions: entrepreneurs can learn from the government's understanding of scale and national stakes, while the government can learn from entrepreneurs about taking calculated risks and adopting new technology faster.

How Commonweal Actually Helps Founders

The firm's value proposition goes beyond capital. Its advisory network exists to make introductions long before a sales process begins, connecting founders to police chiefs, state agriculture secretaries, or federal agency officials to understand priorities and pain points. From there, Commonweal helps portfolio companies navigate the slower relationship-building process government buyers typically require, and advises on the unconventional paths agencies use to procure new technology, from non-dilutive grants through the Department of Energy or Pentagon to sole-source contracts. Commonweal is a hands-on investor, typically leading or co-leading rounds and taking board seats.

Betting Early, Building a Fund

Commonweal's focus on pre-seed and seed stages is deliberate. The most consequential decisions about a company's strategy and market position get made very early, so understanding government's priorities from day one meaningfully improves a founder's odds. There is a practical dimension too: later-stage companies can typically afford to hire their own government affairs expertise, while pre-seed and seed founders usually cannot, which is exactly where Commonweal's network delivers the most leverage.

The fund itself has grown quickly. Commonweal's first fund backed 21 portfolio companies. Its second fund has closed five deals, with a sixth expected shortly, and the firm typically makes five to six new investments per year through its main vehicle. Its limited partners span institutions, high-net-worth families, former tech entrepreneurs, and financial and industrial leaders who, despite holding a wide range of political views, share one belief.

All of them believe at some level that the government plays an important role in technology markets.

The single biggest lesson from Fund I, looking back, was discipline: stick to the thesis of investing in companies that can meaningfully partner with the public sector, whether the government acts as buyer, market-maker, or regulator. That focus, more than any single deal, is what he credits for the firm's early track record.

When evaluating portfolio company progress, revenue gets weighed differently depending on the business. Complex software, hardware, or marketplace companies get more runway before revenue becomes the primary signal, while lighter-touch service businesses need to show traction quickly. Team quality and customer satisfaction round out the evaluation framework. Success for the firm ultimately comes down to whether the fund delivers strong returns to its investors. Nate believes that the path to generational outcomes runs through tackling the country's biggest challenges.

Picking Winners, Avoiding the Common Trap

Commonweal evaluates opportunities much like any other venture firm would, weighing three factors above all else. First and most important is the founder: intelligence, hustle, and endurance. Second is market size, with founders pushed to move past vague claims about total addressable market and articulate specifically which slice they can realistically win. Third is the underlying business logic, from unit economics to customer acquisition costs to a credible path toward sustainable returns.

The most common mistake founders make in government-adjacent markets is overindexing on the priorities of whoever currently holds power. Building a venture-scale company takes five to seven years, longer than any single presidential term, which makes political fads a poor foundation for a business.

You simply should not build a business that depends on the personal priorities of one elected official. That's just not a sustainable business.

Instead, when it comes to government priorities, Commonweal follows the money, or more specifically, budgets. While political priorities change like the wind, budgets remain far more consistent year over year.

The other important lesson in understanding government is to avoid painting with a broad brush. Government agencies are not monolithically slow or bureaucratic, and it's necessary to pinpoint and distinguish what a given agency or official cares about and why.

Where AI Meets Government

There is enormous white space at the intersection of artificial intelligence and the public sector. The government is the largest consumer of unstructured data in the country, and citizens routinely struggle to communicate with it effectively. Generative AI can meaningfully improve that communication in both directions, from how agencies gather information to how they deliver services, though government adoption of new technology is inherently slow and the shift is still in its early innings.

Two distinct AI opportunities are worth separating: companies selling AI tools directly to government, where there is strong potential around procurement reform and internal data management, and the broader, thornier question of what role government should play in shaping the AI industry itself, an issue both the Biden and Trump administrations have had to grapple with in real time.

Inside Commonweal's Team, Culture, and Career Advice

Inside Commonweal, two traits matter more than traditional credentials: hustle and creativity. The firm operates with a deliberately decentralized structure, so team members need to execute independently rather than wait for top-down direction. Just as important is the ability to form an original point of view rather than simply following wherever the rest of the venture world is looking.

Hustle and creativity are the two most important things.

That same instinct toward independent thinking shows up when Loewentheil reflects on his own career. Asked what he would prioritize if starting over today, he talks about his experience at age 22 founding a national political organization, which is the kind of scaled, from-scratch building best attempted young, when the cost of failure is lower. His other piece of advice is simple: spend real time experimenting with AI tools, both to stay current and because doing so is genuinely fun and educational.

A Community Built Around the Common Good

Even the firm's name reflects the underlying philosophy. "Commonweal" is an old English word for the commonwealth, or the public good, chosen deliberately on a bet that its unfamiliarity would prompt people to ask what it means, opening the door to explain the firm's entire thesis.

I'm a big believer in building community, and I think Commonweal reflects that. It's a group of like-minded people who care about technology and care about the government and care about the common good.

That instinct toward shared purpose runs through nearly everything Loewentheil described, from nonprofits to government to teaching to venture capital. "Whatever you're doing, trying to find like-minded people and mobilize them is important and powerful," he said, describing it as the throughline of his career.  

Outside of work, that same appetite for big ideas shows up in his reading habits. He credits the Yale course he taught on the history of technology with shaping his long-term outlook. His biggest takeaway from that research is that every generation believes it is living through history's single most important moment of innovation, a pattern he has come to recognize and resist as an investor, which helps him avoid getting swept up in short-term hype. He points to the book "When Information Came of Age," on eighteenth-century information technology, as a formative influence on how he thinks about the knowledge economy today.

Looking Ahead

Loewentheil sees a narrative that has shifted firmly in his favor since founding Commonweal. Skepticism about government's role in technology markets, once widespread, has given way to a wave of new investors entering what he calls the "AmTech" space, a trend he welcomes.

As AI increasingly reshapes how government serves citizens and how the public sector engages with the private one, Commonweal's early bet on government as a genuine partner, rather than a bureaucratic hurdle, is increasingly well timed. With a growing portfolio, a deepening bench of government advisors, and capital in place, Loewentheil is betting that founders willing to understand Washington, not avoid it, will be the ones who build the next generation of great American companies.