The document proposes creating a new military-industrial complex (MIC) in Ukraine through establishing 200 new businesses in 2-3 years using a venture builder approach. It recommends focusing on creating companies that develop drones, communications systems, weapons/ammunition, missiles, tactical medical supplies, and IT management systems to meet Ukraine's defense needs and make money on international markets. The companies would operate independently using startup best practices to quickly and effectively produce modern military technologies and decentralize production despite war conditions.

1. Program for Creating a New Military-
Industrial Complex (MIC) of Ukraine in
Conditions of War and Sabotage
© 2022 All Rights Reserved. NGO “Tech Institutions”, Ukraine. http://tiukraine.org
E-mail: hello@tiukraine.org

2. Contents
1. The purpose 3
2. From authors 4
3. About authors 5
4. The new ecosystem 6
5. Innovation Principles 7
6. What MIC companies should be created? 8
6. Organization and financing 20
7. How to create MIC companies? (Methodology) 23
8. Limitations 33

3. 1. The Purpose
Ukraine needs a new military-industrial complex industry.
To do this, we need to create 200 new businesses in 2-3 years with a modern management
culture and products, based on the best methodologies and approaches of Venture Builder /
Venture Capital, which will:
- Meet the needs of Ukraine in modern weapons (regardless of any partner), which
makes it impossible to capture Ukraine by russia or any other enemy in the
future;
- Make money on international markets, not subsidize from the budget.
The budget is ~ $2 billion.

4. 2. From Authors
The key innovation of our offer:
Move away from the archaic management of the military-industrial complex and use
the Venture builder / Venture Studio mechanism to create new enterprises, which allows
you to very effectively create enterprises without centralization in the high-tech sphere.
High-tech and venture capital industries now have the best management practices and
technologies that can enable Ukraine to create an effective military-industrial complex in the
face of war and sabotage.

5. 3. About Authors
Vitaliy Goncharuk Victor Sdobnikov
Created and sold the international company
Augmented Pixels, Inc. to chip maker №1 in the
world - Qualcomm in 2021.
Created and sold to the international company
Samsung / Harman an augmented reality company
Apostera for car navigation in 2022.
Reported to the US National Academy of Sciences
on the development of Artificial Intelligence in 2015.
Established the Committee on Artificial Intelligence of
Ukraine in 2019, which developed a Strategy for the
Development of Artificial Intelligence (adopted by the
Cabinet of Ministers in December 2020).
Created and heads the technical committee for
standardization of Artificial Intelligence of Ukraine.
Initiated in 2018 the creation of an AI educational
program at KPI University.
NGO “Tech Institutions” Web: http://tiuktuaine.org E-mail: contact@tiukraine.org
We have been creating new institutions for the technological development of Ukraine since 2014

6. State (relevant state body)
Venture
builder -
Rockets
Venture builder
- Drones
Venture builder
- tactical
medicine
Defence Venture Capital Fund
Consulting Companies
Drone
corp #1
Drone
corp #2
Drone
corp #N
Medical
corp #1
Medical
corp #2
Medical
corp #N
Rocket
corp #1
Rocket
corp #2
Rocket
corp #N
4. The New Ecosystem

7. Innovation Principles
1. Companies creation based on the Venture Builder model;
2. Startup approaches financing and motivating key personnel;
3. “Elon Musk's” approaches to production;
4. Complete decentralization (production, management);
5. Creation of enterprises with only short cycles of organization and production (6, 12 or
18 months);
6. Enterprises operate exclusively as commercial entities with a focus on international
markets (temporarily - on the war);
7. Established enterprises must duplicate and compete with each other;
8. The organization of all processes is such that there will be results in the conditions of
sabotage;
9. State share in enterprises - up to 30%.

8. 5. What companies should be created?

9. Main Principles
1. Focus on creating companies that will deliver products that have already helped
Ukraine survive the first 3 months of the war;
2. Companies can become world leaders;
3. It is necessary to create new companies even if there are analogues in the public
sector. This reduces many risks;
4. The main thing in any company is the entrepreneur and the market. Not a government
official;
5. The maximum term of organization of production is 18 months, and the average is 12
months
6. In the case of high-tech production, initially, the focus is on large-scale assembly with
further deepening

10. Focus
1. Drones and robots;
2. Communication;
3. Weapons and ammunition;
4. Missiles;
5. Ammunition and protection;
6. Tactical medicine;
7. General IT management systems;
8. Consulting and integrator companies.

11. Examples (Retrospective in the Past)
1. If in 2018-2019 the creation of 3 productions ($20m each) of drones was financed, then
in 2022 it would not be necessary to purchase DJI drones, etc.
2. If the creation of 10 ammunition factories had been financed in 2018-2019, there would
not have been such an urgent problem with bulletproof vests, clothing, footwear and
helmets
3. The creation of 2-3 cartridge factories for the necessary types of ammunition in 2020
would save money and speed up logistics
4. If in 2018-2019 the production of Stugna and other anti-tank guided missiles was
financed, today there would be significantly less dependence on the speed of supplies
of Western weapons to perform operational tasks
These productions must be opened today to effectively contain the invasion and save the
lives of soldiers and civilians in 2-3 years.

12. Drones and Robots
Main productions (2-3 new companies per section):
1. Tactical reconnaissance drones to replace DJI with advanced and secure communication
systems;
2. Medium drones for attacks;
3. Ammunition for drones;
4. Drone Information Analytics Systems (Artificial Intelligence);
5. Wheel demining robots;
6. Drone and robot control systems (autonomous guidance, autonomous return, group
management);
7. Detection systems and false targets to mask drone operation at the frontline and beyond;
Important:
1. In production, the focus should first be on assembly, not on the production of all components;
2. Enclosures/fuselages, wheels, motors and other iron are better to buy than to develop yourself;
3. Data format and information exchange systems must be compatible with market standards;

13. Communications
Main productions (1-2 in each direction):
1. Digital walkie-talkies with secure communication channels;
2. The system of optimal use of satellite terminals in different modes;
3. Standard means of communication - cables, routers;
4. Batteries and generators for autonomous operation;
5. Wrong emitters to provide masking at the frontline;
6. Emitter detection systems (watches, telephones, drones, etc.);
Important:
● Standardize communication tools;
● Compile unified lists for departments;
● Ensure import in the first stages, then import components for large-scale assembly before
setting up own production;

14. Weapons and Ammunition
Main productions (2-3 new companies per section):
1. Small arms and light weapons according to the NATO standards;
2. Ammunition for small arms and light weapons;
3. Ammunition for drones with homing elements;
4. Mines and explosives;
Important:
1. All products must comply with NATO standards;
2. In the beginning, it is possible to create local joint ventures or license Western counterparts;
3. At the first stage of creating shells with homing elements, it is possible to retrofit existing
ones;
4. Active development of homing technologies (thermal and laser guidance, support of
automatic mode and operator mode);

15. Missiles
Main productions (2-3 new companies per section):
1. Stinger and NLAW analogues;
2. Missiles for MLRS;
3. Missiles for missile artillery;
4. Medium-range missiles with the ability to expand the engine;
5. Anti-ship missiles;
6. Missiles for air defense systems;
Important:
1. Focus on homing;
2. Decentralization of production (different places);
3. Start with an assembly based on imported components;
4. Use products of existing industries (spin-off and supply of components/control systems/fuel).

16. Ammunition and Protection
Main productions (5-10 enterprises in total):
1. Uniform, underwear and shoes, different seasons;
2. Body armour based on high-quality Molle plate carriers ;
3. Helmets;
4. Unloading vests;
5. Protection of knees, elbows, gloves;
6. Standard tactical body kit;
7. Means that provide a tactical advantage: thermal imagers, thermal sights, night vision, optics;
Important:
1. For optics and thermal imagers - direct deliveries from world leaders;
2. Prioritization of production based on unified lists of priority ammunition;

17. Tactical Medicine
It is necessary to create 2-3 companies that can collect first aid kits and buy components on the best terms
and few service companies for the training personal and tactical medics:
1. Compilation of lists of internal and external suppliers;
2. Product testing with the involvement of medics;
3. Conducting tenders and agreements with suppliers;
4. Establishment of the procedure of additional involvement and change of suppliers;
5. Establish continuous quality control with improvement;
Important:
1. Establish the supply of components of individual tactical first aid kits and extended backpacks for field
medics;
2. Tailoring of convenient pouches and backpacks to organize in Ukraine on the basis of existing
enterprises;
3. Cooperation with existing centers of tactical medicine and volunteers;
4. Estimation of the required number and optimal composition of individual and general first aid kits;

18. General IT Management Systems
Main productions (2-3 new companies per section):
1. Messaging and other data exchange systems;
2. Satellite data analysis systems;
3. Systems of analysis and verification of military personnel for integrity;
4. Social media data collection and analysis systems;
5. Decentralized storage systems;
Important:
1. United standards for data formats and exchange;
2. Network system, where each module or agent can share information with others;
3. No or simple duplication of the center in any system;
4. Data encryption when exchanging known algorithms;
5. Messaging systems should be based on open jabber platforms;
6. Lack of servers or the possibility of times and clouds;
7. Duplication of clouds;
8. P2P networks;

19. Consulting and Integrator Companies
Main consulting companies and integrators (2-3 new companies per section):
1. Management consulting;
2. Accounting and audit;
3. Staff training;
4. Recruitment companies;
5. IT systems;
6. Tactical medicine training for fighters, tactical medics and instructors;
Important:
1. All companies must work according to the generally accepted methodologies and standards;
2. Big4 needs to be involved in the creation of the methodological base;
3. It is possible to create companies on the basis of existing universities;

20. 6. Organization and financing

21. Legal Component
Legally, companies must be formed as limited liability companies or joint-stock companies.
State control and reporting should be minimal and as market-oriented as possible.
The state (Venture Studio + Defense Venture Fund) should receive no more than 30% in
companies for funding of $10-20 million.
It is necessary to provide the scheme for gradual redemption of state shares in the capital of
companies.

22. Financing
The best financing model:
Venture Builder (2-3) + Defense Venture Fund.
Venture Builder Funds creates and funds each project up to $ 1 million.
Defense Venture Fund - from 1 to 20 million together with private funds.
Sources of financing Venture Builders + Defense Venture Fund come from state budget and
reconstruction programs of Ukraine + NATO.
Mechanism of financing turnover and production is made through state banks.

23. 7. How to create MIC companies? (Methodology)

24. Who and How Creates new MIC Companies?
1. The state structure (?) creates Defense Venture Builders (2-3 companies with different
specializations) and Defense Venture Capital Fund
Defense Venture Builders is a structure that "assembles like a conveyor belt" the initial commands
of companies and/or makes spin-offs from existing companies.
The Defense Venture Capital Fund is a fund that finances companies.
1. Defense Venture Builders, with the help of consulting companies, creates new military-
industrial complex companies and finances them directly in the initial stages (up to $ 1
million), then through the Defense Venture Capital Fund ($ 1m- $ 20m) and external
financing (other funds and programs).
2. For companies that need more significant initial investment - copy-paste technologies from
existing enterprises Ukroboronprom

25. Requirements for a Typical Enterprise
1. A typical system of reporting, accounting;
2. Typical IT management systems;
3. Transparent and standardized planning and reporting system (GMP);
4. Introduce frequent small audits instead of cumbersome certification and assessment
processes;
5. Integration with efficient logistics systems;
6. Interaction with direct participants in hostilities and medics on products;

26. Where do we get entrepreneurs?
Possible sources for finding entrepreneurs (directors) and key personnel:
1. Ukrobornprom staff;
2. Entrepreneurs who have lost their business;
3. Re-profiling of existing startups;
4. Entrepreneurs from abroad from similar companies;
5. Volunteers on relevant initiatives.

27. Where do we get technology?
1. Spin-off (individual production or licensing for individual companies) or "copy-
paste" from Ukroboronprom enterprises;
2. Large-node assembly and only then the actual R&D;
3. Establishment of joint ventures with foreign companies;
4. Classic startup models for service and IT companies (development from
scratch);

28. Personnel Policy
1. Focus on motivation and building a system of professional development without
separation from production;
2. Recruitment processes are the same, work in all companies, and best practices that
have worked in individual companies are used to improve standard processes;
3. First of all - we involve existing specialists of the corresponding qualification, we drag
professionals from existing or recently closed plants/productions;
4. Institute of Mentoring:
● The system of advanced training/entry into the position is built by qualified employees
(mentors) for an additional fee
● Payment of a mentor for each newly qualified employee who has been trained and
successfully passed the probation period
1. We attract volunteers who have certain knowledge and skills and a high level of
motivation.

29. Motivation System
1. Director / Entrepreneur - business share and options;
1. Investors - shares in share capital;
1. Key personnel - market salaries + options;
1. Line staff - market salaries + c + social package;

30. Decentralization of Production
The following rules must be observed when building enterprises:
1. Duplication of critical productions, if possible - in neighbouring friendly states;
2. Production of components at separate small capacities which can be quickly restored or
replaced;
3. Availability of 2-3 alternative suppliers;
4. Orientation according to well-known standards of components;
5. The use of small warehouses, separate for components and finished products;
6. Priority on regular shipment of small and medium volumes.

31. Principles of Construction and Integration with Logistics Systems
It is necessary to integrate from the very beginning with the existing logistics systems - physical infrastructure,
warehouses and centralized tracking system of the Armed Forces:
1. Enterprises importing heavy weapons and ammunition should take into account the existing railway
infrastructure, including transhipment terminals from European tracks
2. All companies receive a plan for the relevant goods and integrate it with the planning and tracking system,
which regularly adds forecasts and actual data on shipment
3. It is necessary to motivate existing enterprises (state of emergency, etc.) for delivery to recipients -
insurance of drivers and cars, provision of light armoured cars
4. Integration with the query system to assess the need and prioritize the provision of units for tasks
performed, rather than the number of requests
Construction and equipment of warehouses should take place according to the following rules:
1. It is necessary to create 5-10 separate logistics companies that can work successfully as commercial
structures in peacetime
2. Warehouses should be small and medium in size
3. Construction and re-equipment of warehouses should aim at use as a normal warehouse after de-
escalation and the possibility of rapid refocusing on military needs in case of exacerbation

32. Effective Automation Processes and Tools
Without processes and automation tools it is impossible to produce quality products. At the same time, complete
copying by industry leaders will slow down the creation and launch of production. It will be effective to create a separate
unit in each company, working on the following principles:
1. Defining goals for processes and strategies for their implementation - at the level of the head (the head should
be interested in supporting the processes and see concrete help in achieving the goals of the enterprise)
2. Processes are primarily implemented for efficiency and transparency
3. Maintaining a balance between quality and speed based on common performance indicators for production and
quality
4. Phased implementation plan (each stage brings certain benefits, we do not wait until we develop ideal
processes)
5. Instead of the certification process, audits (quick, easy, regular) are the first steps, and formal certification is
already for export.
6. Focus on automation and reuse (hiring processes in typical enterprises should be standardized)
7. After the introduction of automation tools, they should be reused in other companies
One of the key processes is the process of continuous improvement, which includes:
● Exchange of experience between managers and employees of enterprises
● Building courses by mentors
● Engage the military to get product feedback

33. 8. Limitations

34. Limitations
Objective restrictions:
● Financial - we can’t afford long-term projects for a lot of money. The budget needs to be estimated
and prioritized
● Temporary - weapons are needed now, the maximum planning horizon to get the result is 2 years
● Human capital - the necessary implementation of educational courses and mentoring systems in
production for rapid recruitment and retraining. Focus on management
● Logistics - restrictions on air and sea services during the war, the focus on rail
We avoid and do not spend money on:
● Big long-term projects
● Investments in the construction of premises - instead of renting existing ones
● Investments in industries that require billions in funding and long development times (aircraft,
shipbuilding, etc.) without going into production in 1-2 years
● Invest in something easy and simple to buy and store
● Investing in areas where we cannot become leaders
● New high-tech materials (very risky area)
● Fundamental scientific developments