Former Efficiency Staffers Raised $500 Million in Startups
Founders with government experience are navigating federal contracting rules as they pivot to private-sector growth.
Updated on Oct. 12, 2026 in Startups
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About two dozen former Department of Government Efficiency staffers have transitioned into private-sector startup roles, collectively raising at least $500 million. At least six of these ventures have registered on the federal government contracting portal to seek future business.
Why it matters
Investors are advising these founders to carefully manage potential conflicts of interest as they prepare for possible congressional scrutiny following the upcoming elections. This scrutiny stems from the unique intersection of recent public service and current private business goals.
At least six alumni have registered on the federal contracting portal, joining a cohort of roughly two dozen former staffers leading startups. These ventures have secured at least $500 million in total capital to date.
The players
Gavin Kliger
The former Defense Department chief data officer who transitioned to a founder role at the cybersecurity firm Cathedral.
Elie Mishory
The chief regulatory officer at the sports prediction market Novig, a startup that recently secured regulatory approval.
Novig
A sports prediction market startup that recently received approval from the Commodity Futures Trading Commission.
Cathedral
A cybersecurity firm founded by former government staff that has reached a $1.4 billion valuation.
The details
Founders are leveraging their federal experience to secure executive roles and scale new ventures, such as the cybersecurity firm Cathedral, which attained a $1.4 billion valuation. These firms are registering on the federal government contracting portal while monitoring federal ethics laws, which historically include a two-year restriction period for seeking specific government contracts.
Timeline
1970s: Federal ethics laws were established.
April 2026: Gavin Kliger ended his service as the Defense Department's chief data officer.
May 2026: Gavin Kliger began fundraising for the firm Cathedral.
October 2026: Ongoing transition of staff into the private sector.
Market Landscape
The move from government efficiency work to private startups tests the effectiveness of 1970s federal ethics laws regarding the revolving door. Founders must now balance rapid growth against the precedent of increased regulatory and congressional oversight for firms seeking federal contracts.
Business owners should review their own internal compliance protocols regarding the hiring of former federal employees to ensure they remain within the two-year federal contracting restriction window. Tracking legislative shifts is essential as potential congressional investigations could alter the procurement landscape for all contractors.
The takeaway
The intersection of high-level government experience and private startup growth creates a distinct risk profile for both investors and operators. Monitor upcoming midterm election results, as these often shift the threshold for congressional investigations into federal-to-private industry transitions.
Further reading
For more on the operational challenges facing new ventures, visit Startups.
More information
To review registration requirements and active federal solicitations, visit the federal government contracting portal.
Source note: This article includes information reported by Raw Story.
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Should former government officials be prohibited from seeking contracts for private firms they recently founded?
