I would agree that it used to be more of a challenge than it is today. For what it’s worth, I worked at a defense contractor and have advised / invested in defense startups.

The government is much more open to it today than ever before. Is it still hard? Yes. Does it require funding? Yes.

But unlike before, it’s much easier today.

I'm aware of a relative lessening of cultural aversion in the bay area of having anything to do with the DoD, but what of substance has changed on the gov side, really?

I'm aware of DIU and of greater outreach efforts to the bay area. I'm aware of a greater rhetorical focus within DoD leadership on taking advantage of Silicon Valley's tech expertise.

But I'm not aware of any substantive change to DoD acquisition law to address the fundamental incompatibility in funding models between DoD's traditional contractor base and bay area startups. The significant lag time to award contracts. The risk-aversion for the DoD where civil servants face political and, in some cases, legal liability for granting funding for projects that don't pan out.

Has the DoD's risk tolerance for investments changed recently? As in - accepting the possibility that some investments may not pan out if it means there's a good chance that other investments bear fruit.

Last I checked a few years ago, outreach to the bay area startups has been primarily using the DoD's equivalent of change found in the couch. A rounding error of DoD's overall available funding.