VENTURE CAPITALISTS USED to approach defense-related deals with all the enthusiasm a recruit musters for reveille on Parris Island. They didn't want to fool around with security clearances, and they weren't well connected with the defense world. "Venture capital funds didn't even look at companies doing business with the Defense Department," says C. W. Harvey, a special partner in New Enterprise Associates (NEA).

That's not true anymore. With their computer investments faltering, many venture capitalists are looking for better returns in specialty retailing, factory automation, and other fields. Now a few are investing in defense-related companies, too. Some are Vietnam veterans who have acquired M.B.A.s and finance experience and are taking advantage of their military contacts. Others are capitalizing on the Reagan arms buildup, and see a favorable climate ahead for defense-related public offerings. And it doesn't hurt that the Pentagon, in effect, offers working capital to small companies in the form of progress payments on military contracts.

NEA started a defense venture fund, Spectra Enterprise Associates, after discovering that its eight defense-related investments were more successful than any other category. The fund, which is raising up to $25 million, will invest in small defense firms, especially those involved in electronic warfare. During its first nine months of fund-raising, says Harvey, Spectra "went through 66 potential deals without looking for them."

Another new fund, American Advance Ventures, has looked at even more investment opportunities -- at least 430 unsolicited plans in its first 11 months -- and the firm hasn't even closed its financing yet. Unlike Spectra, AAV plans to invest primarily in companies applying military aerospace and electronics technology to commercial markets. One promising area is improved flight instrumentation. "We can put a footprint down in both sectors. A company that we back may very well be selling into the defense side and the commercial side at the same time," says partner Phil Gioia, whose experience includes 10 years as an Army officer, as well as more conventional stints at investment banks and larger venture firms.