The CIA’s Venture-Capital Firm, Like Its Sponsor, Operates in the Shadows

The author seems to want to unearth some scandal about conflicts of interest, but there's not much here. The final quote of the article pretty much nails it.

“On the one hand, if you wanted really pristine independence, it means you are going to need people who don’t have commercial ties to the industry,” Mr. Gilson said. “On the other hand, if you have people without any commercial ties to the industry, they are not much use.”

If there were no conflicts of interest at all, then we'd be discussing an article about how horribly In-Q-Tel's investments performed, because they were made by bureaucrats in D.C. who had no idea how startups worked.

In-Q-Tel is pretty explicit about their mission: to support the development of private sector technologies that are of immediate use (within 36 months) to their IC customers. Their investments are sometimes public and they invest in pretty much what you'd expect: D-Wave, Facebook, Keyhole. Even their name is taken straight out of the James Bond tech supplier branch/agent Q.

Nor do they have even particularly critical national security technology. In-Q-Tel probably has less dark tech knowledge than your average building at NBP.

One of my startups was contacted by one of their employees (it's almost always an employee, not the org directly), and they really just facilitated our data analysis processes, and made some connections. It never got to the stage where we accepted any money, and it was a lot less creepy than some of the government contractors cough Mitre cough.

Disclaimer: I have not, do not, and will not work on mass surveillance technology.

This article makes it sound secretive and corrupt, but really this is a surprising amount of transparency compared to other drug cartels.

Whether I like CIA or not, In-Q-Tel is one of their best achievements. The VC model in private sector had long been making better tech more cheaply and with faster improvements. There was also lots of overlap between enterprise and CIA needs. Funding dual-use tech through private sector is already win/win at this point. That revenue from sales to private sector could reduce taxpayer burden on any given tech is another win. Even if there was corruption, it's still better than most US Govt actions because they produced useful stuff that actually benefited Americans in some way.

Search for " we are all intelligence officers now" transcript by Dan Geer, CISO of the company, who refuses to get a clearance.

Fascinating insights.

Most VCs put their own people on the boards of companies they invest in, and then continue to invest in those companies. Doesn't this imply that the "shares a board member" conflict of interest described is either rampant in the industry or not actually a conflict of interest?

Databricks is one the companies that raised money from In-Q-Tel. Given that there are likely to be multiple Turing award winners from that company, I'd say its money well spent.

Some on this thread are saying it's very common for VC trustees to be closely involved in the businesses they fund. But normal VCs must sink or swim as private businesses. In-Q-Tel is a non-profit, kept afloat by the taxpayers.

This setup can easly be a nice channel for powerful people to funnel public money their own way. For one thing, if In-Q-Tel has close links with the CIA, they can steer contracts towards favoured companies.

Even without that, trustees can funnel VC money into businesses and then funnel it out to their own selves. When the business fails, they shrug. Failures happen.

That couldh appen in the private sector too. But even if In-Q-Tel keeps losing money in total, the trustees (who just made nice personal profits) can also shrug and say "this was never a for-profit thing anyway".

MongoDB and Apigee are on their list of investments that are known.

I'm quite surprised the article went into that much detail without mentioning Palantir.

I suppose it would be a scandal if they tried to hide who they were.

It's In-Q-Tel, not Q-Tel. I actually interviewed there a few years back. Very cool company.

We're missing the "In" on "In" Q Tel in the title.

And I have to add, IQT serves a ton of govt agencies, not just the CIA.

The title is misspelled; it's In-Q-Tel, not Q-Tel.

I hope someone knowledgable will help me here.

Do I get this right: US taxpayers are giving their hard earned dollars so that a government agency CIA can take it and, throu their venture capital firm (!), invest it into something that might, but also might not, work?

Is this actually fiscally responsible? Is it in the job description of an intelligence agency to be a VC fund, not with private money, but with the money of the shrinking US middle class?