In-Q-Tel Giving Startups A Handout — And A Hand

from the inside-track dept

In-Q-Tel, the CIA’s nonprofit VC arm, has gotten a lot press over the years as a novel approach to finding (and funding) technology that a federal agency needs. The idea was so popular, other branches of government copied it. As people begin to scrutinize the operation, Business Week revisits the topic with a series that sheds more light on the firm. Turns out that making investments (77 to date) is just the first part of the process. In-Q-Tel also figures out where the technologies might fit in the government and helps companies navigate the Byzantine and insular world of government contracts. Once secured, those contracts give startups the revenue and credibility they need to establish themselves (and perhaps get acquired). Indeed, only 10 companies funded by In-Q-Tel have failed. Of course, there are pitfalls to relying on the feds too heavily for income, as we’ve noted at least once or twice before. One of the Business Week pieces even questions whether government spending is actually rising. But that’s a problem most startups only wish they had. In-Q-Tel’s blessing addresses their primary concern: survival.

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