Thread by @nimkef

15 Aug 2005

When inventors James MacIntyre and David Scherer founded Visual Sciences Inc. in 2000, doing work for the CIA was not in their plans.

web.archive.org/web/2020110109…

The two developed software to monitor and graphically display patterns in complex info systems. A bank marketing executive using the software could determine which online customers were clicking on links to info about home equity loans, then display info about those customers.

It takes no great leap of imagination to envision a CIA analyst using the software, connected into the right databases, to track terrorist activities. But it took In-Q-Tel to make that leap.

The nonprofit org, funded with about $37M/yr from the CIA, last year made a small investment in Visual Sciences & paid the McLean company a fee to license its software. For Visual Sciences it was a way into the federal sector without the hassles required to compete for contracts

"In-Q-Tel provided a buffer from being a real government contractor," MacIntyre said. "I still don't know how our technology will apply to the CIA."

In the 5yrs since it began active operations, In-Q-Tel's reach and activities have become vast for so small an operation. It has invested in 75+ companies & delivered 100+ technologies to the CIA, most of which otherwise would never have been considered by the intelligence agency

Virtually any U.S. entrepreneur, inventor or research scientist working on ways to analyze data has probably received a phone call from In-Q-Tel or at least been Googled by its staff of technology-watchers.

Born from the CIA's recognition that it wasn't able to acquire all the tech it needed from its own labs and think tanks, In-Q-Tel was engineered with a bundle of contradictions built in.

In-Q-Tel is independent of the CIA, yet answers wholly to it. It is a nonprofit, yet its employees can profit, sometimes handsomely, from its work. It functions in public, but its products are strictly secret.

Over the years, some critics have dismissed In-Q-Tel as a government boondoggle. They have described the firms it invests in ominously as "CIA-backed," as if they were phony companies serving as cover for spy capers.

But in interviews w/ 12+ current & former CIA officials, congressional aides, venture capitalists that worked w/ it and execs who have benefited from it, no one disputed that what began as an experiment in transferring private-sector technology into the CIA is working as intended

The Army, NASA and other intelligence and defense agencies have, or are planning, their own "venture capital" efforts based on the In-Q-Tel model.

"On a scale from one to 10, I would give it an 11," said A.B. "Buzzy" Krongard , the CIA's former No. 3 official and a former investment banker. "It's done so well even Congress is taking credit for it."

"In my view the organization has been far more successful than I dreamed it would be," said Norman R. Augustine , who was recruited in 1998 by Krongard and George J. Tenet, who then was director of central intelligence, to help set up In-Q-Tel.

Augustine, former chief executive of defense giant Lockheed Martin, is an In-Q-Tel trustee. "But my view is also that it's still an unproved experiment."

Judging In-Q-Tel by the standards of conventional venture capital funds, it's too small to rank among the major players, yet its financial returns have been impressive.

Of the $117.8 million in CIA money In-Q-Tel has spent on tech transfer programs since it began, only 14% has been spent on direct equity investments. The rest has gone toward contracts with its portfolio companies to buy licenses and develop tech tailored to specific CIA needs.

Typically, In-Q-Tel spends $500k to $2M on a company with technology of interest to the CIA. But only 15% of that is in form of an equity investment.

Of the 77 companies in which In-Q-Tel has invested directly, 10 have failed. Its internal rate of return -- the standard measurement for VC funds -- on all of its investments is 26%, chief executive Gilman Louie said.

That's a very high return. Industry research shows that most venture funds founded since 1999 are in negative territory. But most of In-Q-Tel's investments haven't been cashed out yet, so returns could still go south.

In-Q-Tel has invested in and worked with:
a gaming developer
a developer of an analyzer for huge volumes of voice recordings
data security firms
a semiconductor maker
a software dev for casinos to track relationships between casino customers and employees
a NLP software dev

A study of In-Q-Tel that Tenet commissioned in 2001 said the org was doing good work but that the tech it discovered weren't being put to good use by the CIA. It said the agency needed "a cultural change that accepts solutions from the 'outside world.' "

Donald M. Kerr , who was named the CIA's deputy director for science and technology that year, said the problem was addressed by his staff of technologists, known inside the agency as the In-Q-Tel Interface Center, or Quick.

Kerr, who last month left the agency to head the National Reconnaissance Center, a spy-satellite agency. "Absent Quick, it would be like people throwing ideas over the transom with no one there to catch them. Quick breaks down the barriers to people using new tech and new things"

21 Sept 2016

The CIA has its own investment capital arm, and it's been pumping money into some of Silicon Valley's most innovative companies for years.

In-Q-Tel invests in companies that can deliver useful tech to the intel community within 36 months.

businessinsider.com/companies-fund…

But since it's structured as an independent, non-profit organization, it's rather unique: It's a VC firm that doesn't really need to make money back for outside investors, and it can tap into the deep pockets of the intelligence "black budget."

Its involvement in a startup is also a stamp-of-approval of sorts, often bringing in more money from other VC firms, to the tune of $11-$15 for every dollar the CIA kicks in. In-Q-Tel typically does not disclose the amount it invests

Here are some of the cutting edge Co.'s the CIA has found useful

Cylance is using AI to analyze and kill malware well before it becomes a problem

CylancePROTECT, is used exclusively in the enterprise for large corporations, banks & government clients.

In-Q-Tel invested in 2016

Orbital Insight analyzes the millions of satellite images being beamed back to Earth to answer all kinds of interesting questions.

Let's say you are a big retailer and you want to get an understanding of how many people are shopping at your stores. One method for figuring this out is to analyze the number of cars in the parking lot — which is one thing Orbital Insights can do.

The satellite analysis can answer other questions as well: What intersections are the busiest at rush hour? Or perhaps, how is China's economy doing?

Orbital Insights has attracted plenty of interest beyond the CIA, which chipped in $5 million in 2016. Around that same time, Google Ventures led an investment round of $15 million.

Cyphy (pronounced Sci Fi) has a tethered drone that can keep a watchful eye from up to 10,000 feet above its base station, or it can help with long distance communications.

The company also has a smaller "pocket flyer" drone that flies through doors and windows, and which fits inside a soldier's cargo pocket.

In-Q-Tel invested in Cyphy in 2015.

BlueLine Grid is giving government agencies the ability to communicate in much the same way startups and media companies are doing, with the popular Slack app.

Called GridTeam, the secure mobile collaboration platform offers messaging, image and file sharing, and instant conference calls for organizations. It's mostly used by law enforcement and first responders to communicate.

In-Q-Tel invested in the firm back in 2015.

Atlas Wearables

Most fitness trackers know what your heart rate is or how many steps you have traveled. The Atlas Wristband knows when you are doing a bicep curl or jumping on a box.

The Austin, Texas-based Atlas Wearables originally launched on Indiegogo in 2014, where it raised more than $600k in funding. Now its fitness tracker is sold in sporting goods stores or on Amazon.

In-Q-Tel invested in Atlas in 2015.

Fuel3d

Fuel3d sells a handheld hardware device called Scanify that can capture detailed, three dimensional scans in less than a tenth of a second.

The tech can be applied to a variety of markets: Full-face capture is being used to build customized eyewear, and crime scene data can be used to build 3d models that can help investigators solve crimes.

In-Q-Tel invested in late 2014.

MindMeld

Backed by Google Ventures and Samsung Ventures, among others, MindMeld offers the tech that allows more than 1,200 companies to put voice commands into their apps.

In-Q-Tel invested in 2014.

SnapDNA

The Silicon Valley startup built a handheld, battery-powered device that can analyze DNA within five minutes, rather than hours or days on expensive machines in a laboratory.

In-Q-Tel invested in SnapDNA in 2012.

Sonitus offers a wireless, two-way communications capability hidden inside the mouth.

Their product goes inside the mouth, giving users incredible clarity even in the noisiest of environments.

In-Q-Tel invested in Sonitus in 2009.

Palantir is one of Silicon Valley's most secretive companies, which can be explained somewhat by its deep relationship with US military and intelligence clients.

Spies are using Palantir's software to link together the huge cache of data gathered by CIA, DHS, NSA, and others.

The military uses it to figure out whether a roadside bomb was built by a specific person. And even detectives with the LAPD are querying it to understand criminal ties.

Palantir has expanded to offer solutions for healthcare and financial firms

In-Q-Tel backed Palantir in 2005

BBN Technologies is somewhat an outlier in this list of a startups, since it was founded in 1948. But it's no less innovative, having been the brains behind the early internet, and the @ sign in email, among other groundbreaking technologies.

BBN, which was acquired by Raytheon in 2009, is a research and development center that has built all kinds of cool gadgets for the military

BBN's "Boomerang" tech tells helicopter and ground vehicle crews if they are being fired at — along with the direction it came from — and its speech recognition tech helps troops to translate foreign languages in the field.

In-Q-Tel invested in BBN in 2004.

Keyhole Inc

Founded in 2001, the Silicon Valley startup revolutionized satellite imagery with 3d maps, allowing users to "fly" over locations. The technology, called EarthViewer, was used by troops in the Iraq War, and in news broadcasts at the time.

Google bought the company in 2004, and subsequently rolled the tech into its popular Google Earth and other mapping products.

In-Q-Tel invested in the firm in 2003.

Basis' Rosette software can look at foreign language in documents and translate it, while also going beyond the basics to identify relationships or determine whether what is written is of positive or negative sentiment.

In-Q-Tel invested in 2004.

Oculis Labs builds products to stop "visual eavesdroppers" on mobile and desktop devices. Instead of privacy screens that come down over a monitor, its PrivateEye and Chameleon software tracks where the user is looking and only displays what's on screen to them.

If the user turns away, the display is masked. And while they are working, someone standing two feet away from the actual user will just see a bunch of gibberish on screen.

In-Q-Tel invested in the firm in 2011.