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Justin Hibbard
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January 28, 2005

Men In Black

Justin Hibbard

If you're the kind of tech nerd who loves James Bond gadgets, forget the Consumer Electronics Show. For you, fellow geek, the best confab of the year happened this week in Silicon Valley, and attendance was by invitation only. We're talking about the 2005 In-Q-Tel CEO Summit, which was hosted by the CIA's VC arm, In-Q-Tel. That's right, the CIA has a VC arm, which invests in emerging technologies that are useful to the U.S. intelligence community. (The Q in In-Q-Tel refers to the scientist who supplies James Bond with gadgets in the movies.) Tim Oren, a VC at the Pacifica Fund, attended and posted this report.

Not surprisingly, natural-language processing software with an Arabic twist featured largely among the CIA's interests. Oren reports that the agency is pushing collaboration between Arabic-language software specialists NovoDynamics and Language Weaver (who knew these companies existed?). Expect to see some M&A action in that field.

Shortly after 9/11, I interviewed In-Q-Tel's CEO, Gilman Louie. He said one of the firm's challenges is finding startups with technology that appeals not only to the intelligence community but also to businesses. Its portfolio companies can't flourish by selling only to one or two government agencies. That's one reason why In-Q-Tel always invests alongside private-sector VC firms, which have an interest in seeing startups grow by selling to lots of corporate customers. In-Q-Tel seldom, if ever, puts up the largest portion of money in a financing round. Typically, it invests small amounts to avoid becoming a government-subsidized competitor to private VCs.

Apparently, CIA spooks have a sense of humor, too: registration materials at the conference included a spy pen.

02:30 PM

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