In-Q-Tel names new chief executive

In-Q-Tel, the CIA’s venture capital arm, yesterday announced that it had hired Christopher Darby as its new chief executive. He replaces Amit Yoran, who resigned in April after only four months on the job. Until recently, Darby was general manager of an Intel division created out of Sarvega, a software company which Darby headed until Intel bought it. He is also the former head of of @stake (now owned by Symantec), and Interpath Communications (now a part of US Internetworking). Like Yoran, his background is squarely in cybersecurity.

Question: Why does In-Q-Tel have such a hard time holding on to executives? Mark Frantz, chief of In-Q-Tel’s investments, resigned last month also after a short tenure, saying he would join equity fund RedShift Ventures. One answer comes from Intelligence Online: “The company’s problem in retaining executives who have worked with major venture capital concerns stems from a real gap between the firm and the rest of the sector: In-Q-Tel makes targeted investments for what are very small sums by the industry’s standards.”

Darby seems to agree. “I’m an operator at heart,” Darby told the Washington Post. “I’ve been hired over the years to nurture and build companies.”

-read more in David S. Hilzenrath’s Washington Post report

[MICHAEL: BLUE BOX FOR BELOW]

As we have reported recently, In-Q-Tel has invested in at least eighty companies during the past six years, typically providing between $1 million and $3 million. Its stated mission is not only to nurture technologies for government use, but also to look for commercial counterparts to the intelligence community’s enterprise challenges. Specific areas of interest include software for search and categorization, translation and simulation, and wireless, security, semiconductor, and nanotechnology infrastructure. Additionally, In-Q-Tel invests in biotechnology, power, and sensor technologies.

The CIA, FBI, and Defense Intelligence Agency (DIA) will likely commit about $65 million this year to In-Q-Tel. All of In-Q-Tel’s funding comes from money appropriated by Congress to the CIA, FBI, and DIA. In-Q-Tel has sixty-four employees, and they are required to contribute 10 percent of their total compensation to a fund which invests in each company in the portfolio. Numbers are not available for how much In-Q-Tel has made on its investments, but people in the organization say the firm’s cumulative rate of return since making its first investments in 2000 has been 26 percent, better than the average of the venture industry average. To date, for every dollar the government has invested through In-Q-Tel, private-sector investors have spent about $9, the company says.

-read more at In-Q-Tel Website; read about some of the companies in which In-Q-Tel has invested at the Web sites of Endeca Technologies | Keyhole Corp | Language Weaver