In-Q-Tel Overview
- In-Q-Tel (In-Q-Tel or IQT) is a not-for-profit venture capital firm that accelerates the development and delivery of cutting-edge technology to the U.S. Intelligence Community (IC) and U.S. Government (USG).
- In-Q-Tel was created by the CIA 20 years ago to source innovation from the startup community and guide those technologies to address problems of national intelligence.
- In-Q-Tel invests in five key areas: cybersecurity, AI enablement, data analytics, autonomy, and human performance.
- In-Q-Tel has a deep technical bench of 40 subject matter experts, a program management team, a systems engineering team, and lawyers and accountants.
- The total number of employees at In-Q-Tel is approximately 180 people.
Investment Strategy
- In-Q-Tel starts with equity investments to get involved early, influence product development, and shape the product for their partner base.
- They also engage in adaptation projects, which are more complicated and can involve multiple agencies.
- In-Q-Tel typically makes 75 investments per year, with 30 equity-only investments and 30 adaptation projects in the United States, and 10 to 15 international deals outside the US.
- In-Q-Tel takes a board seat in every deal to have a deeper understanding of the company and influence outcomes.
- In-Q-Tel believes that dual-use companies, which have commercial success and can be adapted for government use, offer the primary focus and opportunity for investment, rather than defense-first companies.
Success Factors
- The best deals often involve founders who are open to pivoting and listening to market signals, while the worst deals result from arrogance or a failure to adapt to market trends.
- Successful dual-use founders are open to working with the government, willing to make long-term investments, and understand the unique characteristics of the defense market.
- In-Q-Tel measures success through quantitative and qualitative criteria, with a focus on pilots, adoptions, and mission impact.
- In-Q-Tel's return on investment is in the top quartile or decile, due to the signal they receive from their partners and their focus on helping them succeed.
Role in the Government
- In-Q-Tel's expertise lies in understanding how to navigate the opaque government market, particularly within the 17 intelligence communities inside the Department of Defense and the CIA.
- In-Q-Tel provides startups with insights into these agencies and is a valuable resource for startups looking to work with the US government and intelligence communities.
- The CIA's venture capital (VC) model provides them with insights and strategic partnerships that traditional grant funding cannot.
- The VC model allows the CIA to be a strategic partner and shape technology development, rather than simply buying and selling products.
- The CIA coaches companies in its portfolio on protecting their intellectual property and markets from foreign intelligence services and foreign ownership, control, and influence (FOCI).
Notable Investments
- Anderol, an integrator company, was supported by In-Q-Tel from its seed round and through several adaptation projects.
- GitLab, a code repository management company, was introduced to the government by In-Q-Tel and helped adapt its product for government use, leading to significant growth and market dominance.
Key People
- Gilman Louie, Founder, In-Q-Tel
- Bill Perry, Founder, In-Q-Tel
