In-Q-Tel’s Fools’ Scandal
The New York Post’s Chris Byron has been in a lather the past two weeks about the VC firm In-Q-Tel, which is funded by the CIA. From the a:c’s perspective, we get the feeling that Byron doesn’t understand how venture capital operates. The gotcha’s that he purports to expose seem to be standard VC operating principles. Bryon insinuates that there is something off-base about the CIA investing in a VC firm. He must not realize that many of the biggest investors in VC firms are government pensions and not-for-profit educational foundations who often get great returns from their VC investments. Byron also thinks there is something unseemly about In-Q-Tel calling on members of congress to pitch their portfolio companies. Hmmm? Doesn’t everyone try to get Congress to spend money on their projects?
Byron also smells scandal in the fact that In-Q-Tel employees are able to hold and sell shares in their portfolio companies. Again, this is standard practice in venture capital.
Finally, Byron concludes with a sneering swipe that taxpayers are wasting $40M a year on In-Q-Tel. Now, we wouldn’t say that In-Q-Tel has had any major league home-runs, but several of its portfolio companies have been acquired and we suspect that taxpayers are more than likely getting $40M back plus interest. Moreover, the idea behind In-Q-Tel was to invest in longer-term, national security projects that other VCs might not invest in. We usually like Byron’s slash-and-burn takedowns of corrupt companies, but on this one we think he should give it a rest.
Read – Spooky Situation (NY Post)
Read – PENNY STOCK SPIES – CIA FUND INSIDERS LURKED BEHIND THREE SHAKY STOCKS (NY Post)