Question 1: When IQT was created back in 1999 to invest in technology for the national security mission, it was really pioneering the field. What led to its creation?
So if we go back to the origins of the organization, the CIA had a long relationship with big corporate R&D labs in the US, which is where innovation in this country had traditionally occurred. But the agency recognized that innovation was shifting to the many thousands of venture-backed startups in the country and it wanted an organization that could help it understand where new ideas were coming out of that ecosystem and that could influence the way products were developed so that they could be deployed in ways that maximized mission impact. That was the mission given to IQT back in 1999.
Question 2: IQT has become a very successful example of a public-private partnership that helps its many government partners benefit from cutting-edge, dual-use commercial technologies. How did it achieve this?
Trust is the key. To be successful in this mission, we ultimately had to build up trust on all sides of the public-private partnership equation: trust with venture capitalists, trust with entrepreneurs, and trust with government agencies. And we’ve been doing this for nearly 25 years. Leading venture capital firms and their entrepreneurs trust IQT to evaluate companies’ technologies and see if they can help advance the missions of the government agencies we work with. Similarly, those agencies trust us to evaluate things such as whether startups are going to be stable enough and strong enough over time to support multiyear operational decisions and whether there is an opportunity to adapt their technologies for mission impact.
Question 3: Under the leadership of Chris Darby, your predecessor as CEO, IQT also grew into a global investing platform. What was the thinking behind this expansion?
To understand where tech is going around the world, we needed a presence outside the United States. So we launched a partnership with the U.S. government, the UK government, and the Australian government. We’ve opened offices in London, Sydney, Singapore, and Germany. This allows us to access the best technology that can enhance the capabilities of our government partners. It also allows us to develop a strong sense of where technology is going and how adversaries might be using it to project power and influence geopolitical events around the world.
Question 4: The conflict in Ukraine has highlighted the impact of IQT’s work and the importance of dual-use commercial technologies in today’s world. How has it influenced strategic thinking on national security issues?
The Ukraine conflict has been an eye-opening experience in terms of the role commercial technology has played. We are very proud of the fact that over 30 IQT portfolio companies have seen their technologies deployed as part of Western efforts to support Ukraine. Everyone’s learning what the future of warfare looks like, with the role of things such as drones and the role commercial technology plays in areas such as communications, sensing, and cyber activities. Everyone knew the world was heading in this direction, but Ukraine’s conflict with Russia has been the manifestation of this and people are seeing it’s happening at a larger scale—and happening more quickly—than was previously expected.
Question 5: IQT’s work benefits the U.S. economy in addition to supporting national security. Can you talk about that aspect of the organization’s impact?
The Covid-19 pandemic and other events have shown us that when supply chains are controlled to significant degrees by other countries, it’s not a great place to be in when you are in crisis mode. You are now seeing organizations wanting more control over their supply chains, which means keeping more of the activity here. We have invested in over 80 companies to date that have developed and deployed manufacturing capabilities in the U.S. These capabilities are not the same ones as in the past because you’re not going to win against low-cost manufacturers like that. You have to deploy new ways to make things that create incentives to keep manufacturing in the U.S. These 80-plus companies are driving new jobs, but even more significantly they are driving new capabilities that will be incredibly important to the U.S. for the next decade or two.
Question 6: We’ve entered a new era of Great Power competition that’s very different to the Cold War era. What’s the biggest difference in your view?
The U.S. is the strongest nation in the world—both from a military perspective and an economic perspective—because it is the most advanced country in the world when it comes to technology. But for the first time in our history, we have a peer competitor in China that’s attempting to assert leadership in both the economic and national-security realms. To maintain U.S. economic and military leadership, we need to have leadership in technologies that are going to drive future economic success, military capability, and geopolitical influence. Those technologies include autonomous vehicles, cyber, AI, batteries, advanced power, and engineered biology. It’s in our nation’s interest to see American companies and American entrepreneurs emerge as leaders in these and other key areas.
Question 7: You’ve talked about the importance of better aligning the U.S. National Capital Stack in response to this new geopolitical landscape. What is that stack and why does it matter?
When IQT began, there was a lot of VC money going to consumer technology companies in software and service apps that weren’t relevant to the U.S. government. VCs weren’t investing in things like commercial satellites or drones. We’ve seen that shift over time, but there’s still a disconnect here between the two sides of what’s known as the National Capital Stack. On one side, there’s a stack of capital in the U.S. private sector that funds innovation. This includes commercial R&D budgets, early-stage venture, later-stage venture investment, and private equity. It also includes the money that public companies spend on product development. This stack amounts to hundreds of trillions of dollars. On the other side, the U.S. government has its own version of a capital stack that’s the same order of magnitude and includes investment in fundamental R&D, as well as things such as loans, subsidies, tax incentives, and tax breaks.
We need better alignment between these two sides of the U.S. National Capital Stack to support technologies that are in the national interest, both from an economic and national-security perspective. We feel that IQT can play a role here. Over the past 24-plus years, the private sector has come to view our investing activity as a signal of what technologies the U.S. government cares about. And the U.S. government has learned to trust that where we’re investing is a signal of the technologies it should care about. We’re looking at how we can more formally use our investing activities to highlight to both sides where they should be aligning closely against critical areas of technology for the future.
Interested in hearing more? Check out the accompanying podcast, “The Intersection: Executing Innovation on a Mission,” wherever you listen to podcasts!