Goodbye to a Once-Trusty Friend


The sun is shining, geopolitical diplomacy is failing and the Big Dig debacle is playing havoc with my Framingham-to-South Boston commute. In other words, it’s time for some Friday Feedback. 

First up were responses to Thursday’s note about In-Q-Tel, in which I suggested that organizational troubles have, at least partially, caused three high-profile defections in less than one year. Wilson asks: “I’m just guessing that the troubles have been related to compensation, since there is no way that government employees can make traditional VC salaries. It’s kind of like why so many public pension fund managers go to private firms.” Good try Wilson, but no. In-Q-Tel is structured as an independent nonprofit, which means that it can actually pay non-civil servant wages. Founding CEO Gilman Louie, for example, made nearly $800,000 in total annual compensation, according to In-Q-Tel tax returns for 2004. 

Casey: “Even if In-Q-Tel has experienced lots of top management turnover, it still doesn’t seem possible to determine whether or not the program is succeeding. The real test is whether the technologies are significantly benefiting the CIA, and that would be impossible to measure without reams of classified information. Got any access to that?” No Casey, but I’ll even go one step further and actually assume that In-Q-Tel has been beneficial to the national intelligence agencies that serve as its limited partners (it’s not just the CIA anymore). But the turnover and its drivers – including conflicts of interest between In-Q-Tel management and In-Q-Tel trustees (who have final investment decision-making power) – have precluded it from being as successful as it should be. 

I’ve got more in Monday’s print edition of PE Week, and my colleague Alex Haislip adds that you shouldn’t be surprised if former In-Q-Tel CEO Amit Yoran ends up with Mark Frantz at RedShift Ventures. 

*** Greg responds to Paul Kedrosky’s guest column, in which he suggested that there are no best practices in venture capital: “I couldn’t agree more…There are as many different styles for being successful in the venture business as there are successful venture capitalists. There are legendary a**holes who have done quite well, legendary glad-handers who have also done well, the occassional whiz-kid and even an aw-shucks guy or two. I would argue that not a single spreadsheet-jockey has ever been successful over the long-haul, but that’s another discussion. What all the VCs who have been successful over an extended period have in common is a good gut and some Teflon coating that keeps them from getting jaded. They maintain the capacity to fall in love with new deals, people or technology — even after having had their heart broken a time or two. 

*** Christopher disagrees with my assertion that New Enterprise Associates’ $2.5 billion fund is the largest VC fund ever raised: “Correct me if I am wrong, but I believe that Oak Investment Partners recently closed a $2.56 billion fund, which would be the largest fund ever raised.” No correction needed for you Chris, but it seems I could use one. 

*** Answer to yesterday’s quiz: Jack Harrington of Advanced Technology Ventures. 

*** Finally there is Mike, who asks: “How’s the Pontiac doing?” It is perhaps the most common reader question, and usually is how people greet me at industry events (yup, more often than asking how I myself am doing). For the first time, however, I cannot provide an answer. 

It is my displeasure to inform you that the Once-Trusty Pontiac was traded in two weeks ago, as part of my wife’s purchase of a Toyota Prius (I get a hand-me-down VW). It garnered a very generous $500, and I assume that its working parts (all five of them) are being sold at a scrap-yard near Danvers, Massachusetts. This was not a decision I made lightly, and I have not yet gotten used to driving an automobile whose dashboard lights go on without first being hit with a closed fist. Quite remarkable technology. 

Anyway, I’m no good at eulogies, so let me just leave it at this: It was the best of (cheap) cars, and then it was the worst of (most) cars. And I loved it all the while…