Navy turns to venture capitalists to speed acquisition
- By Dawn S. Onley
- Aug 19, 2005
The Navy is exploring whether the CIA's model for moving technology quickly to the field would work for them.
Navy officials are discussing with venture capitalists whether and how they can work together to speed up a burdensome acquisition process that often sees new technologies languish in the development phase for years before they ever get fielded.
On average, it takes the Navy five to six years to acquire and field a new technology, officials said. Venture capitalists can cut that time significantly, according to several panelists who spoke recently at the Department of the Navy Enterprise IT Industry Symposium, sponsored by the National Defense Industrial Association.
The Navy is studying the model the CIA has with its venture capital arm, In-Q-Tel.
The CIA created In-Q-Tel in 1999 as an independent, not-for-profit vehicle for funding commercial development of high-tech products needed by the agency. In the six years, In-Q-Tel has provided the CIA and other intelligence agencies with more than 100 technologies.
Among them are programs that can process vast amounts of information in multiple languages, make sense of seemingly unconnected information and fuse data from maps, images and other sources.
In-Q-Tel has worked with 80 companies and 10 universities and research labs, and with 200 venture capital firms to use more than $950 million in private-sector funds to support technology innovation and development.
Capt. Chris Christopher, a project director for the Navy's program executive office for IT, said the service is starting the dialogue now.
'The venture capital community has its hands on newer, cutting-edge technology first because they're the ones underwriting it,' Christopher said. 'We are figuring out how do we work together. The venture capitalists do more due diligence than anyone. Can we leverage what they're doing? This is certainly worth exploring.'
Christopher said the Navy would spend the next year talking to the firms and report its findings at next year's symposium.
That model could work, although the Navy might do well using several venture firms instead of one, according to one panelist.
'In-Q-Tel is a good model, but it needs to be broader in the way it's used from the Navy experience,' said Dominic Rodrigues, vice president of SAIC Ventures.
Rodrigues'who was joined on the panel by Nelson Cooney, managing principal of VentureGov Group; John Borchers, a partner in Crescendo Ventures; and Mark Hatfield, managing director of Motorola Ventures'said he would like to see the Navy help venture capitalists understand what the service hopes to gain.
He added that the Navy needs to commit a single person to be the liaison on the issue.
Hatfield said the two areas in which the Navy is most in need of venture capitalists' help with technical innovation are biometrics, including enterprisewide physical and network security, and data management.