DOD Looking For Silicon Valley Type Startups

First there was In-Q-Tel, now we have DeVenCI. The U.S. government effort to catch up to our adversaries in the area of high-tech gimcracks seems to be really moving along.

Adversaries, you ask?

Yes, the big defense contractors.

Through a program that recently emerged from an experimental phase, the Defense Department is using some of the nation's top technology investors to help it find innovations from tiny start-up companies, which have not traditionally been a part of the military's vast supply chain.

The program provides a regular exchange of ideas and periodic meetings between a select group of venture capitalists and dozens of strategists and buyers from the major military and intelligence branches. Government officials talk about their needs, and the investors suggest solutions culled from technology start-ups across the country.

It is in some ways an odd coupling of the historically slow-moving federal agencies and fast-moving investors, who deal in technologies that are no sooner developed than they are threatened with obsolescence.

But the participants argue that the project, called DeVenCI for Defense Venture Catalyst Initiative, brings together two groups that have much to gain from each other and that have had trouble finding easy, efficient ways to work together. Those on the military side of things have adopted the Silicon Valley vernacular to explain the idea of systematically consulting investors to find new technology.

"We're a search engine," said Bob Pohanka, director of DeVenCI, noting that the program is a chance for military procurement officials to have more intimate contact with investors who make a living scouring laboratories and universities for the latest innovations.

Venture capitalists "have knowledge of emerging technology that may be developed by companies as small as two guys in a garage," Mr. Pohanka said. "These are companies that are not involved in the D.O.D. supply chain."

For the investors, it is a chance to get closer to a branch of government with vast spending power that is a potential customer for the start-ups they have backed. That can be particularly valuable because the venture capital industry, far from enjoying the success of the dot-com boom, has languished in recent years and is looking for new markets and sales opportunities.

The military is "like a Fortune No. 1 company," said E. Rogers Novak Jr., managing director of the venture capital firm Novak Biddle Venture Partners, and one of the investors who consults with the government. "We may get a customer and the D.O.D. gets something that helps them."

The project is in its early stages, having convened three meetings since October. And there are questions about whether a bureaucratic and careful system built around long-term relationships between the military branches and their contractors can be compatible with the quicker culture of Silicon Valley.

"Everybody is feeling their way through this relationship," Mr. Novak said. "The potential is there. The devil is in the details."

There is nothing fundamentally new about the military trying to gain access to cutting-edge technology. For much of the 20th century, it financed and led that development. But that has changed in the last several decades as innovation has started to move at light speed in the private sector.

Since the Sept. 11 attacks, the military has reached out more to the private sector, trying to make use of a range of technologies in pursuing security and fighting wars. Some venture capitalists have catered to those demands, creating firms aimed at military and security needs.

On the public sector side, the Central Intelligence Agency in 1999 started In-Q-Tel, a venture that identifies and invests in start-ups and technologies whose products could be used in intelligence. And the Defense Advanced Research Projects Agency backs new technology and has helped create many important advances, including the Internet.

What makes DeVenCI unusual, its participants say, is that by bringing together military procurement agents and technology investors it is creating a kind of brokerage for ideas.