SiliconBeat

Among the investors in ArcSight, the Cupertino company that held Silicon Valley’s first initial public offering of 2008, is In-Q-Tel, the strategic venture firm funded by the Central Intelligence Agency. It was also among the stockholders selling 13 percent of the shares
offered to the public on Valentine’s Day, according to the company’s SEC filing.

In-Q-Tel owned 1.2 million shares prior to the offering, in which it sold 215,330 shares at the $9 offering price, raising $1.9 million in the process. While we can’t precisely figure what the CIA-backed fund paid for its stake in the maker of “mission-control center” systems to monitor networks for nefarious activity, the average price paid by investors during three rounds prior to the IPO was about $2.05. Under those terms and including the underwriting charge, the CIA fund would have netted about $1.4 million. It still owns a million shares, or 3.3 percent of ArcSight.