Updated

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Yesterday, some asked us about our post on Gilman Louie, the chief executive of the CIA’s venture arm, and his decision start his own venture firm here in Silicon Valley.

We reported that Louie is joining former journalist and venture capitalist Stewart Alsop, and the question was: Why did Louie pick Alsop?

So we asked Louie and Alsop this. Turns out, Alsop picked Louie. Last year, Alsop left his previous firm, New Enterprise Associates, in part because he wanted to focus on early-stage investing. He approached Louie last year about partnering, who at first rebuffed Alsop, saying he was pretty focused on what he was doing.

Six months later, Louie was back in touch with…

…Alsop, saying he was tired of shuttling back and forth between D.C. and Silicon Valley. And the two found they both wanted the same thing: to help entrepreneurs build companies.

They trusted each other, having met 20 years ago when Alsop had just launched his newsletter. Alsop had visited Louie at his parents’ house, when he was building his first gaming company in the living room.

Louie understands technology and has experience running companies, while Alsop is “probably the best networking gadfly in the marketplace,” Louie said. “He knows everybody.”

One thing Alsop said struck us. He said Louie had no way to make real money, given that he was working for the government (Clarification: To be exact, he worked for In-Q-Tel, which is a private non-profit company that contracts to the government). But those were Alsop’s words. Louie made no such complaint, we note.

Indeed, this story by Government Computer News shows Louie’s salary in the 2003 tax year amounted to $354,369, according to the tax return. It was supplemented by a $252,770 bonus and other benefits for total compensation of $748,798, the report said.

The tax return indicates that Louie contributed $101,650 to charity, leaving a net compensation of $647,139.

Nine of the organization’s other top 10 employees received total compensation above $200,000, ranging from $233,022 to $496,305.

President Bush, meanwhile, makes only $400,000.

Anyway, here’s our latest VC column (sub required) for the Mercury News today, which also includes a look at the venture capital rush to fund consumer technology, video, networking-in-the home companies — if you are interested in such things…

P.S. We pointed out some of Stewart Alsop’s bubble-era investment shortcomings in a recent post. One reader suggested we link to Bessemer’s list of failures great deals it passed on, which the firm posted on its own Web site. The list has been up there for a while. But as the reader commented, “it is a really refreshing bit of honesty and humor. Every VC should post one to earn credibility.”