Who’s making the biggest waves in cybersecurity to move the industry forward?
According to McAfee CEO Chris Young, there are more than a handful of core cybersecurity incubators that are currently bringing both capital and perspective to the table to help drive innovation. It’s a mix of private equity and venture capital firms that are trying to facilitate a dialogue between the technology companies and the buyer or user community to accelerate cybersecurity startups.
While venture capitalists help fund and manage companies that exhibit great growth potential, private equity firms add value by providing best practices around everything from sales and marketing/product development to financials and human resources, says Infoblox president and CEO Jesper Andersen.
Here’s a look at eight of the incubators Young, Andersen, and other leaders consider to be doubling down in this age of cyber crimes.
Specialized venture capital firm TenEleven Ventures is exclusively dedicated to helping cybersecurity entrepreneurs thrive. With 20 years of its own expertise on the front lines of cybersecurity companies, TenEleven is in a good position to spot trailblazers and promising startups in the industry. The former security managers and executives provide not only capital but also counsel and connections to cyber-centric businesses. Their deep network of cyber colleagues and ecosystem of cybersecurity-focused service providers―including investment bankers, researchers, channel partners, and legal and recruitment specialists―enables them to sequence growth initiatives at the right time for those with whom the firm partners.
Garnering financial backing from a large discerning fund like Kleiner Perkins can prove very useful to cyber-centric startups as they approach new customers, says Larry Lunetta of Aruba Enterprise Networking and Security Solutions. The firm understands how the industry flows and what the challenges can look like for early-stage cybersecurity entrepreneurs. According to Lunetta, Kleiner also has CIO and CISO councils, and brings in portfolio companies to help find early betas and proof of concepts for startup offerings.
Recognizing patterns and market dynamics in business takes knowledge of both operating challenges and investor fundamentals. It’s something Endgame CEO Nate Fick says General Atlantic does well. The investment firm brought on the CISO of General Electric to help it evaluate company pitches. Having a former user on hand enables General Atlantic to take a pragmatic approach to working with partners. To date, it has helped more than 300 companies in the tech and other sectors manage growth by seizing new opportunities, mitigating risks, and preparing to scale their business models for global expansion.
Venture capital firm Andreessen Horowitz takes an aggressive stance on identifying early technologies and investing capital. Its management team is comprised of many former founders/operators, CEOs, and CTOs of successful technology companies who bring solid domain expertise to the business. With its prime location in Silicon Valley, the firm is also able to hire talented tech people who can hone in on promising local startups. They effectively scout the market for investment opportunities with good potential.
Private equity firm Blackstone may be a relative newcomer to the cybersecurity game, but not to investing. The firm has been a powerful force in unlocking value across industries for more than 30 years using its extensive arsenal of C-level connections. Because of Blackstone’s expertise and size, it has access to resources on a global scale and critical mass that cyber startups would be wise to take advantage of.
Clear Sky Capital
Another private equity powerhouse is Clear Sky Capital, whose has a good track record of backing winners. The firm was an early-stage endorser of security companies Cylance and Demisto, and is known for becoming heavily invested in the success of the companies it selects. According to security industry executive Stu Solomon, who leads strategy and development efforts at Recorded Future, Clear Sky provides portfolio companies with mentors who have strong relationships and knowledge in the cyber space.
Insight Partners employs software experts who invest in growth-stage technology and software companies through both venture capital and private equity. The firm has had good success since 1995 largely due to its ability to use scale, focus, and experience to help companies capture value and generate long-term business growth.
As a dedicated cybersecurity advisory and consulting firm, Momentum Cyber effectively uses its singular focus on cybersecurity to accelerate awareness of new technologies and a broad range of strategic activities, according to Dino DiMarino of Mimecast. It caters to the needs of earlier stage founders, CEOs, and board members as well as the challenges later stage and public companies may face throughout their lifecycle. The investor has built great relationships within the cybersecurity industry and is able to get cyber-centric startups in front of Fortune 500 CISOs.