Cybersecurity Venture Capital: What Investors Can Learn from the Industry’s Top Venture Capitalists

- April 28th, 2016

The Investing News Network sat down with industry veteran and Seculert CEO Richard Greene to learn what venture capitalists are looking for in the cybersecurity market, and what DIY investors can learn from them.

The cybersecurity market is growing fast, with great opportunities for growth and innovation. This bodes well for individuals looking to invest in an up and coming tech market. For indeed, savvy investors don’t just want to follow trends, they want to help create them.
That’s why the Investing News Network turned to Seculert CEO Richard Greene. With over 25 years of experience in this industry, Greene knows exactly what venture capitalists are looking for in the cybersecurity space. This information is valuable for investors of all sorts, as they seek to navigate this up and coming industry.

Cybersecurity venture capital scene

Greene is quite the expert when it comes to private investment and venture capital having funded, run and sold several companies, including Securify, AppCentral, and Seculert. So what does the cybersecurity venture capital landscape look like right now? Greene explains, “in the security space, VC money hasn’t dried up. If you have the right product and there’s a market demand, you can continue to grow regardless of economic conditions.” In particular, “VCs want to invest in companies that are addressing [the] universal problem [of cybersecurity] and providing a solution to the ever-evolving threat landscape.” All told, “investors are seeing a high demand for this type of technology, and believe that demand will correlate to value creation in the equity markets.”

Future trends for the cybersecurity market

As Greene suggests, now is a strong time to invest in the cybersecurity market. The sector is growing, with increased demand, investment and innovation. He explains that “there is an increasing demand for security and no organization wants to fall victim to a breach. Furthermore, understanding the cyber threat landscape is a constant game of trying to stay ahead of the latest threats.” So what is the hottest trend right now? “Currently,” Green explains “some companies believe in either prevention or detection technologies. However, in the near future, we’ll see more organizations adopt both prevention and detection tools to address complex attacks.”


In the next five to ten years, “it will become increasingly standard for companies to have deeper visibility into who, what and where an organization is getting attacked and how to remediate the threats immediately.” Furthermore, “with the more insight into operations we will also see an increase in the need to automate processes. Moving past the automation process, we’ll see the security industry turn toward an emphasis on prediction in the coming years.”
On the attack side of things, “we keep seeing the evolution of different trends, from spear phishing years ago, to ransomware now, and we don’t know what the next security threat will be.” Ultimately, understanding how these attacks are penetrating systems, and learning from each attack, will become increasingly important across organizations.

Top tips for cybersecurity investors

There are many factors that investors should assess when contemplating investing in a cybersecurity company. Greene breaks down his top three investing tips simply:

  1. Investors should look to back a company that addresses or solves a specific problem in a unique manner that impacts the broader industry.
  2. Investors should understand the appetite across industries for that specific product or service.
  3. Venture capitalists must understand that a very small percent of their portfolio companies will ever enter the public funding markets and, if successful, will be acquired by a bigger player. This puts pressure on startups to be able to articulate not only a customer value proposition, but a value proposition for the companies that are active in the “roll up” market.

The next big cybersecurity stock is coming.


Read our FREE outlook report on cybersecurity investing!


Seculert looking to the future
So what is Greene up to right now? The cybersecurity veteran is currently helming Seculert, a private cybersecurity company based in Santa Clara that provides attack detection and analytics solutions to global enterprises. In his own words, “Seculert utilizes machine learning-based log analytics and proprietary threat intelligence to automatically detect cyber attacks inside the network, revealing exactly which devices and users are comprised. This allows big enterprises to test, measure and prove the effectiveness of their threat prevention systems without having to deploy additional staff, hardware or software.”
When asked if Seculert might be poised for a future IPO, Greene hedges. He explains that “right now, Seculert is focused on growth. We have some big things planned and our priority right now is keeping our customers happy and pushing the business forward. Like any startup, we’re open to opportunities – it’s all about what’s right for our customers and the business.”
Investors, too, should be focused upon opportunities. And, as this interview with Greene illustrates, the cybersecurity industry today is a prime place of opportunity.
Don’t forget to follow us @INN_Technology for real-time news updates.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.

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