Cybersecurity spend in 2015 was $75b, and the market is estimated to be worth $170b by 2020. This makes cybersecurity startups hot properties for venture capitalists.
Yet knowing how to assess cybersecurity companies is critical. Industry veteran Richard Greene gives his thoughts on what to look for.
There are many factors that investors should assess when contemplating investing in a cybersecurity company. Greene breaks down his top three investing tips simply: Investors should look to back a company that addresses or solves a specific problem in a unique manner that impacts the broader industry. Investors should understand the appetite across industries for that specific product or service. 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.