Should Venture Capitalists calculate cyber risks before investing? The odds say yes…


VC’s investments are prime targets for cyber attacks

Venture Capitalists are serious risk takers. They offer money and consultancy to new companies with potential for significant financial return. Before an injection of capital into a company a VC will analyze the company and idea to determine if their investment is worthwhile. They may calculate the potential ROI, timelines, and risks before offering up millions of dollars.

According to the SEC 60% of SMB’s, including startups, have been compromised by hackers. Of that 60%, half will close their doors because of the results of a cyber breach.

Would a VC walk into a casino, where the odds of losing are 60%, and play a couple hands? Probably not.

So why would a VC invest in a company that does not have a roadmap to securing their most important asset? That is, the idea that they believe will generate millions of dollars in revenue. Like any business, your product needs to be protected. Startups with hot ideas need to protect their assets from hackers by developing a cybersecurity program that grows and improves over time.

Consider risks through the CIA Triad

In the cybersecurity field, we think about protecting data under the CIA triad. Confidentiality of data, the Integrity, and the Availability. Protecting the startup and their idea or intellectual property, can be a make or break decision in that startups success.

As a startup grows, their internet presence, visibility, and risk to their organization increases. They are prime targets for hackers because they are the lowest hanging fruit, as are all SMB’s. Hackers know these businesses typically have not developed cybersecurity practices due to budget restraints, thus leaving them open to simple attacks.

Analyze and protect your investment

Before your VC invests in a startup, wouldn’t it make sense to analyze their cybersecurity risks? Turn the odds in your favor by working with Rigid Bits. We specialize in starting and growing a company’s cybersecurity program. Our solutions can help VC’s understand the exposure they may be introducing themselves to before their investment is made. Contact us today to find out more and how we can advise your VC on detecting and mitigating cybersecurity risks in your investment.