The global COVID-19 pandemic has harmed startup funding in general. According to a report by Startup Genome, global venture capital (VC) funding has dropped 20% since December.
As a result, four out of ten companies are in the red zone,’ meaning they have three months or less of funding runway remaining. Furthermore, our recent trend to remote working has created an opportunity for cybercriminals to exploit the lower levels of protection that internet users currently operate on when working from home.
According to a recent Mimecast analysis, opportunistic cybercrime increased by 33% in the three months from January to March. Although this is bad news for users, it isn’t so awful for cybersecurity businesses, which now have to deal with it. This indicates that cybersecurity investment funds still have capital available to invest in businesses.
A recent report produced by DataTribe founder Mike Janke, a worldwide foundry that invests in cybersecurity businesses, stated, “This is a wonderful opportunity to invest in quality ventures.”
Although he noted that projects would take a little longer to close due to the current conditions, Janke reassured that funding for cybersecurity is still available and that investors’ selectivity could imply that even more money could become available in the future. Meanwhile, now is the moment for cybersecurity startups to start looking into their choices.
VC (Venture Capital)
In recent years, venture capital financing for cybersecurity businesses has steadily increased, with close to $10 billion spent last year. Despite the circumstances, investors have shown no indications of slowing down their appetite for high-risk, high-reward investments this year.
TenEleven Ventures and GAD Capital in California are two VC firms focused explicitly on cybersecurity investment funds for early-stage enterprises. Other venture capital firms, including Bessemer Venture Partners, Accel, Edison Partners, Citi Ventures, Dell Technologies Capital, and Greylock, aren’t explicitly focused on cybersecurity. Although they may be more competitive, given that cybersecurity businesses must compete for funding with startups in other industries, they are still a viable alternative.
Competitions for new businesses
Pitch competitions, in which companies present their business strategies to a panel of judges — almost invariably investors — in the hopes of gaining investment, may often win some of the best cybersecurity money, but they need a bit more time and preparation.
Some of these challenges are also organized by government entities in the United Kingdom, such as the Innovation Money Service, which provides funding for a variety of initiatives, including UK academics aiming to market their cybersecurity concepts. Other private initiatives include competitions such as the Industrial Control Systems (ICS) cybersecurity Conference, which will be held remotely and allow cybersecurity firms to pitch this year.
The conference is set to take place in Atlanta in October.
Accelerators / Incubators
Young cybersecurity startups wishing to develop people and make contacts in the industry, which could convert into funding partners, can look into incubator and accelerator programs. These platforms are ideal for cybersecurity organizations with all of the necessary safeguards but are having trouble securing the finance they require. In these situations, incubators and accelerators might speed up the conversations lacking among businesses.
CyRise, a Melbourne-based accelerator, is currently accepting applications for the fourth cohort of its bootcamp program, which includes a fifty thousand dollar grant and mentorship and networking opportunities. Tech Nation Cyber, the UK’s first scaleup program for cybersecurity firms, is accessible to aid international and domestic startups. The program is free to join and includes peer-to-peer learning and coaching sessions.
Some cybersecurity entrepreneurs use their own cash to launch their businesses, despite this being a risky decision given the current economic scenario. Some entrepreneurs prefer to graft to raise funds needed to grow their business if they have personal savings or can afford to use low-to-no-interest credit cards.
Cybersecurity firms like St. Louis-based Servlytics have managed to bootstrap their way to $2 million in funding this March, with benefits including control over the path the business takes, assuring the business will live longer, and a sense of accomplishment.
Startups don’t have to worry about acquiring finance for cybersecurity enterprises because it already exists. They may now concentrate on obtaining this funding, determining which cybersecurity funds will be most beneficial to their company, and applying. Companies that use cybersecurity PR to secure external investment from VCs and accelerator programs will have a better chance of securing funding.
A thorough digital PR plan can help you build trust, create thought leadership, and demonstrate the unique value that your cybersecurity solution provides, all while increasing your online exposure.