From a technological point of view, cybersecurity is definitely one of the most desired aspects of the tech landscape. As of now, cybersecurity spending is around 124 billion annually, a number that is expected to grow to over 248 billion by 2023. There definitely is no ceiling for cybersecurity because as tech grows, so does cybersecurity and technology will definitely never stop growing.
With the constant growth, venture capital in cybersecurity is certainly a hot market with entrepreneurs jumping at the chance to join this market with their innovative solutions and ideas that have potential for growth.
Why You Need Venture Capital to Get Into Cybersecurity
All startups require funding and that is no different for tech-based companies like enterprise software companies that need enterprise software VC funds. The equivalent of enterprise software VC funds from a cybersecurity point of view would be cybersecurity venture capital funds.
Here are some of the benefits it comes with:
Connections
Connections and networking are part and parcel of successful businesses. Venture capitalists are pretty successful themselves and interacting with them is a surefire way to know someone who knows someone who can be a game changer for your company.
Venture capitalists are very connected and tapping into these connections could have numerous benefits for your young company.
Business Expertise
On top of the obvious financial aid and backing you get, you also get guidance and consultation from the more-seasoned venture capitalists who most likely know more about business than you do.
They can be instrumental in making crucial business decisions like financial management. Having them to bounce off key business decisions will help you make better decisions that are vital to your company’s growth.
Extra Support
Venture capitalists can help in some critical areas like legal, tax as well as personnel matters, providing active support in that very crucial stage of a business.
Downsides to Venture Capital
Loss of Control
Losing equity in your company is part and parcel of venture capital. Yes, you do get lots of cash, investors and professionals but they will want to be as involved as possible. How much stake you are willing to give up in your company will define just how much control you will have in shaping your company’s growth.
Minority Ownership Status
If you decide to sell more than 50% stake, you will lose control of your company because you essentially give up ownership of your business.
What Investors Are Looking For
If you are trying to get a cybersecurity company started and wondering what cybersecurity venture capital firms look out for so they invest or not, look no further. Firms that provide venture capital funds like venture capital Israel for companies based in Israel look out for factors like these:
Scalability
Scalability, the ability to exponentially grow, has been a very appealing factor for venture capital firms. Investors plan for the future so even if your company may not be selling products for a year or so, there is no cause for alarm.
In fact, some investors dwell on the fact that a product has a couple of years before it hits the market so they pursue more immediate deals as they keep your startup ready for a potentially successful feature.
Solid Business Plans
If you are looking for an investor, think of two things:
Do you have a solid business plan complete with good financial figures and smart marketing strategies? Do you have a unique product delivery model that can help deal with struggles in today’s market?
Having the former is the mark of smart investing so that is in fact a necessity. Investors need to be at ease especially when investing in hard times. The more foolproof your business plan, the higher your chances of getting investors.
Be that as it may, most short-term investment opportunities include startups looking to immediately impact the remote working ecosystem.
Armed with these key factors, some venture capital Israel just may be coming your way – if you are based in Israel of course.
