Security News > 2020 > March > Impact of Coronavirus Outbreak on Early Stage Venture Investment in Cybersecurity
The COVID-19 coronavirus outbreak will likely have an impact on early-stage venture investment in cybersecurity, but investors and industry professionals are optimistic.
"Angels will likely tighten their purse strings to preserve personal assets while the economic impact of the current pandemic remains unknown. However, venture capital money is still available as are the quality founders seeking capital to build great companies. We expect to see the trend of fewer deals continue along with downward valuation pressure. Downturns in the economy can be very active times for select venture capital firms as they view this as a time to get better valued deals."
"We are dealing with a technically savvy group of professionals in this industry. Early stage cybersecurity companies and their investors have quickly transitioned to virtual development, operational, and sales environments," Thomas told SecurityWeek.
He added, "Overall, we have a tremendous amount of belief in the ingenuity and kinship of the cybersecurity community. Incredible new cybersecurity companies will be born during this time. Many existing cybersecurity companies will see leadership opportunities, focused decision-making habits, and intense attention paid to customer's needs. These are all elements of a great corporate culture, which is one of the most valuable ingredients a company could acquire on its way to becoming an elite cybersecurity company."
Steve Durbin, managing director of the Information Security Forum, a London-based authority on information security and risk management, commented, "I suspect that COVID-19 will tighten further the investment criteria being applied with a keener focus on investing in a differentiated cybersecurity offering that can provide a more guaranteed return on early-stage investment. Those early stage companies that can demonstrate this will be far more attractive to investors globally. The winners in my view will be those companies that can deliver an ethically-based, digital play on the use of data to deliver quantifiable and immediate value to CISOs of all size companies. This will include both internally focused and market driven data."