Thursday, August 9, 2012

Security, Bit9, and Business Models | Jo Tango

Aug 8

In: Entrepreneurship, Technology and VC

The persistent and recent security hacks reported in the media remind me that we are unsafe. In spite of many dollars and much effort, the arms race against black-hat initiatives continues.

Security is a sector that continues to intrigue me. At my previous firm, I was a founding investor in Bit9, which recently announced a major financing, which Sequoia led. CEO Patrick Morley is a rock star.

Yet, the sector also concerns me. Few start-ups will hit Bit9?s inflection point. Few companies can recruit a Patrick Morley, who knows when to up the burn and when to hold off.

Many security start-ups have capital-intensive business models involving many expensive field sales people. Get it right, and you?re golden. Get it wrong, and you?re sucking down a lot of capital quickly. You get it half-right, and you still need a lot of VC money, which means the start-up?s founders may not make much money in an exit.

Would love to hear from folks about next-gen business models for security.

Source: http://jtangovc.com/security/

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