“Depending on the feedback we get, we go deeper into documentation that supports what we learn from the conversation.”

• For a business built around software, cybersecurity is an integral part of product development. Assessing the level of cyber risk on that kind of investment depends on several
  business and technical factors.
• When considering investment in a product that exchanges information, it’s important to
  understand how that business interacts with the external world, what kind of information it
  gives and receives, who those interactions are with, and the vulnerabilities that exist in information exchanges.

“Assessments need to provide descriptions of cyber risks and potential mitigation suggestions that point us toward solutions.”

For many software and high-tech hardware products, cybersecurity is an integral part of product development. The cyber risks associated with those products are a key factor in overall business risk for any company specializing in those products. As an investor in early-stage technology businesses, Odilon Queiroz sees cyber risk as depending on several business and technical factors. “This is a delicate question,” he says. “It’s not that cybersecurity isn’t important, but when you’re a small company, you have to factor security in when you allocate your dollars.”

For an investor in new technology companies, success depends on product development and market fit. If a company doesn’t have a good product with a good market fit, it won’t succeed. “The most important thing in early stages is to make sure you have a product, that it is well developed, that you can attract clients, and that you have a position,” Queiroz explains. “When you’re a small company, you have little visibility and no brand. You have nothing to lose. You must spend money on product development and market fit.” Most early-stage companies rely on cloud-computing suppliers, which can provide a better risk-cost balance.

This is an excerpt from 7 Experts on Evaluating and Managing Cyber Risk for Investors.  This eBook was generously sponsored by BlueVoyant.