Can you bootstrap a cybersecurity startup?

Welcome to the new 77 cyber warriors who joined us last week. ?? Each week, we'll be sharing insights from the Black Hat MEA community. Read exclusive interviews with industry experts and key findings from the #BHMEA23 keynote stage.

This week we’re focused on…??

Bootstrapping.?

Generally speaking, to bootstrap is to ‘get oneself into or out of a situation using existing resources’. And in business, it’s the act of launching and growing a business without investor capital – using the funds you have, and the money you earn along the way, to build your startup.?

Why are we talking about bootstrapping?

Because at Black Hat MEA 2022 Mazin Ahmed (Founder and CTO at FullHunt.io ) said:?

“It’s really hard to start a startup without funding, and it’s really hard to get funding without a product – it’s a catch 22.”?

But he did start his company without funding.?

He explained how he took on extra cybersecurity work to increase his income, and used all the additional funds to build his business. He started small as a company of one during the depths of the COVID-19 pandemic, and then grew his team when finances allowed.?

According to Crunchbase , Q2 2023 saw the announcement of only 148 cybersecurity funding deals – that’s a 35% drop from Q2 2022. And for the entire first half of 2023 only 312 deals were announced, compared to 507 in the same time period the previous year.?

It got us thinking: often, entrepreneurs and early-stage startups get the impression that they have to raise investor funds in order to be successful. But that’s not true. And with many investors holding back on new, risky additions to their portfolios due to global economic uncertainty, more entrepreneurs will need to get their heads down and bootstrap in order to build.?

So we wanted to give you a little inspiration – a quick look at cybersecurity startups that have bootstrapped with great results.?

More examples of bootstrapped cybersecurity startups

• ?? Cloudflare. It’s a cloud infrastructure and web security company, providing content delivery network services, DDoS mitigation, and more. Founded in 2009, Cloudflare bootstrapped for the first four years – before raising USD $20 million in a Series B funding round.
• ?? Sucuri. A web security company that was founded in 2010 and bootstrapped for seven years, before being acquired by web giant GoDaddy in 2017.
• ?? Secure Blink. A SaaS B2B cybersecurity startup targeting application security with machine learning-powered products, Secure Blink was founded in 2020, and incubated by DSCI National CoE – bootstrapping until this year. It was recently announced that the startup has raised an undisclosed amount of seed funding from US VC firm Expert Dojo.
• ?? Wordfence. A cybersecurity business that helps website owners protect their WordPress sites from malware and other security threats. Launched in 2011, it bootstrapped with steady growth – before raising $8 million in a Series A funding round in 2018.
• ?? Osprey Security. An AI-powered enterprise security startup which bootstrapped using services to reach eight-figure revenues.

Funding is not a prerequisite for success ??

The point we want to make here is that if you’re establishing a cybersecurity startup, investor funding is not essential.?

Business media would have us all believe that every successful startup out there raises funds right at the start, and it’s that funding alone that catapults them to success. But it’s simply not true: for every startup that raises, there are many that don’t. And there are many that don’t even try to raise.?

Because bootstrapping is a genuinely viable route to build and grow a startup – while retaining control over your business, and enjoying the freedom to iterate and evolve your product the way you want to.?

Yes, funding helps you grow. But it’s not the only way.

Do you have an idea for a topic you'd like us to cover? We're eager to hear it! Drop us a message at [email protected] and share your thoughts. Our next newsletter is scheduled for 18 October 2023.

P.S. - Mark your calendars for the return of Black Hat MEA from ?? 14 - 16 November 2023. Want to be a part of the action? Register