Part Two: The Breach

READ PART ONE: THE DEAL THAT CHANGED EVERYTHING HERE

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The Breach

Sarah's coffee had grown cold, untouched since she began her story. The morning crowd at Blue Bottle had thinned out, leaving them in a bubble of quiet perfect for uncomfortable truths.

"It started with a Slack message," Sarah said, pulling out her phone. "Monday morning, 6:47 AM. Our portfolio company's CTO: 'Minor authentication issues, working on it.'" She gave a bitter laugh. "By 10 AM, nearly half their customers couldn't log in. By 2 PM, we were staring at a ransom note demanding $25 million in Bitcoin."

John felt his stomach tighten. He reached for his own coffee, needing something to do with his hands. "But they had the certifications," he protested weakly, hearing how hollow it sounded.

Sarah's eyes met his. "That's exactly the problem. We checked all the boxes, but nobody checked if anyone was actually following the processes." She pulled out her tablet, her fingers dancing across the screen. "Look at this."

She turned the tablet toward him. The numbers made him wince:

```

Initial Crisis Costs:

- Ransom Payment: $25M

- Forensics/Technical: $7.5M

- Legal/PR: $4.2M

- Customer Communications: $2.1M

- Emergency Security Measures: $8.3M

```

"Forty-seven million," John whispered, doing the math. "Just in the first wave?"

"And that's not even the worst part." Sarah leaned back, running a hand through her short black hair. "The attackers had been in their systems for five months before we found them. Five months, John."

The implications hit him like a physical blow. His target company's systems controlled everything from temperature monitoring to ingredient tracking. A breach wouldn't just mean lost data - it could compromise food safety. He thought about the specialty cheese production lines they were so excited about acquiring.

"Think about it," Sarah continued, reading his expression. "Five months of access to your production systems, quality control data, supplier information..." She trailed off, letting him fill in the blanks.

John pulled out his own tablet, opening the due diligence report he'd been so proud of earlier. The words "SOC 2 Type II Compliant" seemed to mock him now. "What about insurance?" he asked, grasping for some comfort.

Sarah's laugh had no humor in it. "That's another fun story. Our carrier tried to deny coverage. Something about a 'failure to maintain security standards' exclusion." She tapped her perfectly manicured nails on the table. "And yes, that was with all those precious certifications in place."

The café had grown quieter, the morning rush over. Through the window, John could see people hurrying past, wrapped up in their own concerns. None of them knowing that just a few feet away, his entire approach to M&A was being dismantled over cooling coffee.

"So what did you do?" he asked, though he wasn't sure he wanted to know the answer.

Sarah's expression softened slightly. "That's actually the interesting part. And the reason I'm telling you all this." She pulled her chair closer, lowering her voice. "Last month, I worked with another food company on an acquisition. They brought in a specialized cybersecurity firm - not just for protection, but as a negotiating tool."

John raised an eyebrow. "Negotiating tool?"

"They found serious security issues during the enhanced audit - nothing showing up in the standard SOC 2 reports. Instead of walking away, they used the findings to negotiate. Knocked almost 15% off the purchase price, with the seller agreeing to fund immediate security improvements."

For the first time that morning, John felt a glimmer of hope. He thought about his own $25 million deal, and the growing knot of anxiety in his stomach began to loosen. "Tell me more about this enhanced audit."

Check out Part Three : The Deal That Changed Everything - The Audit

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