Why don’t venture capitalists flock to fund cybersecurity startups?

On the backside of pretty strong earnings reports and valuations, public cybersecurity companies are outperforming the broader technology segment. Still, funding for cybersecurity startups has leveled off.

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It’s an interesting issue worth thinking about for a while. Let’s take a look this morning at how cybersecurity companies have performed, as well as some datasets related to venture capital investments in the first quarter of 2023 to understand why investment in this sector is lukewarm despite the companies’ excellent results.

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How to make a lot of money in the technology game

If you want to make truckloads of money selling software today, I wouldn’t recommend creating an API to connect a blockchain to the esports world. Both sectors are struggling after a period of over-investment and hype, though I hope both rise again: the former because it would be entertaining in a business context, and the latter because I’m a massive nerd waiting patiently for a Starcraft revival .

No, if you wanted to make a lot of money in the technology game today, you would be building and selling cybersecurity products.

The evidence is clear. Cybersecurity is going pretty smoothly, even as the biggest tech companies muddle along and Zoom is figuring out how to grow again after one of the most impressive runs in company history.

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