Tell us about your firm. What makes it different?
Forgepoint Capital is a sector-focused venture capital firm focused on cybersecurity and infrastructure software. As the most active venture capital fund in cybersecurity and cyber-adjacent areas with 37 active portfolio companies, we combine a thesis-driven approach with proven experience building and supporting companies.
We are mission-oriented in that we view security as fundamental and work closely with the entrepreneurs and innovators protecting our digital future. We believe that greater cybersecurity enables economic prosperity and helps businesses transform digitally, while protecting individual privacy.
We are particularly proud of our community, which includes our Advisory Council of 80+ industry leaders and decision-makers, who collectively bring expertise and connections to guide product development, business strategy, and go-to-market success. Our team of investors and operators work hard to support our companies from inception to exit.
Finally, we believe in advancing diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) initiatives within our own team and portfolio companies. We developed an ESG Handbook for our firm and portfolio and share it with other firms and LPs to make ESG actionable from first meeting to exit. Forgepoint also has more Asian and Pacific Islanders, Blacks, Hispanics/Latinos, and Veterans represented than industry averages in VC. We’re also proud to be a founding signatory of ILPA’s Diversity in Action Initiative and an active participant in the ILPA’s ESG Data Convergence Project.
What defines your portfolio?
Since Forgepoint’s inception in 2015, we’ve raised $770 million and deployed over half a billion in 42 investments. Our portfolio can be defined by:
- Cybersecurity and cyber-adjacencies: As technology and markets have evolved, we’ve broadened our definition of cybersecurity to include critical adjacent technologies that require security to operate (AI/ML, Blockchain, Cloud, DevOps, Insurtech, Fintech, and Privacy).
- Early-stage (mostly) and select venture growth: Our sweet spot is Series A and B investments where our hands-on approach to go-to-market, product design, recruiting, and fundraising go furthest. We also participate in select growth deals that enable us to bring security expertise to the table.
- Our entrepreneurs: Startups are hard enough, and it takes a uniquely passionate, visionary, and technical entrepreneur to tackle the hardest challenges in securing and enabling the digital world.
Tell us about how your portfolio companies are navigating through the current market environment.
Headquartered in the San Francisco Bay Area, we invest globally with portfolio companies across North America, Europe, Israel, India, and Australia. In our work tracking emerging leaders in cybersecurity innovation globally, we’re seeing these trends:
- Extensive consolidation, a constant characteristic of this market. New attack vectors are continually surfacing, yet no single piece of technology can solve these issues. Large and public companies will always need to buy innovation to fill gaps in their offerings and open up market segments. This, combined with the current economic climate, has led to an enhanced consolidation wave as private companies face the decision to either raise new rounds of financing in a challenging environment that is seeing normalized valuations; or to be acquired as some investors take pause. This merger activity has a positive impact as customers benefit from integrated solutions that bring enhanced capabilities at a reduced total cost of ownership.
- Convergence between security and infrastructure software. As companies digitally transform and adopt cloud-native technologies, getting “shift left” right and embedding secure coding practices continues to be critical. Given the talent shortage across cybersecurity and software development combined with the continued explosion of data and advances in AI/ML and automation across industries, security is a business enabler and required for sustainable innovation.
- Market resilience of cybersecurity, driven by evolving customer needs, an ever-changing threat landscape, and growing enterprise budgets. What used to be an “IT problem” is now an organizational priority from employees to board rooms around the globe. Cybersecurity remains a vital area of dependency and growth; in our CISO Security Priorities Model, 76% of survey respondents said they expect security budgets to increase in 2022.
What are the benefits of being an NVCA member?
I have had the privilege of being a member as well as a Board member of the NVCA, so I am slightly biased! As a former engineer, founder, and operator who transitioned to venture capital, I have personally benefited from NVCA’s commitment to policy and research, extensive resources, and diverse community. We’re proud to be part of this organization that continues to galvanize and support the startup ecosystem as well as member firms like Forgepoint.
What’s ahead for your firm in 2022?
We’ve been saying as a team that bull or bear market, the threats do not stop – neither do the gaps and needs of organizations worldwide as they innovate and build for the future. We recently celebrated a wave of M&A, including Area 1 Security (Cloudflare), Attivo Networks (SentinelOne), BehavioSec (LexisNexis), Cysiv (Forescout), and IDX (ZeroFox, which was publicly listed on Nasdaq last month as the first security IPO in 2022). As we look to the rest of 2022, we’re excited about:
- Incubations: We’ve launched two companies within Forgepoint: SolCyber and Surefire Cyber. Later this year, we’ll announce our latest incubation, tackling a significant challenge and opportunity in cyber insurance.
- Talent support: There is an enormous talent shortage in cybersecurity. With the tumult of these market conditions, we’re already working closely with our startups to help them shore up and rebalance their talent strategies and plans.
- Community: Now more than ever, we need to invest in our community and network to ensure the continued advancement of our industry and accelerate portfolio company growth.
- Firm growth: Last but not least – we’ll continue to grow Forgepoint – expanding our global reach and adding key talent to our team!
Describe your firm’s culture in 5 words or less