Accelerating Cybersecurity Innovation = = October 16, 2018 - PowerPoint PPT Presentation

= Accelerating Cybersecurity Innovation = = October 16, 2018 www.mach37.com

America’s Premier Cybersecurity Accelerator = MACH37 TM is creating the next generation of disruptive cybersecurity product companies. • Launched 43 start-ups that are driving innovative security products to market • Emerging as a best of breed accelerator with demonstrated success in launching investable companies • Attracting the best seed stage concepts from around the U.S. and 22 other countries • Growing a mentor network of 200+ cybersecurity leaders MACH37 2214 Rock Hill Road, Suite 270 2 www.mach37.com Herndon, VA 20170

Relationship with CIT and Virginia = • MACH37 is a joint partnership • Virginia commitment – For initial investment ($50,000), MACH37 companies commit to establishing a significant presence in Virginia within two years (e.g., regional sales presence, government services operation) – Additional matching funds ($100,000) from the CIT GAP Funds require companies to establish headquarters in Virginia MACH37 2214 Rock Hill Road, Suite 270 3 www.mach37.com Herndon, VA 20170

MACH37 Emerging with Best of Breed = • Technical founder, solving problems they faced in industry • 12 of first 17 companies seeded – 70% seed rate tracks best-of-breed accelerators – The Fall 2014 Cohort achieved an 85% seed funding rate – $7.0M in leveraged capital – 5.0x leverage ratio – Multiple Series A rounds expected for next 12 months – Will double current leverage ratio and unrealized ROI MACH37 2214 Rock Hill Road, Suite 270 Herndon, MACH37 2214 Rock Hill Road, Suite 270 4 www.mach37.com VA 20170 Herndon, VA 20170

Emerging Global Brand In Cybersecurity = Through active thought leadership, MACH37 has emerged as a leader in the global cybersecurity and technology innovation dialog - driving high quality deal flow . MACH37 2214 Rock Hill Road, Suite 270 5 www.mach37.com Herndon, VA 20170

The MACH37 System Works = MACH37 TM companies continue to mature, achieving critical market and investor validation. Founding Prototype Initial Seed Beta Reference Series A Team Completed Round Deployment Customers Investment Established Raised Achieved Established Invested Capital Maturity MACH37 2214 Rock Hill Road, Suite 270 6 www.mach37.com Herndon, VA 20170

MACH37 TM Leadership = MACH37 TM is lead by an experienced team of cybersecurity entrepreneurs, operators, technologists, and investors. Jason Chen – Chief Executive Officer Tom Weithman – Chief Investment Officer 15+ years of business stategy. Founder of Managing Director of CIT GAP Funds, Board VentureScope. Member, Virginia Tech Intellectual Property Foundation, IBM, Hughs Electronics Jen O’Daniel – Investment Director David Ihrie – Chief Technology Officer Leads cybersecurity investments for MACH37 CTO of the Center for Innovative Technology, and CIT. Co-host of Cyberscoop’s Securiosity CTO of the National Technology Alliance, Podcast. Leads 75+ member angel investing VP of Government Programs for Semandex group. Networks, principal in five technology startups MACH37 2214 Rock Hill Road, Suite 270 7 www.mach37.com Herndon, VA 20170

MACH37 Ecosystem = www.mach37.com

MACH37 Fall 17 Cohort = Overall further along product development and customer engagement 9 www.mach37.com

MACH37 Portfolio = Endpoint Identity & Access Network & Infrastructure Security Web Security Security Management (Sopho (Silico (Thycoti s) c) m) Application Mobile Data Security Security Security (CA) Security Ops & Threat (Okta) IOT Blockchain IR Risk & Compliance Intelligence Security Digital Risk (Symante Consulting Mgt MSSP c) Messaging Security Fraud & Transaction Security Cloud Security www.mach37.com

Security Investing = • ~ 4% of overall venture spending • Longer to grow • Smaller exits • Cockroaches not Unicorns www.mach37.com

Security Landscape = www.mach37.com

VC Deals by Country = www.mach37.com Source: CBInsights

Venture Capital Investment = $21 Billion across 2,100 deals www.mach37.com Source: CBInsights

VC Deals – New Players = www.mach37.com Source: CBInsights

VC Deals - Valuations = www.mach37.com Source: Pitchbook

VC Deals - $100M+ deals = Greater valuation = fewer potential acquirers www.mach37.com Source: CBInsights

Security Companies are Cockroaches not Unicorns = 175 M & A transactions in 2017, the median value was $68 million www.mach37.com Source: Momentum Cyber

IPOs = www.mach37.com Source: Momentum Cyber, Pitchbook

Security Landscape = www.mach37.com

Future Cyber Spending = Security Spending by Segment, 2017-2022 (Constant $ Millions) - May 2018 CAGR 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017-2022 Identity and Access Management Web Access Management 1,150 1,193 1,239 1,290 1,343 1,401 3.8% 3.8% 3.8% 4.1% 4.1% 4.3% 4.0% Other Identify Access Management 1,605 1,806 2,025 2,226 2,435 2,695 15.4% 12.6% 12.1% 9.9% 9.4% 10.7% 10.9% Identity Governance & Administration 1,927 2,096 2,282 2,488 2,719 2,968 8.8% 8.8% 8.9% 9.0% 9.3% 9.1% 9.0% Total 4,681 5,095 5,546 6,003 6,497 7,064 9.6% 8.8% 8.9% 8.2% 8.2% 8.7% 8.6% Infrastructure Protection Endpoint Protection Platform (Enterprise) 4,063 4,161 4,261 4,367 4,474 4,588 2.4% 2.4% 2.4% 2.5% 2.5% 2.5% 2.5% Other Security Software 5,892 6,405 6,978 7,668 8,387 9,280 9.2% 8.7% 9.0% 9.9% 9.4% 10.6% 9.5% Secure E-mail Gateway 1,632 1,649 1,664 1,679 1,691 1,712 1.1% 1.0% 0.9% 0.9% 0.7% 1.2% 1.0% Secure Web Gateway 2,342 2,509 2,690 2,891 3,114 3,339 7.1% 7.1% 7.2% 7.5% 7.7% 7.2% 7.4% Security Information and Event Mgt (SIEM) 2,363 2,583 2,826 3,099 3,404 3,723 9.0% 9.3% 9.4% 9.6% 9.8% 9.4% 9.5% Data Loss Prevention 965 1,060 1,166 1,286 1,421 1,558 9.6% 9.9% 10.0% 10.3% 10.5% 9.6% 10.1% Security Testing 679 775 884 1,010 1,156 1,319 13.9% 14.1% 14.1% 14.3% 14.4% 14.1% 14.2% Total 17,937 19,141 20,471 22,000 23,647 25,519 6.7% 6.7% 6.9% 7.5% 7.5% 7.9% 7.3% Network Security Equipment IPS Equipment 1,199 1,007 937 864 784 709 -19.5% -16.0% -7.0% -7.7% -9.2% -9.6% -10.0% Firewall Equipment 10,743 11,749 12,737 13,584 14,355 15,133 15.0% 9.4% 8.4% 6.6% 5.7% 5.4% 7.1% Total 11,942 12,756 13,674 14,448 15,140 15,842 10.3% 6.8% 7.2% 5.7% 4.8% 4.6% 5.8% Security Services Consulting 20,743 22,561 24,517 26,568 28,736 31,125 7.4% 8.8% 8.7% 8.4% 8.2% 8.3% 8.5% Hardware Support 1,613 1,703 1,799 1,896 2,000 2,109 6.1% 5.6% 5.6% 5.4% 5.5% 5.5% 5.5% Implementation 17,478 18,624 19,821 21,100 22,464 23,940 7.2% 6.6% 6.4% 6.5% 6.5% 6.6% 6.5% IT Outsourcing 18,689 20,720 23,135 25,809 28,757 32,050 10.8% 10.9% 11.7% 11.6% 11.4% 11.5% 11.4% Total 58,524 63,608 69,272 75,373 81,956 89,224 8.7% 12.2% 9.0% 8.9% 8.8% 8.9% 9.6% Consumer 5,225 5,305 5,383 5,464 5,550 5,639 1.4% 1.5% 1.5% 1.5% 1.6% 1.6% 1.5% Grand Total 98,308 105,905 114,346 123,289 132,790 143,287 7.9% 7.7% 8.0% 7.8% 7.7% 7.9% 7.8% www.mach37.com Source: Gartner

Identity & Access Management = • $1.7 Billion, 15.5% growth in 2018 • Through 2020, over 50% of IaaS security failures will result from inadequate customer management of identities, access and privileges www.mach37.com

Web Application Firewalls & Web Security = • Forecasted at $853M in 2018 – DDoS protection – Bot management – CDN – Magecart breech www.mach37.com

Securing OT & IoT = • Significant problem • Data Centers • Bloomberg SuperMicro article www.mach37.com

= Weekly Podcast – www.cyberscoop.com Security news recap Interview with leading innovators www.mach37.com

Questions = Jen O’Daniel Jennifer.ODaniel@mach37.com Twitter: @DCVCJen www.mach37.com