Cyber Investing Summit 2018: Funding for Startups Panel

Transcript

next panel this is another fantastic one focusing on funding for startups on this panel we have big spenders and big idea generation idea generators people that have funded many many startups as well as those who have had successful exits fantastic moderator who herself is also a big spender in the cybersecurity area let's hear it for our next panel for funding for startups thank you and they're still getting miked up by raise of hands how many people this is their first year at the cyber investing summit Wow fantastic who here has been here for two or three years before wonderful so as you've seen we've actually grown this event pretty significantly in just its short short start beginnings it's actually a few people know it's actually a family-run business I started this with my my cousin Lindsay and our mothers Hilary and Adrian and everyone wearing a blue tag is actually a family member of ours here today who's helped us put this fantastic event together in 2014 actually helped sponsor the world's first cybersecurity ETF and what we learned was that there was a ton of interest for investing in cybersecurity but there wasn't really this venue to bring all the people with the ideas the product solutions and those with the capital and the desire to invest in this industry so what we really hope to do is build this event up have more companies from both the public and the private side and have many more people come and get to learn about the the critical opportunities there are for funding this very important industry without further ado our next panel thank you [Music] well hi everyone I'm Katie gray I'm a partner on the investment team at Inc you tell and I'm really thrilled to have this this great panel here today and we are gonna talk about funding for startups so to kind of kick things off you know first of all I think just recognizing that that 2017 was actually a banner year for venture investing in cyber security so 424 new deals last year 5.1 billion dollars invested that's that's that's quite a lot and I think you know many of the folks on this panel and others who are out here in the audience are some of the investors who have have placed some bets on those companies and so what I want to do is maybe just to kick things off with having everyone on the panel just introduce themselves just say a couple of words about the firm that you represent and that you are here with maybe talk a little bit about what stage of companies that you invest in particularly in cyber and then maybe also tell us one investment that you did last year in the cyber security realm that you are excited about and obviously that you have many children you love all of them but maybe just to highlight one investment just to give kind of a flavor of the types of things that you do so we'll start off with you Bob okay great thanks candy so Bob Ackerman founder of Eligius cyber we are a cyber security focused firm we actually have been investing in cyber before depending upon how you define cyber you know 16 to 18 years so back before it was cool when we shifted the firm's focused 100% cyber five years ago it wasn't very cool when we did the world's first dedicated cyber fund three years ago it wasn't very cool summer in the last three years we got to be kind of relevant are you met my partner Dave the Walt little earlier today always describe dave is the apex predator in cybersecurity you'll see where that comes from our firm is we've actually got a platform and so lead to cyber itself is early staged early growth so we kind of pick up things at series a up to will engage in a series C or a series D or Dave typically tends to be more involved we also have a platform they'll call data tribe which is located in Columbia Maryland where we actually start companies you know our team are all X operating executives we've been at this for for quite a while and you know part of what we did a data try really was a response to some of the some of the things Dave talked about earlier a lot of me too in this space some great thing about the venture community is it slow to adopt new ideas and when it finds a new idea that's got merit it tends to over capitalize the hell out of it we're seeing a lot of that in cyber today and our approach was to you know look at the things that we see in the marketplace that we like but also take some of our our expertise and some of our access to disruptive innovation coming out of government labs and bring those two together and actually start companies it allows us to go earlier in the process allows us to build more value in frankly allows us to build a more differentiated portfolio I think the last question Katie was you know a company last year probably at Drago's would be a great example Drago's as an industrial control security team this is a company we actually started a data tribe it's a team out of the National Security Agency that were the X offensive team from the NSA tremendously deep domain expertise and we worked with them to get the company going at data tribe and when they worried for their series a financing we led the series a financing so either Ron gula president of gula tech adventures prior to starting ghoul attack I was the CEO and co-founder a tenable network security ran that for about 15 years and really got into angel investing a lot of those investments rolled into ghoul attack adventures we focus primarily on cybersecurity although we have one drone anti drone company called Department thirteen that hacks into the drone to keep them from falling on people at stadiums and whatnot and now we range from pre-revenue customer all the way to participating in some Series B's and some some Series C's very excited about that last year we invested in a couple companies and one of them is cool span and I got to mention them because three of the or two of the three year and brothers I know are here maybe individually I think I can take any one of them but together they're gonna a LOD and Doe they're gonna catch up on me so looking forward to the panel here nobody's questions Bruce Arians lumber capital it's great to be here we are based out of Silicon Valley as an early stage sort of seed and Series eight early stage venture fund I spent about 20 years in the Bay Area I've also lived in work in tel-aviv where we have an office and I'm presently based here in New York and we're actively investing really across the whole IT spectrum cyber security has been an area of focus since the early 90s my partner David Bloomberg was the fourth operating executive at checkpoint software in the early 90s so we've been investing in cyber security for many decades at this point but we're broad information technology we had a really nice IP I with the company last year called Nutanix and hyper-converged cloud storage space and we're investing across mobile social digital etc currently investing at our fourth fund it's about two hundred and ten million dollars our typical entry point pre product pre-revenue we'll invest as little as maybe half a million dollars up to maybe five million dollars in terms of initial check size and then have the ability to follow on over the life of the company last year we let us seed investment in an Israeli technology company and I think if you look at the distribution of cyber investing in 2017 about 70% of it with Silicon Valley or basically the state of California number two behind Silicon Valley was Israel at about 7% so order of magnitude smaller but nonetheless you know very relevant and we continue to invest in source amazing opportunities in terms of early-stage technology out of Israel so this company Medicaid is a healthcare I owe t cyber related company focused really specifically on the health care vertical protecting all devices that are internet enabled across the hospital healthcare system and if you really talk to folks that let's say check only pal so they're really much more focused on the IT side of the shop and not doing this good a job in terms of some of those devices and I think at times it also ties in nicely to like ransomware which we think is a big problem that's gonna continue to grow in the coming years another cyber company bio catch that we were early investors in a few years back just raised a large round over the last quarter and they're focused on behavioral biometric authentication so just two examples in the cyber space we probably have about a dozen across across a few of our portfolios in talk loud great to be here my name is Devi ran I'm a senior director at Cisco leading our strategy and BD teams I came to Cisco several years ago I was a CEO and co-founder of threat grid and you know sort of who that company is acquired into into the business group here the focus of what we do as a team is looking at a number of different technology parts of the enterprise part of the enterprise system so we leverage network security teams cloud security teams and endpoint security teams and that's how we situate our our portfolio of products and what we do as a business group on the strategy and BD side is work with a number of different technologies to integrate into those existing infrastructures so we've got about a hundred and fifty plus partners technology vendors which we've actually integrated with you know publishing api's and other things validating these integrations and it's about 250 other 250 integrations across those 150 partners so we're extremely active across the entire infrastructure kind of playing nice collecting and moving this information making accessible to any given enterprise that has multiple technologies the things we do from an investment side because we're so open and we're so forthcoming and wanting to partner and integrate with now these is we actually look at this as a place to kind of get smart in a certain subset under certain part of the industry so we typically do not necessarily angel but things that are a little bit later on in the maturity of the company we will never lead around per se you know so we'll come in after alongside with the lead but we've been fairly active in this you know across the IT but you know our focus here is within cyber and so we've done things with you know Dehradun flashpoint by quotient we work closely with the company Nicky bata out of Israel called teammate and we've invested in elusive and several other so we're fairly active on both sides doing probably you know one or two deals a year on that side great thanks I mean I should also maybe give a little background I think you tell as well Inc you tell is a strategic investor we invest on behalf of several agencies in the US intelligence community so we're actually founded in 99 so been out this for a while as well specifically by CIA to do investments on their behalf we now represent about 10 different agencies including Department of Homeland Security defense intelligence agency in a National Security Agency and a couple of others well we have we invested a number of things cyber security is one of as you can imagine one of sort of the key areas that we that we do do investments in in fact a couple other folks up here on the panel as well as as other speakers are former CEOs of companies that Inc you tell has invested in where we're quite active in the in the cyber security space and and if you're not a CEO who we've invested in we're certainly Co investors in in companies as well and from a stage perspective in-q-tel is stage agnostic so we'll invest kind of at any stage of a company usually we're looking for companies that yeah the idea behind Inc you tell is really to find innovation in the commercial sector that has applicability within the intelligence community that could be applied toward use cases in the intelligence community and then to help bring those companies along to get them to a point the product and the company to a point where they can sell into that market so we tend to be kind of at the Series A Series B timeframe but we are also investing in companies that are at more of a seed stage and will invest in companies you know the Series C Series D stage as well and in terms of I was looking kind of through our list we did maybe six or seven cyber security deals last year we don't always publicly announce the deals that we do so the ones that are publicly announced err on our website and I saw that only one of the ones we did last year is publicly announced which is a co-investment with Eligius which is unveil security which does homomorphic encryption really exciting company with a woman founder which I always love to see and also someone who came out of the NSA so you know very deep cybersecurity credentials there so thanks everyone great introduction so one thing I would be interested to see is maybe just sort of show of hands and the audience as to how many people here represent a cybersecurity startup great okay so there's some folks in the out there so feel free to come talk to any of us afterward we're very interested to you know hear about what you're doing how many people are in our represent like a venture investor so a good number as well so we're kind of preaching to the choir here with you guys how many people are later stage investors maybe you know in looking kind of more toward companies on a going public side of things all right so just a couple and how many people here are more from the industry side so companies sis's etc looking from that aspect okay great all right that gives me a good context for some of the questions so we heard from from Dave earlier about some of the areas that he thinks are of interest you know looking at kind of the gaps between the offense and the defense and in terms of where there are opportunities so what I'd like to do would be just to kind of go down the panel and maybe you can tell us a couple of areas sort of like you know hot or not right so tell us a couple of areas of in the investing realm in terms of where you see 2018-2019 you know maybe in the next couple of years what do you think is hot and you know in terms of things that you guys are looking toward as interesting investment areas over the next couple of years and what do you think is not you know so what's wired what's tired what's hot what's not so well actually we'll we'll start with deaf this time and kind of bring it back to things that are hot I'd probably be a little quiet are things that are not invested in the orchestration automation thing has been quite overly invested in the deception and decoyed market has seen a lot of investment over the recent years there's a lot of things out there that I've seen a lot of investment dollars yeah that have been conflated their markets potentially saying since it looks like there's a lot of entrepreneurs in the audience and please as Katie mentioned love to talk after the session I think for us in terms of cybersecurity almost our whole fund is really some component of kind of AI machine learning deep learning application and I heard some snippets from the earlier panels that are really allowing automation the scalability you know greater speed and optimization across different verticals whether it's in a digital space whether it's in the you know enterprise mobile social and then specifically around cyber so I think broadly speaking we love to see that kind of infusion of you know AI machine learn deep learning that's going to create a lot of intelligence it really screams out of you know just you know AI machines are so perfect for anomaly detection so any of these different characteristics where you're just as I see so you're just drowning in this a manual process that couldn't be automated with you know machine learning you know deep learning for us makes a lot of sense and we get excited about looking at that that's that's number one that's hot now that's new well we've been investing in the last few years but it's like 2010 so I think that and if you look at the dollars again I'll probably misquote but you know it was about a billion growing maybe seven or eight billion last year in the deep learning machine living space around some of these cybersecurity applications so I think there's still a lot more upside in opportunity number one number two maybe this will make you happier I think there's a lot of anticipation around specifically IOT cyber security and there's something like by 2020 twenty five percent of all enterprise you know breaches are gonna be IOT related so you know we think that that is an area that's still in the relatively nascent stages and there's opportunity for investment I think third really verticalized applications as I touched on sort of before around Medicaid I think that many of these applications need to be customized for verticals they can't just be broadly applied necessarily across you know financial services insurance healthcare etc so I think we're gonna see you know more of that as well so those are some things that we're excited about within cyber and again cyber is relatively speaking in terms of IT expenditure is a relatively nice market we are still very broadly focused as a you know investing in early-stage technology yeah hot and not is definitely a fun question so everybody has legacy stuff so anybody who can make cyber hygiene easy for legacy things so patching authentication you know making these big crunchy or soft on the inside crunchy on the outside networks a lot harder to hack definitely good so you know we're seeing a lot of interest in new types of patch management new types of security on the inside things like zero trust moving target defense that that kind of stuff I'm also seeing a lot of interest outside of the u.s. in you know trying to keep the NSA out of stuff rights people want encrypted communications right they can't just you know they can't just just trust the major chat vendor of the day so they want to have their own sort of calm Center own control of those kind of things that's all hot what's not again and points I think AI I've been pitched probably maybe 2025 endpoint AI next-generation sprinkle whatever you want in there OS query you know blockchain you know that kind of stuff I'm not gonna see I just don't see it happening and then a hot area I think everybody says the cloud what does that mean you know is it collecting telemetry from your SAS applications I have yet to see sort of the hunt teams hunt on Salesforce telemetry logs or hunt on you know Dropbox logs right it's coming but it's not really there yet and there's companies in that space I'm not gonna say it's hot it's hot for me and so I think that's where you know some of these adversaries that Dave was talking about might be operating undetected and this should turn into decent investments so so my my dear partner Dave kind of give away our playbook in terms of what we think is hot I'm not going to say a lot more about that but I but I will say one of the things that we do and I sort of alluded to this earlier the great thing about the venture community is it will over capitalize in equality opportunity and as a result we've got 3,000 companies and Dave talked about some of the some of the metrics in terms of how many of those companies will actually turn out to be reasonable exits Jay talked about sort of the 300 million dollar threshold 150 to 300 being sort of a nominal a valid point the things that we tend to look for things that are truly disruptive and where we draw some of those insights from is our understanding of offensive tactics and maybe it's a reflection to the background of our team and where we come from but we actually think that offensive techniques and tactics inform where defensive solution should be built and so if you look at what we do at data tribe for example we draw from principally from the NSA principally from offensive teams because eventually those those techniques will be distributed proliferate through the hacker community it will not be coming more broadly disseminated and that will be the next way but if you will of threat vectors so we tend to live there we also tend to think about data science a lot a lot of what we're doing today is sort of analogous to a dyke with a thousand leaks in it and everybody's running around with a thousand fingers trying to plug the holes that's necessary that's not how you get ahead of this at the end of the day the way you get ahead of this at the end of the day is thinking about how do you stop water from coming through the dike and those are data science problems good you mentioned in vail homomorphic encryption a great example things around data provenance will turn out to be really really significant sort of methodologies tout a better managed data to build inherently more secure systems in terms of what's not very interesting today world doesn't need another threat intelligence company I don't I don't care if you're 10 or 12 percent better than everybody else out there we have too many undifferentiated me two companies that have attracted a lot of this capital and the challenge of course is it just raises the stakes and the cost of being successful for everybody that's doing things that are truly disruptive so for us you know the fundamental question we ask every time we're looking at anything is does this fundamentally change the game not in an incremental way but does it fundamentally change the game and as you look at that you you've got to be willing to think outside the box a little bit if I go back five years ago talking with a team that started carbon black you know great great pedigree with that team and looking at endpoint and when they talked to the venture community what they kept getting back is nobody wants another endpoint nobody wants another endpoint until the market took an endpoint public last week you know five years later so you know the cyber is one of those domains where I think unconventional wisdom is the better way to go conventional wisdom tends to be over capitalized tends to be undifferentiated and it being teams yeah tends to be pretty pedestrian and its potential applicability and the ability to create value long term it's the unconventional wisdom that really comes from deep proprietary insights into how these threat vectors actually develop and evolve is where you really begin to identify things they're gonna be meaningful yeah that's great yeah and and you know just to kind of pull on that you know 400 cybersecurity companies got funded last year not sure how many were out there looking for funding but you know in insecurity in particular it's very very hard to sort of rise above the noise and it's very hard as a start-up to show value quickly to to convince you know sis those who have dozens of security products already in the organization to then to add another one so one thing I want to ask again and I'm just going to throw this one out to the whole panel as well which is you know from the perspective you know some of you it seems like most most the folks up here are kind of more earlier stage investors so sort of seed through you know Series A Series B and and when you answer this question please kind of maybe give an indication as to which stage you're talking about because it really does make a big difference in terms of the answer this question but what are the what are the things that you are looking for when a team comes to pitch you and you know most of us have heard four or five at least companies sort of pitched the same similar type of idea the same you know the same space generally what are the types of things that make a company kind of rise above you know at the seed stage at the series a at the series B that make you excited about doing an investment and you know some of the things I'm thinking of that maybe might come up is you know it's a horizontal kind of play you know looking kind of doing something that fits across all different kinds of industries something that's interesting or are you more interested when there's a real targeted kind of vertical go to market opportunity there how much does location matter how much does the background of the team matter so I guess we'll start off with you again Bob just mix things up so it you know I think I think you know the question framed in terms of stage you know is is absolutely look at again data tribes where we start companies there's both pedigree of the team you know we draw principally out of government research labs these are subject matter experts that have been operating on the offensive side for a number of years so there we're going after subject matter expertise domain expertise we understand that the idea of building a business is a new idea and we understand that we're gonna have to augment their domain expertise with company building experience if I jump out to the things that we fund in Silicon Valley there's a well-established Silicon Valley playbook about how to build a company what is not as well established is deep domain expertise not to take too much away from the valley but those government labs I always joke that you know government innovation is an oxymoron unless you're talking about cybersecurity and data science and then the labs are material ahead of industry by five to seven years I would say which is why we tend to look for disruptive innovation coming out of those labs when you get out to the valley there's a playbook around building companies so we shift our bias a little bit in terms of the questions we're looking for and you know there's gonna be a little bit more focused on pedigree of the team because pedigree and cybersecurity for us is absolutely everything you can't learn fast enough to be competitive in this space you know and that's one of the things like a lot of entrepreneurs attracted to the market learn the hard way and frankly they learn it with capital from venture investors who learn those lessons the hard way as well so we tend to look for domain expertise and what we'll look for within those companies is how fast can you get traction in the marketplace if you have the domain expertise you know is this gonna be an educational sale that's going to take a year or what's the time to value and we're looking for short time to value in those more mature companies because as Dave talked about earlier you know you have your moment in time there is a window of opportunity how fast can you get traction expand within that window of opportunity is essential to sort of your competitive posture in the marketplace you know location turns out to be pretty important for us today you know one of the themes you know particularly with early-stage companies is everybody's virtual today I don't buy I'm a next CEO don't do companies let me tell you right now I think it's total you cannot schedule the aha moment on a clock it's called once a week or twice a week or everyday proximity matters you need to be around the table you know kicking around ideas when that aha moment comes together that really is a spark of genius that allows a startup to establish traction in the marketplace and begin to build so we do look at location in a pretty significant way in terms of where is the team data tribe you know our teams you know everybody has dispersed after the NSA and it's like you're all coming home you got to build a company with us you're all moving back to Columbia Maryland and that's we're gonna do it you're not gonna phone it in same philosophy when we're out on the west coast I think one of the real big challenges we look at is is how big can the opportunity be again you go back to the to the math that's been talked about twice this morning 150 to 300 million dollar exits for the vast majority of cyber security companies if you're gonna be at the high end of that range or higher you better be doing something broadly horizontal it doesn't mean niche things aren't important they're very very important but they don't drive venture economics and as a venture investor we're looking for things that have broad horizontal applicability where we have a higher probability of being at the high end of that exit range to generate the returns of anything you know size of opportunity pedigree of the team need to be all in the same location anything they're wrong that you want to agree or disagree with or I think I think Bob speaks the truth right I mean for me for me personally if I have a strong signal on the technology if I just think this technology is something I've fall in love with I think it's gonna go but the team can't take it to market they're not gonna grow with it it's a bad deal I'm not gonna not gonna do it same thing if I love the team and I can work with the team and help mentor the team but their technology vision stinks or it's not a product people really want it's kind of hey nice guys ladies whatever you know we're gonna do it I like to see both you know is it timing is it to the right team and can we can we work together and then for me personally it's it's all about expectations we're not writing you know the kind of checks at these 300 million 500 million dollar so can we bring with this team another one of those investors to the table that's something we've been trying to specialize in and a lot of times based on the country or the people or the background you might take certain in Dustin's completely off the table because they're conflicted out or things like that so that factors into our calculation quite a bit yeah so just maybe two things I would add to as a firm were geographically agnostic so you know our team the bulk of our team sits in Silicon Valley we have an office in Tel Aviv I'm here in New York we spend a lot of time on an airplane and you know the joke until offend Valley is they don't want to invest in a company unless it's a bike ride away from you know the Robbins is so we have that flexibility and that proactive approach and to for example invest in cybersecurity and to completely ignore the Israel market early stage to us just doesn't make sense so very frequently we're looking at a cyber company in Israel from the East Coast or Europe and then Silicon Valley as well and trying to invest in the best and the brightest second point I would say is one of the things that we've done because we're such early stage investors is we've built out really over the past 20 years a network of CISOs and CIO is really c-level executives across about 125 organizations globally and we sit down and talk to our counsel on a formal basis New York San Francisco we have lunches every quarter a dinner you know once a year on each coast and then informally any time we're looking at opportunities so part of our investment and due diligence process is really putting these prospective you know companies in front of that CIO you know so network so it's it's especially if you're you know young Israeli startup with an idea and you know you're trying to access the market here in Silicon Valley or you know in the US market and we can you know put you in front of dozens of heads of IT across you know the enterprise that's proven to be you know quite differentiated and valuable and so the earlier coming it really helps accelerate the sales cycle and the process of getting these companies out in front of that such an extent there are sees those here or SEOs here happy to talk to you after the session we continue to grow out that Council on network and it's it's really proven invaluable and it's an amazing asset for us as a firm so I'll answer this book from like a personal perspective and also from a Cisco perspective you know Cisco similar to I don't know the DMV or UN or Congress or some other dysfunctional body where there's so much there's a lot of different opinions across the team that all have input into the process and it is a long and expensive process and my personal views don't always necessarily coincide with that with some of the sort of the greater ideas so something horizontal wise versus and sort of infrastructure wise changing the world is something that you know probably Cisco thinks a lot more of personally I I think things that are incrementally valuable is something that's more achievable and has a more more propensity to become successful some of the things that you know Bob mentioned you know location and geography personally for me I don't agree with the geographical proximity of everyone having to be together yeah but the core guys on the initial idea at the very earliest stage of seed but as we grew you know we were almost a completely virtual company we got to get every six months and you know we did okay in that regard but for someone like Cisco it is important to have folks and have center of masses where people are located so they can communicate and do the things and have those you know in-person types of meetings quite a bit so you know they're there's a varying degree of things that are interesting and in Cisco sort of doesn't look at that lens is like a unified you know this is the only answer that'll happen you know we do go in niche we do like infrastructure things that are more broadly speaking and I think that that's a good point it's sort of in in some ways whether or not you as a team think it's achievable to you know have a distributed team and not all be in the same location together if you're out there raising money one thing to consider is the fact that some investors I think that's really important and it you know it may it may affect who ends up being able to invest in you and and that sort of thing but that's nine things that you also do the pedigree of the team I think God is critically important because you know you're gonna build a widget or something bigger and it's gonna be great today or needs to get better but there's always things that are gonna you know throw a curveball at the company and the team that sort of has a good understanding has a good chemistry is so critically important some of the things where I'll disagree or you know things that are to gov a focused leadership that's maybe too academically inclined I kind of personally I think you know the hustle factor and people working in commercial markets and understandings from the speed of business is pretty darn important words some of the academic and govern areas maybe lack some of that that fire to get things done in the short term but so in terms of location I can't remember who it was who mentioned that seventy I think it was Bruce you mentioned that 70% of the investments in cybersecurity are in the Silicon Valley Inc you know in California um cyber cyber yeah sorry cyber and you know so Inc Utah is based in the DC area I'm in our California office so we do have an office in Silicon Valley it sounds like a few others have kind of multiple locations as well but I but here we are New York New York it you know is has not so far been a real locus of social cyber security companies but you know there have been some good successes here there's a close tie or a close you know closer proximity to Israel where there's a lot of companies being generated or being being founded so I'd be interested to hear maybe you know Bruce and and Bob and whoever else wants to kind of jump in on you know kind of Duke it out is it is it where is cyber talent coming from is that the DC area is it is it New York do you think that that locus of is gonna move from Silicon Valley to New York or DC or you know with obviously Israel is continuing to be a place there but you know I think I think when you look when you look at cyber and you look at data science this is fundamentally about the people and if you buy my premise that you know it takes expertise to succeed this business because things move so quickly you look at where the concentrations of talent are and so you know Israel for a lot of obvious reasons Maryland for a lot of obvious reasons there are clusters that have developed in Atlanta there there's a cluster that's developed in Texas there's a little bit going on in Pittsburgh around CMU you know principally around a professor I really think in the case of one particular individual and then you have Silicon Valley and so you know our rule is looking left you stood on the wall again toe-to-toe with the bad guys and walked away with their head you don't know you know and so you start looking at where is that expertise and that expertise is concentrated in very specific geographies and that's where the business grows up around and then you start digging a little deeper you know in terms of you know where is the cutting-edge innovation you know yeah well you have a lot of folks that have the pedigree that we look for in Silicon Valley but they are a little more on sort of the incremental you know incremental innovation side of the equation we're interested in that you know as long as it's massively disruptive if you look for the really disruptive things you get closer to some of the labs where people have been doing research over an extended number of years that you can take advantage of as opposed to I mean if you look at homomorphic encryption nobody in Silicon Valley is working on homomorphic encryption this isn't a science project for 20 years that's taken massive investments in world-class mathematicians to crack the code that is not a venture financeable project from inception you know when it gets the point where the math is proven and it works then it becomes investor investable you know but that was kind government research program or out of IBM or a little bit of what the guys at Microsoft are doing some brief comments so it's even when a tenable when we raised our first around which was 50 million dollars when we were talking to people they said well you're like that government contractor they had no idea that we were doing about you know almost twice as much as that revenue and and that most of it was commercial and you know so if there's ever an investment opportunities at DC region there's so many people who have no idea how to go to market how to pitch a product or do anything like that and these are basic investing things but the talent that Bob's talking about it's it's there it's one of the big reasons I left temple to go do google attack adventures a lot of our companies are in that area and they've got that opportunity and they need our help and I think as an investor if you're looking at companies out there you should take a second look at that region I'm gonna amplify that point David's work real quick three and a half times as many cybersecurity engineers in the state of Maryland in the state of Virginia than the rest of the US combined this was this was about Talent I think we're kinda missing the point though I would tweet Katie's question a little bit having actually lived in all three geographies for the past 20 so when you can't win you reframe the question so having again lived about 20 years in Silicon Valley lived in Israel for a couple of years living in New York for the last three years I think the commonality of all of these companies is regardless of whether they're coming from Montreal or you know New Mexico or Utah or Silicon Valley or tel-aviv or Berlin they're all passing through New York they're all passing through Silicon Valley you because you know it's the old joke you know you know where do you know where why do you you know go to the bank to rob you know because that's where the money is at you know that's where everyone's going so I think all of the entrepreneurs that we end up meeting you know even you know I haven't had to go where the mid-atlantic Boston DC all the firms in Boston or opening up New York offices they're coming here to me it seems like clear at this point after about a decade of back-and-forth New York is that hub for the East Coast Silicon Valley is that how West Coast I'm in Tel Aviv you know it is amazing I think it's gonna change it's only gotten better over the past 25 years so I think those are the major hubs of innovation and and that's where the VC is reside and as long as you know folks need the dollars and they need the customers they're always gonna go there so again we're agnostic I don't really care if the technology is if the team is coming out of you know again Berlin or Hamburg or you know Toronto or Vancouver or Silicon Valley they're always gonna go through the markets that we sit in and and those opportunities that we see now I personally think there's you know a high amount of noise to sort of signal ratio in some of those regions you know you know I just closed an investment in Silicon Valley that I led far team out on the west coast even though I'm sitting here in New York and the investment before that I led was out of Tel Aviv I still think it's amazing being in New York because 80% of my portfolio passes through New York you know every month or two and so we're touching those companies helping them get in front of Wall Street and you know that may be the AdTech kind of ecosystem or whatever it might be so that's how I would sort of almost tweak your question a little bit of it's it's a little bit less important where they come from but are they you know willing to help on a plane go to where the markets are and can they build an amazing you know we don't care if you're based in Chicago as a team of entrepreneurs but can you grow that company to be a five hundred million dollar plus company and have the talent in Chicago or in Montreal or whatever whatever the city is that you know wherever you want to build your company and if the answer is yes then great we don't really care we're happy to get on a plane many of my colleagues you know will move that company we're not fun that company and require that company and Silicon Valley grew I get it you know it's just that's not how we roll as a firm that's again maybe one of our differentiations and I think you know the world is flat and so there's a little bit of sort of hubris and arrogance you know in the Bay Area of like hey you know everything the Sun rises and sets here in Bay Area the bear is amazing you know I miss it I love it you know I sold my home there and I go there pretty much every month but there's a lot of innovation going on in other places around the world and you know we like to be receptive to that you know as an early-stage venture permanent again we may not you know end up investing in that company from Santa Fe or coming out of Los Alamos labs or wherever it might be you know Livermore but the point is I think we want to see those opportunities to really make an intelligent evaluation and say okay we believe you know to the earlier point like this is the right team this is the right technology this is the right market and and you know ultimately invest in that company yeah this is great actually I think we're gonna have to wrap it up unfortunately we could keep going on and on two comments one Ron had a a round at 50 million that's pretty impressive I'm not gonna caught that and B you commented that you had a shadow a B you said that there was you you had you around I match up is a great story of go to market or poor story go to market but you had such tremendous revenue but you have to explain left is what you guys are doing you explain the story three words it just talks to the incompetence of UC community right I'm just gonna agree with you yeah so definitely you know plenty of disagreement among people all investing in the same space obviously the sunsets are better in California all roads lead to New York the earth is definitely not flat facts matter but I appreciate you guys your time up here and I think hopefully this was was valuable and you know anyone who wants to come and find us at the break please feel free to do so Thanksgiving you