Richard Seewald: To Defend and Protect What Matters Most

Software has had incredible impact on our society and has transformed the way we live. Think about the creative process of taking an idea that is born out of the desire to improve something, then, writing code to enable an algorithm that becomes a product and building a business around a product that goes on to change the world. When software products touch the real world, things get better, less expensive, more efficient, and more adaptable. All of this without having to build many of the physical trappings and fixed costs that businesses have borne in the past. The result is an ecosystem of fast growing, scalable and high margin business that change the game. Factor in cloud computing, high speed internet, machine learning and other digital technology and the benefits of software multiply many times. 

The creative process of building these types of businesses is a recent phenomenon and we are in the early innings of a game where software and digital technology will continuously redefine the world. Every day, we witness numerous examples of how digital technologies are responsible for the birth of new industries. Fintech is a good exampleas are examples of where software and digital technology help protect human rights, enable better governance, and power sustainable development for the benefit of society.

In the complex world that we live in, the reality is that software and digital technology underpin and power the infrastructure our society is built on. In general, our society is better off because of this and there is only one direction we are headed - a more connected and increasingly digitalized world.

There is a big caveat, however, that we should discuss. The benefits and efficiency gains of a digital world go together with material risks that will continue to challenge us. Cybersecurity and the technology that safeguards our digital world are essential to protecting our businesses, governments, infrastructure, and personal digital lives from a myriad of threats to our society.

Think of our digital world as a sprawling estate where our data, software, cloud infrastructure, hardware and devices reside and are connected and are interoperable on the backbone of the internet running at increasingly fast speed. This estate is rapidly growing and is distributed terrestrially and extraterrestrially via satellite networks and on the blockchain. To protect this sprawling estate, cybersecurity technology is deployed on networks, in the cloud, on endpoints, devices and amongst other uses. While this is an oversimplification of the cybersecurity stack, it illustrates how our digital world operates.

The nature of the threat that continuously seeks to attack our estate includes malicious cyber acts intended to steal valuable data or disrupt and damage the wellbeing and stability of our digital infrastructure. The perpetrators of cyberattacks range from cybercriminals and hackers that run commercial operations and profit from cyberattacks and fraud to adversarial nation states that seek to effectuate geopolitical goals. The impact on our society is far ranging and I will only cover a few examples. It is important to remember that asymmetric relationships contribute to cybersecurity failures and the likelihood of an attack. This concept is often described as the scenario where the attacker needs to be right one time while a defender must be right every time. The bottom line is that we are prone to cyberattacks and will be for the near future.

With respect to our critical infrastructure including energy and electricity grids, the disruptive potential of cyberattacks targeting connected industrial systems includes disruption of service, physical harm, social unrest that could challenge the stability of governments. Hospitals and our medical infrastructure are prone to this scenario. Simply said, when the lights go out, all bets are off.

The impact of misinformation campaigns, deepfakes and other manipulative cyberattacks targeting elections
and the process of western democracies is an ongoing threat. We are prone to a particular brand of misinformation via social media as is our most valuable resource – our children.

Ransomware is a type of malicious software, or malware, that prevents you from accessing computer files, systems, or networks and demands you pay a ransom for their return. Ransomware attacks can cause costly disruptions to operations and the loss of critical information and data. To put it in context, ransomware will cost its victims around $265 billion annually as we move through this decade with a new attack every 2 seconds as ransomware perpetrators progressively refine their malware payloads and related extortion activities. Ransomware payments are typically made via cryptocurrency transactions on the blockchain which we will discuss later.

Bottom line, the attack surface of our estate is continuously expanding and as the number of connected devices, cloud deployments and networks grow, the playground for hackers, criminals and adversarial nation states gets equally larger.

Our team has had a front row seat in the development of the cybersecurity industry over the past 30 years. First as investors and executives at AVG Technologies, a cybersecurity software company that we took public on the New York Stock Exchange and that eventually was acquired by Avast Software. We have contributed to the industry as investors, operators, technologists in commercial enterprise as well as government. The team of twenty-five professionals at Evolution Equity Partners brings unparalleled experience in the industry that enables us to offer a valuable partnership with fast growing software companies that are seeking the knowledge and expertise we bring as a team. We stand on each other’s shoulders and operate as a team in an organization that we believe is best of breed in the industry. The quality of our portfolio and the continued support of our global investor base is demonstrative of our success.

The mission to invest in world class cybersecurity companies is an international endeavor and Evolution is the only global cybersecurity investment platform. We have teams in New York City, Palo Alto, London, Zurich, and significant investment in Israel. Most of our competition in cybersecurity investment are comfortable operating out of one of these markets. From the very start, we were a global investor, very aware that the demand for cybersecurity technology is handled differently in global markets and that we had a significant head start over any competitor as a result of building cybersecurity companies ourselves and operating in international markets beginning in the 1990s. With that, we built the infrastructure, network, and human capital to sustain leadership. We are first and foremost an investment firm, that leverages the operating, technical and domain expertise of our team. Many others flip that equation and run their organizations counter to the way great investment organizations have been built. The depth and breadth of partnerships, network, track record and expertise in our markets over 30 years is coupled with a team that consists of J.R. Smith, former CEO of AVG Technologies, Taher Elgamal, CTO, Security at Salesforce.com, Karthik Subramanian, former head of corporate development for security at CISCO Systems, Phil Quade, Senior Executive, NSA and CISO at Fortinet, Karel Obluk, former CTO of AVG Technologies, Michal Pechoucek, CTO at Avast Software, Yuval Ben Itzhak former CEO at Social Bakers, Sylwia Hadaj, a leading venture capitalist in Europe and relationships with partners in the United States, the United Kingdom, European Union, Australia, Canada and New Zealand.

The role of a leader in our industry is multifaceted. First are the founders and entrepreneurs who build software companies that we invest in. The leadership skills that are required to be successful are diverse and often are learned and refined while building a company. One of the most important attributes is the degree to which a leader is coachable and open to new learning opportunities. It is a frame of mind that you often hear associated with high performing athletes and that is essential for success as a leader of a company experiencing rapid growth and technology development, an intense competitive environment for talent and demanding customers that expect best of breed product. Another aspect that we see in strong leaders in our industry is the ability to articulate values and demonstrate alignment with values while operating day to day. In the end strong leadership boils down to the ability articulate where an organization stands today, map where the organization is going tomorrow and articulate and execute upon the plan of how to realize these goals.

As to the venture capital industry, many of the attributes described above apply and I will add one more. Investment leaders have the uncanny ability to see around the corner, catch glimpses of the future, understand behavioral psychology, understand technology change, and apply investment discipline to address a white space in the market where there is ability to build a material business that changes the world.

I am proud of the companies that we have backed and always feel honored to be working day-to-day with some of the best entrepreneurs and companies on this planet. I will talk about three.

SecurityScorecard is a New York City based global leader in cybersecurity ratings with over twelve million companies continuously rated, operating in sixty-four countries. The Company make the world a safer place by transforming the way companies understand, improve, and communicate cybersecurity risk to their boards, employees, and vendors.

Quantexa is a London based leading decision intelligence company using AI & network analytics to uncover hidden relationships among organizations, individuals, and behaviors to defend and protect against financial crime and fraud.

Solidus Labs is a New York City based automated market surveillance and risk monitoring platform tailored for digital assets. The company protects against price manipulation, hackers, and fraud on the blockchain.

I have been in the venture capital and investment business for over 30 years and would say that the challenges that have taught me the most have come in times of crisis. I’m proud of our team’s ability to work through difficult periods while running companies and working to utilize operating expertise, technical and business acumen to produce extraordinary outcomes notwithstanding where we are in the economic cycle. In the periods right after 9/11, the 2008 financial crisis and COVID-19, Evolution gained a wealth of experience that puts us in a unique position today as a team. Organically, we have built a culture of learning and winning. This sets us apart from many others that have not had the opportunity to grow as a team over decades, operate as investors across multiple economic cycles, learn from mistakes and experience the wins. I take the most pride in the development of our team.

Some of my earliest recollections of influences that shaped my views are from the summer of 1969 when as a little boy living and growing up in New York City, I became fascinated with the Apollo 11 mission that first landed humans on the Moon. Science, technology and wonder for the future were preoccupations that took up my time during that period and still last till today. Most important was the realization at a very young age that anything was possible and that the realization of a dream of putting a human on the Moon could be analogous o other goals one might have. Notwithstanding slim odds of success, I also watched the 1969 New York Mets win the World Series. A feat that many believed more unlikely than putting a man on the Moon. Believing in a dream and in one’s ability to achieve are by-products of having exposure to this unique time in our history during a very influential period in life when the impossible became possible. I am privileged to have experienced this and it lends to the frame of mind I carry today.

Based on how I answered the last question, you know where this is going. I am a technology optimist. Science and technological development are a natural progression of humankind that will generally benefit society. We started our discussion around how software has had incredible impact on our society and has transformed the way we live. This phenomenon will continue to reshape our lives in the form of medical advances, better communication tools and positive impact on our democracies amongst other areas of disruption and development. Albert Einstein commented that the world would not be destroyed by evil people, but by those who choose to ignore the evil. Digital technology can provide tools for better public discourse and result in improved accountability of governments. Through the development of cybersecurity technology, Software and digital technology will continue to help defend and protect what matters most.

The advice that I give to my children regularly, is to be savvy consumers of technology. I not only give them advice; I enable them to better understand the advantages and disadvantages of technology and to gain the street smarts necessary to navigate the exciting but uncharted waters of the next generation of technology development. No doubt there are challenges around the ethics of areas like machine learning and artificial intelligence that will take the collective brain power of the best and brightest to solve. We could spend days on that topic alone. In the end, we will prevail and good will overcome evil!