For Vendor Strategy Professionals

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	March 10, 2009 VC Trends In IT Security An Analysis Of 2008 Investment Activity by Jonathan Penn with Thomas Mendel, Ph.D., Reedwan Iqbal

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Executive Summary

VCs generally started the year with optimism. As the economy worsened, however, VCs reacted first by curtailing activities and then by adapting their strategies to the new reality. Fortunately, the recession is affecting IT security less than other IT sectors, and VCs are now starting up their activities again. Most of their attention will go to supporting existing portfolio companies — helping successful ones seize opportunities to expand, and helping the less successful get through these tough times. New investment is picking up again and will focus on virtualization security, providing security to SaaS and cloud services, data security, and antifraud. Established, successful IT security vendors with cash on hand should respond to the changes in VC strategies and the valuation climate by rooting out attractive acquisition targets for measured expansion into new markets or the addition of strategic technologies that will bring competitive advantage.

TABLE OF CONTENTS

• 2008 Was A Reactionary Year For Security Funding
• 2009 Will Challenge Startups And Second-Tier Vendors

RECOMMENDATIONS

• It's A Buyer's Market, But Shop Wisely
• For Companies Dependent On VCs, Capital Planning Becomes A Survival Skill

WHAT IT MEANS

• These Are Tough Times For Security Innovators
• Supplemental Material
• Related Research Documents

This is an excerpt

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