September 26, 2023

How large of a deal is cyber safety anyway? It’s no secret founders have so much on their plate. VC’s are now not chopping giant checks, we’re within the midst of a recession, and the pandemic hangover has created operational difficulties throughout the board. We surveyed over 400 VC-backed startups to learn the way they’re coping with the present financial headwinds, and the way involved they’re about cyber safety, among the many different points they’re going through for our new Cyber Safety Report: Startup Version.

Cyber Safety issues are on the rise

Notably, the survey outcomes reveal that greater than two-thirds (68%) of founders have skilled a cyber assault on one in every of their companies. This in all probability explains why the bulk (86%) of founders stated they’ve some cyber insurance coverage protections in place. However even with insurance policies in place, 71% stated they’re contemplating further cyber protections and instruments for 2023.

Considerations about cyber safety are on-the-rise amongst founders, with almost one-third (31%) extra involved about cyber safety threats than a 12 months in the past. In actual fact, 14% extra founders consider they’ll undergo an assault than at the moment final 12 months (36% in 2021 to 50% in 2022).

Cyber security concerns on the rise among founders

Social influences drive selections

The excessive share of startups with cyber insurance coverage can partially be attributed to pressures from buyers and/or board members, as almost half (49%) cite cyber safety insurance coverage protections as required by one or each of those entities. Nevertheless, it’s extra than simply inside elements that drive founders to re-evaluate their cyber danger. Founders report that exterior elements like international occasions are having a marked impact. When buying cyber insurance coverage, founders cite their selections as most motivated by (a.) tensions round overseas relations (40%), (b.) media protection on different firm knowledge breaches (35%), and (c.) managing a hybrid/distant workforce (32%).

We’ve really seen this play out with our personal clients. Shortly after the beginning of the warfare in Ukraine, we noticed a 50% improve within the variety of functions submitted for cyber insurance policies. It additionally exhibits precisely how present occasions are driving enterprise selections in real-time. With elevated protection of the warfare between Russia and Ukraine, it is sensible that founders had issues over potential retaliatory cyber assaults from Russia on U.S. infrastructure and companies.

Laptop monitor displaying green verification checkmark to demonstrate insurance for non-funded tech e&o startups

Is cyber danger on the rise?

Learn our 2022 Cyber Threat Index Report to seek out out what companies are frightened about, how they’re defending themselves, and what the long run holds.

Obtain The REport

Startups get critical about cyber insurance coverage

A majority of startups have substantial cyber insurance coverage protection however are unsure about how a lot danger is really coated. Of founders that stated their firm has cyber insurance coverage (86%), over 52% described their sort of protection as both “personalized to our wants” or “essentially the most complete” package deal out there. But, half of the startups with cyber insurance coverage said that their present coverage would solely partially cowl their danger within the occasion of an assault or breach. Moreover, of these surveyed that lack cyber insurance coverage, the primary motive cited for this was value (44%). (Does this sound such as you? Our team can help you discover cyber insurance coverage at a value that matches your online business).

Trying towards 2023 and past

As founders sit up for 2023, they’re most involved with impacts from inflation (32%), cyber assaults (27%), and provide chain challenges (26%). This represents a shift from earlier this 12 months. In our Startup Threat Index Report performed in February 2022, founders listed their high three issues as inflation, provide chain points, and competitors. On the time, cyber safety didn’t rank.

However now, the highest three “non-negotiable areas of funding” for the approaching 12 months are: product innovation (32%), cyber safety safety (31%), and gear upgrades (30%). This reinforces how targeted founders are on higher defending and shoring up their firm infrastructure and gear.

To search out out extra about how founders are treating cyber protections of their companies, obtain our Cyber Safety Report: Startup Version.