The Unicorn Trap and how it is failing the cybersecurity industry.

In 2021, a former four-star general and the ex-director of the NSA took a cybersecurity company public at $3 billion of valuation.

The board read like a Pentagon reunion.

It was full of stars.

The pitch was a private sector NSA.

Two years later, that same company was bankrupt.

The NSA had quietly told insiders all across the Beltway that the product wasn't, quote, credible.

And the founder, the general, admitted to Bloomberg that he'd been, quote, naive about the business world.

Investors lost almost everything.

That company was IronNet.

That same year, a cloud security darling called Lacework raised 1.2%.

$3 billion at an $8.3 billion valuation.

Three years later, Fortinet bought what was left for somewhere between $2 and $230 million.

That's not a typo.

They raised $1.8 billion over the company's life and exited for roughly 10 cents on the dollar.

What a return.

Let's talk about Cyber Reason, $3 billion valuation in 2021.

$300 million a year later, 12 months, a 90% haircut for everyone involved.

Again, awesome.

This is not a run of bad luck.

This is the VC model working exactly as it's been designed.

And today I'm going to walk you through what the math and the receipts say and why the venture capital structure that funds this entire industry is the reason that we can't stop modern threat actors.

In 2021, a former four-star general and the ex-director of the NSA took a cybersecurity company public at $3 billion of valuation.

The board read like a Pentagon reunion.

It was full of stars.

The pitch was a private sector NSA.

Two years later, that same company was bankrupt.

The NSA had quietly told insiders all across the Beltway that the product wasn't, quote, credible.

And the founder, the general, admitted to Bloomberg that he'd been, quote, naive about the business world.

Investors lost almost everything.

That company was IronNet.

That same year, a cloud security darling called Lacework raised 1.2%.

$3 billion at an $8.3 billion valuation.

Three years later, Fortinet bought what was left for somewhere between $2 and $230 million.

That's not a typo.

They raised $1.8 billion over the company's life and exited for roughly 10 cents on the dollar.

What a return.

Let's talk about Cyber Reason, $3 billion valuation in 2021.

$300 million a year later, 12 months, a 90% haircut for everyone involved.

Again, awesome.

This is not a run of bad luck.

This is the VC model working exactly as it's been designed.

And today I'm going to walk you through what the math and the receipts say and why the venture capital structure that funds this entire industry is the reason that we can't stop modern threat actors.