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Effectively Assessing Cyber Risk To Help A World-Class VC Firm Make Informed Decisions

An International Venture Capital (VC) firm recently acquired a series of technology companies, with a variety of exciting features and underlying technologies.  The acquired company’s environments were expanding rapidly without oversight, and the manufacturer lacked visibility into the risks surrounding it. The Private Equity firm needed a team of cybersecurity experts to conduct a cybersecurity risk assessment and report to ensure it understood areas of risk across its portfolio as the threat of cyberattacks increased amid COVID-19. 

The Challenges

With devastating data breaches in the news and complex cyber threats emerging every day, the VC firm was concerned about the vulnerabilities and risks this new series of acquisition had created for its investment portfolio.  They were mainly concerned about the intellectual property and trade secrets related to its unique companies.  

Given the increasing emphasis on cybersecurity and the heightened risk of cyberattacks, the VC firm needed to evaluate the existing security governance and identify the activities required to reduce risk across its portfolio. 

The Project

The VC firm strived to take a proactive approach to riskmanagement and corporate governance, with a dedicated riskidentification culture at the parent level and within its portfoliocompanies.  Through conversations with board membersand the Valorr team, as well as continued educationand training, the firms’ executives understood potentialcybersecurity risks and the challenges for private equity groupsand public companies. 

The firm decided to take action, and put an emphasis on cybersecurity to protect investments both at the parent level and within its portfolio companies.  Therefore, the organization sought an advisor to conduct a cybersecurity due diligence assessment to proactively add enterprise value, save money and time in the long run, and defend investments and reputation. 

While the initiative was driven from the parent level, the firms portfolio companies also recognized the importance of a dynamic cybersecurity strategy. Subsidiaries were very receptive, open and committed to enhancing security measures. 

The Deliverables

Following the assessment, the Valor team presented key findings to the firm’s key executives, its board of directors, as well as the management teams of its portfolio companies to help enhance their cybersecurity posture and protect the company’s investments.  The top cybersecurity risks and potential emerging concerns were ranked and detailed, as well as suggested policy improvements, including defining authorized roles and security processes for third-party vendors. 

The Results

Valor’s cybersecurity due diligence assessment helped the firm develop an effective cybersecurity program at the parent level and within each portfolio company.  With its strong risk culture, the firm identified Valor as a key resource to proactively address and mitigate emerging cyber threats. The Valor team understood the risks for private equity groups, and analyzed the organization, presenting clear findings of potential risks within the organization and suggestions to address vulnerabilities and protect investments. 

Key benefits of Valor’s assessment for firm included: 

  • Increased cybersecurity awareness from the parent level to individual portfolio companies 
  • Stronger insights into the risks at smaller portfolio companies and how hackers can infiltrate private equity groups 
  • Targeted insights into key risks and potential process and policy improvements 
  • Enhanced internal audit exposure to key risk areas for SOX compliance efforts 

Featured Services

M&A Cyber Due Dilligence Assessment

Valor works with private equity firms and leaders of portfolio companies to help them achieve greater confidence in this changing environment, with the necessary risk information to make more informed investment decisions. Our M&A Cyber Due Dilligence Assessment provides you and your team with the insight you need to build a strong, sustainable cybersecurity program, internally and across your portfolio.