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Where did you take yourself on vacation at 17? How about Paris, Italy, Spain, Germany, New York, Florida, New Mexico, Thailand, and Dubai?
2025 was a record year for startup funding. Crunchbase reports venture capitalists and growth investors dumped $425 billion into more than 24,000 companies last year — a 30% increase over 2024. So far in 2026, investors seem to be continuing that trend.
While the influx of capital is a positive turn of events, it also comes with a hidden risk, which, if left unaddressed, could force startups to shut down before they reach IPO.
Back in 2022, funding for startups dried up, and companies cut spending on anything that wasn’t mission-critical, including security programs. This left companies exposed to risk, which is starting to grow as companies raise funds again.
So who is at risk, what does that risk look like, and how do founders eliminate that risk as they attempt to get their businesses off the ground? Here’s everything founders need to know about their cyber risk — and how to mitigate it.
Post-COVID, startup capital was scarce, headcounts were lean, and survival was the priority. Security programs were, understandably, cut because startups couldn’t afford preventative software and services, nor could they compete with larger organizations for expensive security talent.
But now that funding is flowing again, it’s time for founders to take another look at their security programs. Not only are startups open to a very real danger, but as funding increases and companies start to grow, so do their threat landscapes. And this risk is real for both startup and growth-stage companies.
There is a common misconception that attackers won’t touch small companies because they prefer to focus their efforts on large organizations or companies in specific industries. This is entirely untrue. Attackers don’t discriminate — mostly because they don’t have to.
Bad actors, especially ransomware groups, run automated attacks that launch every few seconds. CrowdStrike data shows an 89% increase in attacks by AI-enabled adversaries since last year. These hackers can attack hundreds of companies at any given time, and they’re typically looking for the easiest entry points. Very often, these are found in small businesses and startups without robust security programs. The payouts may be smaller, but attackers have a much higher success rate when they hit unsuspecting startups.
Rapid growth is the goal for all startups, but growth changes a company’s risk profile. As new fundraising rounds close, new employees are added — sometimes in mass hiring sprees. Because most startups embrace a culture of moving at breakneck speed, onboarding happens fast and might omit in-depth security training. If new hires aren’t already familiar with security best practices, they may be jumping right into projects without adequately protecting the data and intellectual property they’re touching. These employees tend to be a company’s biggest security threat, and each new hire is a fresh entry point that bad actors can exploit.
Of course, growth isn’t just adding seats. It’s onboarding new clients, contracting with new vendors and business partners, and adopting new technology — whether it’s for the entire organization or a few individuals. With each round of funding, startups may also establish new processes and data flows, implement third-party integrations, or open new offices or remote workstations.
All of these changes expand a company’s attack surface — often rapidly — and IT teams may not have the bandwidth or authority to keep the organization secure. Without realizing it, executives have quickly taken on significant cyber risk while they focus on growing the business.
In short, if your company is growing, it’s time to put cybersecurity back on the agenda. The shortcuts that made sense when you had 5 employees and $2M ARR no longer make business sense when you have 50 employees, are signing enterprise clients, and storing customer data on 10 different cloud-based applications. As soon as your business grows beyond a few employees, it’s time to invest in security. Why? Because waiting can cost you.
When a company has only a few dozen employees and minimal name recognition, security might not feel like a priority, especially when the team is working in overdrive trying to launch the business, win clients, and keep investors happy. The to-do list is long, and cybersecurity isn’t a revenue-generating initiative. In fact, it drains resources. So when funds start flowing after a years’ long drought, that’s the last place you might be inclined to funnel those funds.
But investing in a cybersecurity strategy early — before bad habits begin and risks start stacking up — pays off in dividends. It will result in a lower long-term spend than reverse engineering bad policies, swapping out unsecured applications, and uncovering shadow IT. More importantly, it certainly costs less than a breach in multiple ways.
Here’s why a non-existent security program can kill a startup.
Supply chain attacks are increasing, and large enterprises are no longer willing to take risks when it comes to vendors. Many will only consider working with vendors who meet security requirements like those laid out in SOC 2 and ISO 27001. Identity and access controls, incident response plans, and endpoint detection and response software are now table stakes. A strong security posture is no longer reserved for established companies; it’s what could make or break your ability to get clients in the first place.
The last 18 months have been great for hackers. Cyberattacks are up 18% year over year, and preventable gaps like visibility, inconsistently applied controls, or excessive identity trust materially enabled intrusion in more than 90% of breaches. Bad actors aren’t launching more sophisticated attacks; they’re counting on inaction on the part of leadership. That way, they can rinse and repeat the same attacks, use AI to scale their efforts, and continue to see high returns on their minimal investment.
For startups that just completed their Series A funding round, a breach isn’t just expensive — it’s likely the end of the company. According to IBM, the average 2025 data breach cost $4.44M. For some startups, that’s all their capital. For others, it’s such a significant portion that they would have trouble bouncing back. In fact, 60% of small companies, including startups, go out of business within six months of a data breach. Even if funds remain, the cost of remediating a breach isn’t the only challenge. The company needs to devote employee time to fixing the internal issues that caused the breach and earn back trust while also building the brand.
The effects of a data breach can be extremely damaging and long-lasting. Startups are in the process of building trust and name recognition with clients and prospects. The negative publicity of a data breach could kill the business before it even gets started. Plus, there’s no hiding a breach that occurred. Between double extortion attacks and regulations that require the immediate disclosure of a suspected breach, word gets out quickly, and it could cause irreparable damage to your brand.
A comprehensive security program may not be at the top of your to-do list (or on your roadmap at all), but it also can’t wait. The risks are too high, and the threat is too real. Once a startup moves out of survival mode and has funds to invest in departments or initiatives, cybersecurity needs to be addressed.
The best time to build and implement a cybersecurity plan is when a company is small enough to get buy-in from all leaders, train employees, and establish security best practices and protocols that can scale as the company does. Security needs will vary slightly based on the industry and company size, but every organization will need a security program that includes a few key factors.
Many lean startups don’t have the capitalfor an in-house cybersecurity team and program. IT teams aren’t equipped to provide 24/7 advanced threat monitoring and detection and continuous authentication and authorization processes, nor do they have the security expertise needed to develop an effective program. Beyond all of those concerns, security talent is difficult to find and expensive. So, many founders are turning to MDR for their security needs.
Managed Detection and Response (MDR) is a fully managed cybersecurity service that delivers 24/7 detection, response, and remediation at a significantly lower cost than building an in-house team. The security professionals who deliver MDR services have intimate knowledge of the latest cyber threats because they are defending against them every day.
MDR leverages advanced software and technology to ensure any anomaly in a client’s environment is flagged and thoroughly investigated. Monitoring and detection systems run 24/7, and unlike traditional MSPs or MSSPs that simply alert clients when a breach is detected, MDR covers the response and recovery efforts too — swiftly eliminating threats to limit damage should a breach occur.
SolCyber offers startups the ability to stand up an effective security program in weeks. Our fully managed end-to-end cyber security programs offer true protection — and our clients realize a 150% cost savings over DIY security.
If your startup is growing and taking on new risks, contact the experts at SolCyber today to get started.
Photo by Annie Spratt on Unsplash
Where did you take yourself on vacation at 17? How about Paris, Italy, Spain, Germany, New York, Florida, New Mexico, Thailand, and Dubai?
Happy Thanksgiving, wherever you may be. May your day be entirely free from Vogon poetry!
Looking back 20 years, the security industry was vastly different. With so few entry points, organizations needed a two-tier firewall and an intrusion protection system to secure the perimeter of their network. Small and mid-sized enterprises (SMEs) could outsource their IT needs to a managed service provider (MSP), and they would receive an alert anytime an issue was detected. Managing security was a breeze. Then came the cloud, smart phones and IoT devices and the threat landscape expanded—enormously. The move […]
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