Cyber ​​Risk Report 2022: How Founders Are Addressing Cyber ​​Security in Today’s Climate

How Big of a Deal is Cyber ​​Security? It’s no secret that founders have a lot on their plate. VCs aren’t cutting big checks anymore, we’re in the midst of a recession, and the pandemic hangover has created operational problems across the board. We surveyed more than 400 VC-backed startups to find out how they’re dealing with the current economic crisis and how concerned they are about cybersecurity, among other issues they’re facing in our New Matters. Cyber ​​Security Report: Introductory Edition.

Cyber ​​security concerns are on the rise

Notably, survey results reveal that two-thirds (68%) of founders have experienced a cyber attack at one of their businesses. This explains why the majority (86%) of founders said they have some cyber insurance coverage. But even with the policies in place, 71% said they would consider additional cyber protections and tools for 2023.

Concerns about cybersecurity are on the rise among founders, with nearly a third (31%) more concerned about cybersecurity threats than they were a year ago. In fact, 14% more founders believe they will be attacked than at this time last year (from 36% in 2021 to 50% in 2022).

Social influences drive decisions

The high percentage of startups with cyber insurance may be partly due to pressure from investors and/or board members, with nearly half (49%) citing cyber security insurance coverage as a requirement for one or both of these companies. However, this is prompting founders to re-evaluate their cyber risk rather than internal factors. The founders suggest that external factors such as global events have a significant effect. When it comes to purchasing cyber insurance, founders cite their decisions as most motivated by (a.) tensions surrounding foreign relations (40%), (b.) other corporate data breaches (35%) and (c.) managing a hybrid. /Remote workers (32%).

We’ve actually seen it play out with our own customers. Shortly after the start of the war in Ukraine, we saw a 50% increase in the number of applications submitted for cyber policies. It also shows how current events drive business decisions in real-time. With increased coverage of the war between Russia and Ukraine, the founders were concerned about possible retaliatory cyber attacks from Russia on American infrastructure and businesses.

Is cyber risk on the rise?

Read our 2022 Cyber ​​Risk Index report to find out what businesses are worried about, how to protect themselves and what the future holds.

Startups are serious about cyber insurance

Most startups have substantial cyber insurance coverage. Among founders who said their company had cyber insurance (86%), more than 52% described their coverage as “customized to our needs” or a “very comprehensive” package. However, half of startups with cyber insurance said their current policy would only partially cover their risk in the event of an attack or breach. Additionally, among those surveyed who did not have cyber insurance, the top reason for doing so was cost (44%). (Does this sound like you? Our team can help you Find internet insurance at the right price for your business).

Looking forward to 2023 and beyond

As founders look ahead to 2023, they are most concerned about the impacts of inflation (32%), cyber attacks (27%) and supply chain challenges (26%). This marks a change from earlier this year. our Initial Risk Index Report Conducted in February 2022, founders listed their top three concerns as inflation, supply chain issues and competition. At the time, cyber security was not ranked.

But now, the top three “non-negotiable investment areas” for the coming year are: product innovation (32%), cybersecurity protection (31%) and equipment upgrades (30%). This reinforces how focused founders are on better securing and adding to their company’s infrastructure and equipment.

To learn more about how founders treat cybersecurity in their businesses, download us Cyber ​​Security Report: Introductory Edition.