Mach37 Accelerates Security Startups


Getting a security startup up and running typically requires the infusion of two key ingredients: capital and expertise. Mach37, a company that calls itself a cyber accelerator, says it can help with both and bring fledgling companies to market faster.

Mach37 got its start in September 2013, focusing on the mid-Atlantic region of the U.S. While there is a lot of expertise around cyber-security in that region, there hasn't been much activity in terms of new startup companies with disruptive technologies.

Rick Gordon, managing partner at Mach37, explained that in the beltway much of the security activity is driven by government contracts, so there aren't a whole lot of companies focused on enterprise product management or sales.

"We invest in entrepreneurs that are trying to build companies, but perhaps don't know how to do it," Gordon said.

Mach37 has made 22 investments since September of 2013, encompassing a variety of different areas in security. The security incubator got its own original funding from the Center for Innovative Technology (CIT), which got the money from the State of Virginia.

Getting Security Startups Started

Gordon said he thinks Mach37 has done a good job of building relationships with the security researcher community, a potential source of ideas for startups.

"The security research community is a rich vein of innovation," Gordon said. "There are people for whom security is their day job and they are building solutions to some of the more difficult problems, but they may just not know how to build a company around those solutions."

Mach37 helps entrepreneurs get their business planning processes, advisory boards and financing in order. When Mach37 brings a company into the accelerator, it provides $50,000 to the company to help it grow. Going a step further, Mach37 will provide additional seed capital matching the first $50,000 to $100,000 that an entrepreneur is able to obtain.

When Mach37 invests in a startup, it takes an 8 percent stake in the entrepreneur's company. As such, each company that Mach37 initially invests in has an implicit valuation of $625,000.

For the latest group that Mach37 accepted, Gordon said his organization reviewed 60 applications and only accepted five. The five accepted companies are Anatrope, Atomicorp, JeKuDo, Nelson-Harris and Shevirah.

When choosing to work and invest with an entrepreneur, Mach37 has to really like the person and believe that he or she is fully committed, approachable and fun to work with.

"We have to think that the market is large and addressable, while the needs of the market are not being addressed by current offerings," Gordon said. "It has to be something that is innovative and disruptive."

Sean Michael Kerner is a senior editor at eSecurityPlanet and Follow him on Twitter @TechJournalist.