Cybersecurity expert Fred Kneip has raised almost $60M for his startup so far. It all started with a winning PowerPoint that has drawn the attention of a host of the most enviable investors.
Fred recently made an appearance on the Dealmakers Show. In our interview, he shared his journey, what he’s learned, the keys to raising millions in funding, and how his company is transforming one of the fastest-growing markets we’ve ever seen.
Listen to the full podcast episode and review the transcript here.
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From Brooklyn To Boarding School
Kneip grew up back in Brooklyn. A community that still has its mom and pop stores, along with many of the most innovative new brands.
Wanting him to get the chance to experience more sports, his parents packed him off to boarding school in another state at a young age. It’s an experience that he enjoyed and credits a lot to doing well in college and developing his entrepreneurship skills.
From Fred‘s perspective, “it gives you a sense of independence. It teaches you personal accountability at a young age. Mom and dad aren’t there to do everything for you. You’re on your own. You have to make your own decisions and bear the consequences, without anyone else to blame.“
As a result, Fred says you are already ahead of the game when going to college. You don’t have that adjustment period to being on your own that other students are dealing with.
Fred received a B.S.E from Princeton University. His studies put him at the intersection of engineering, problem-solving, optimization and microeconomics.
It let him pursue the passion he had for problem-solving since childhood. He credits that to his mother. If something broke, she would always encourage him to take it apart and understand how it works.
That was way before YouTube existed and you could download knowledge on just about anything in an instant. It’s a passion and habit he still enjoys today and practices with his son and his toys.
M&A and How Businesses Work
Fred Kneip’s work took him to rebuild Merrill Lynch’s M&A model for bank mergers. Always a fan of Excel, he ran financial models for acquiring banks and investing and deploying capital.
He was also confronted with how public companies and CEOs were pressured to make decisions on quarterly earnings reports, even if they weren’t the right strategic moves for the company.
He decided to try private markets and got involved with leveraged buyouts (LBOs). He found incredible opportunities to build and scale companies.
Fred also watched $10B companies fall into bankruptcy because they ran out of cash and weren’t capitalized well enough. Especially, when trying to implement innovative new concepts.
They’ve all been learnings that he has applied to build his own venture.
Desiring an even deeper understanding of business and how to build a sustainable and impactful business Fred went back to school to get his MBA.
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Then, like many highly successful entrepreneurs I’ve interviewed on the DealMakers Podcast, he went into consulting with McKinsey. It’s a path that really teaches you how to breakdown big problems and solve them, and gives you a lot of insight into other sizable companies.
Specifically, Fred describes learning to get to the real root of a problem, and helping companies get out ahead of that. For some it may be more marketing, for others, it is first simplifying how the product is used.
What You Learn Working with Ray Dalio
Next Fred Kneip got the chance to work at Bridgewater with Ray Dalio, author of the book, Principles.
He found the culture refreshing and fascinating. An environment where everything was transparent and shared.
He saw how over the past 40 years Bridgewater has been able to create incredible systems. Taking 10 million data points and breaking down the drivers behind every commodity to be able to invest more intelligently and intuitively.
He learned how knowing your weaknesses is also a strength and the value of admitting where you could use help.
The Founding Of CyberGRX
At Bridgewater, Fred had been asked to lead the security team.
As with most companies today he experienced dealing with a massively expanding ecosystem of suppliers and vendors. Each one potential risk for cybersecurity.
Just as he was ready to move on to something new he met Jay Leek, the Chief Information Security Officer of Blackstone.
Jay was dealing with similar challenges, where they had an enormous portfolio of companies who were also facing the same dilemma. Some were spending tens of millions of dollars each year on teams just to assess cyber threats and the security of these vendors.
They teamed up to create CyberGRX’s assessment and methodology for evaluating and validating these vendors and suppliers in a way that would save both sides of the equation millions of dollars each year. Their data subscription is now used by Fortune 1000 and Fortune 10 companies.
Armed with just the idea and a PowerPoint presentation CyberGRX raised $9M out of the gate. They’ve now pulled in $59M from investors including TenEleven Ventures, AllegisCyber, The Blackstone Group, GV (formerly Google Ventures), Bloomberg Beta, Aetna Ventures, MassMutual Ventures, Bessemer Venture Partners and Scale Venture Partners.
Storytelling is everything which is something that Immad was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Listen in to the full episode to find out more, including:
- How they pulled in all of these types of investors
- The three things you need to raise capital like this
- The toughest day you’ll face as an entrepreneur
- The two things Fred recommends to other entrepreneurs considering a startup