Investing in a flourishing community of cybersecurity companies
Ron Gula is the President of Gula Tech Adventures, a cybersecurity investment fund he founded with his wife Cyndi. Before launching Gula Tech Adventures, Ron served as CEO of Tenable Network Security, an organization that helps others address their digital vulnerabilities and reduce their cybersecurity risk. Ron first developed his cybersecurity expertise during his time at the National Security Administration. He transitioned to a career in the private sector after meeting Cyndi, who has frequently acted as his business partner throughout the Gulas’ numerous ventures.
EDWIN WARFIELD: What made you decide to go into investing?
RON GULA: Having been CEO at Tenable, I’m very honored to have been exposed to so many interesting companies that are out there doing new, cutting edge cybersecurity. Over the last three or four years at Tenable, I’ve been very, very involved as an angel investor, and it really sort of gave me the bug to do it full-time.
As we made the decision to go out and recruit another CEO, I was very focused on making sure that the fund was set up, that we could start transitioning from me being a CEO to being more of a venture capitalist. Earlier this year, we launched Gula Tech Adventures. My wife and I were featured in a Washington Post article, which really set things off. We’ve probably looked at about 200 companies this year so far. We were able to roll in all of our previous angel investments and we’ve done about 10 investments this year.
Q. Can you describe your investment approach?
A. One of the things that we’re trying to do at Gula Tech Adventures is focus on Mid-Atlantic, Maryland companies that are doing cybersecurity. There are a lot of other folks who are doing that. For example, TEDCO is an arm of the State of Maryland, which aims to seed a variety of startups including cyber startups.
One of the companies that we both jointly invested in is a company called New Edge. Now, New Edge is a cloud-first VPN replacement. If you think about the cloud, we log onto Gmail, we log on to Office 365, perhaps Salesforce, but if we are going to VPN into the office—I’ve seen a lot of my friends, they get out their RSA token and they fire up a client on their computer that goes through a fairly antiquated, at this point, virtual private network that just kind of dumps you out on the inside of your network with no real knowledge of who you are or where you’re going. New Edge basically replaces all of that by putting the VPN in the cloud and enforcing where you can go based on who you are. For example, I use New Edge to log in to a lot of my home network at this point and authorize when I can go to certain cloud services. It’s basically a one-stop shop for enforcing cloud-based access, and increasingly this is the way enterprises both large and small want to do business on the internet.
At Tenable, we had a lot of different strategies for engaging with customers. We had channel, we had ecommerce, we had a direct sales force, and depending on what product we were selling and where you were in the world, we were very effective at making sure we can engage customers. Now with that experience, when I look at the Gula Tech Adventures portfolio, I try to keep that in mind.
Some companies that do extremely well with channel, for example, are Bandura. Bandura is an appliance that sits in front of your network and it blocks all the threats and certain countries that you don’t want to go to, regardless of what firewall and security controls you have in place, because it removes all these threats so those things don’t have to deal with it. It’s a great solution to be sold alongside a firewall, alongside a network security device, and there’s a lot of good channel partners out there who are moving that along.
A company different to that would be like Edge. Right now, they just came out of stealth—they’re just doing proof of concepts—you know we’re aiming for that one-click Amazon app store sort of experience, because that’s the target market that they’re going after. When you think of all the different things you can do in cyber security, looking at logs, looking at network traffic, doing authentication, there’s going to be even many different variations of that.
Q. Why focus on the Mid-Atlantic region?
A. American University put out a study earlier this year—and I did blog about it to bring some attention to it—where they did a survey of cyber companies between Virginia, specifically Northern Virginia, DC, and Maryland. They had a lot of astounding things. Everybody knew there’s a lot of service companies and how few product companies that there were, and they really drew some attention to that. Now, there’s nothing wrong with being a cybersecurity services company working for the government. It’s an important mission. It’s a great thing that we have to do. There’s a lot of opportunities—a great career—but that sort of career choice and company choice is much different than a product company.
Product companies are very technology-first, where you’re going to not be there; you’re selling your technology—you’re not selling yourself, so to speak. There are lots of those companies, because the culture of startups here in Maryland, in the Mid-Atlantic, is very much focused on many of the cyber services companies that are around. One of the reasons we did Gula Tech Adventures, and one of the reasons we’re focused on that, is because we think that’s the best thing for the region. I often tell people I’m working on the next 10 Tenables at Gula Tech Adventures. I really think that when you think about a potential IPO for Tenable, potential venture capital raise, and you look at what it did for the region, imagine if we had that tenfold: we would actually be in a better position than Silicon Valley or some of these other organizations in cities you know across the country.
In the region of Maryland, there is such a natural resource of cyber expertise here. A lot of it comes from the National Security Agency. Some of it comes from the applied physics labs. Some of it comes from all the service providers that are working at the FAA and the Social Security Administration, and all the great banks in Baltimore, and the organizations in DC. But when it comes to “How do we take those people and get them to start companies?”, I want to be an example for that. I want all the other cyber companies like Sourcefire and ZeroFOX to sort of help build that ecosystem. Now doing Gula Tech Adventures, focusing on that seed round and A rounds, it’s letting people see that there’s a way to do this kind of thing. We could have sat back and just did angel investing and not done a full on fund, but what we wanted to do is be very visible in the region.
Now, having said that, people understand when they go start a company, it’s not just simply you do a product and bring it out, but what they don’t realize is that the products and technologies they’re delivering to the NSA, to the CIA, to the Social Security Administration, to Healthcare.gov, are actually the same kind of motions that Silicon Valley and Austin software companies are going through every day. We just want to have more product and technology companies in this region, and I think you’re going to see a powerhouse that you haven’t really seen before in the U.S.
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