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Top Predictions of the Next Billion-Dollar Cybersecurity Startups

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Lookout Security

Lookout customizes cyber defense for the mobile market by using predictive analysis tools to plan for threats before they become a problem for users.  The company now boasts more than 60 million users, including organizations such as AT&T and Sprint. Mobile security is the next frontier for cyber security expansion.

BlockScore

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In 2014, Blockscore landed $2.4 million in funding for its identification verification product. Marketed as an anti–fraud and compliance product, Blockscore enters the market at a time when newsworthy hacks have made it obvious that simple password protection is fruitless against modern cyber criminals. While Blockscore is competing with dozens–if not hundreds–of security products, it markets itself as the simple, convenient, and effective option. On its landing page, the brand cleverly shows that users can sign up and use the service in the time it would take to read the competition's contracts.

Sift Science

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With more than 191 million digital shoppers in the United States alone, e–commerce sites across all niches are seeing growing business. Along with the increasing revenue comes a growing problem: fraud. In 2012, online retailers lost $3.5 billion to fraud, so it's not surprising that companies are cautious about potentially fraudulent orders.  This is where Sift Science comes in.

E–commerce fraud protection services may seem more difficult to brand, and you might not see a bandwagon potential at first. But consider the need to keep up with competition. Eventually, more retailers will have to buy in to the Sift Science product or risk the loss of consumers whose orders have been incorrectly denied.

We also like that Sift Science is integrated within thousands of websites.  Once you’re able to build dependency, similar to CloudFlare, you’re on your way to becoming a billion-dollar company.

True Link Financial

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True Link Financial offers monitoring and education tools for older adults and caregivers to help seniors avoid fraud and scams. Few cyber security companies dared to tackle this niche for the older generation Americans.  We are fascinated by the potential here.


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The Startup Correction and Why Startups Should Raise Capital Now

"Startups should raise money now.  Buy your umbrella and get ready to weather this storm of volitility." 

The Hottest Hardware Startups in America

A number of hot hardware startups are covered in a few other chapters in this book, and many are mentioned in chapter 6. For angel investors, hardware is a fun and adventurous space, because it covers so many niches. From gaming to home automation, you can find a hardware startup that address needs in almost any industry. Pebble, the Kickstarter darling, brings smartwear to the wrist, and Boosted lets urban dwellers get around quickly on a motorized longboard. Hardware even enters the tobacco market with companies such as Ploom, which used its ties with a Japanese tobacco firm to create sleek vape devices.

Let's look at a few other hot hardware startups and discuss why these companies are catching investor eyes, starting with:

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FORMLABS

Formlabs, launched in 2011, is an illustration of what happens when founder know–how meets impeccable timing. The company, which received $1.8 million in seed funding in November 2011, further drove its 3D printer product to market with help from a 2012 Kickstarter campaign. The campaign offered rewards ranging from a virtual high five and a file copy of the printer model to a package containing the actual printer plus fun printables.  In its Kickstarter campaign, Formlabs claimed it intended to disrupt the 3D printing market with an affordable, high–quality 3D printer.

The startup was able to garner additional funding in 2013, when a Series A round brought it $19 million for product development and expansion. It's not surprising investors were happy to get in on funding Formlabs. By that time, it had already made good on a number of its Kickstarter promises; by December 2013, Formlabs had fulfilled all the Kickstarter rewards and shipped more than 1,000 of its Form 1 3D printers throughout the globe; this hardware startup had a strong execution plan.

Why all the hype around Formlabs' product? First, Formlabs' Kickstarter project, came at a time when 3D print technology was becoming a household topic. News media was covering the technology, which sounded futuristic and frightening to many–op–eds asked "What if people print guns?" and entrepreneurs bubbled excitedly about manufacturing concepts. For many users, though, the technology was entertaining to consider, but far from daily reach.

Formlabs' Kickstarter campaign meshed with the audience because it made the concept relevant, less frightening, and affordable. For $2,299, a backer received the printer and some supplies. With businesses paying a thousand or more for copy machines, that price for a 3D printer opened the technology to small business users and individual inventors.

That covers product and branding, but for the angel investor, the people behind FormLabs are also an attractive investment. Natan Linder managed Samsung's R&D center in Israel and was a lead designer with a robotics company. Maxim Lobovsky's 3D printer experience dates back to FabLab and Fab@Home projects as does David Cranor's. All three founders also came from a background at MIT Media Labs.

With so many criteria pointing to a high chance at success, we aren't surprised that FormLabs made several expansion announcements in early 2015. This startup is looking to grow rather than seek an IPO. In a single week, the company announced expansions in both Germany and China.*

* Krasserstein, Brian. "Formlabs Heads to Germany, Opens Office in Berlin, Partners with IGo3D." 3DPrintcom. N.p., 16 Mar. 2015. Web. 29 Apr. 2015. http://3dprint.com/51309/formlabs-germany-igo3d/
 Molitch-Hou, Michael. "Formlabs' SLA 3D Printing to China - 3D Printing Industry." 3D Printing Industry Formlabs Brings LowCost SLA 3D Printing to China Comments. N.p., 10 Mar. 2015. Web. 29 Apr. 2015. http://3dprintingindustry.com/2015/03/10/formlabs-brings-low-cost-sla-3d-printing-to-china.

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Ross-Blankenship-expert-investor

Ross Blankenship is the "expert on venture capital and angel investing" for startups and investments for venture deals. He is also a proven entrepreneur, and the Founder and CEO of AngelKings.com. Angel Kings is an investing platform that provides accredited angel investors the opportunity to invest in top startups and companies in sectors like cybersecurity, biotech, mobile, data and financial services. Angel Kings provides both venture capital funds for startup investing as well as private equity funding for early and middle-stage investments. Ross Blankenship has successfully founded several companies and now manages a Venture Capital fund focused on early stage, high growth startups in sectors such as mobile, cybersecurity, cloud computing and biotechnology. Learn more about Ross Blankenship, and how to become a successful, early investor at http://AngelKings.com.