Speaker 1: This is Bloomberg Business Week with Carol Messer and Jason
Speaker 1: Kelly on Bloomberg Radio. All right, always looking for a
Speaker 1: little more security in the real world, in the cyber world,
Speaker 1: which is increasingly important, especially I think as we talk
Speaker 1: about elections, it being a presidential election year, and we
Speaker 1: want to understand where the money is going. And we
Speaker 1: got the perfect guy to talk to talk about that,
Speaker 1: and that is Alberto Jepez. He is the co founder
Speaker 1: and managing director of Forge Point Capital, joining us on
Speaker 1: the phone from San Francisco. Got a new fund all
Speaker 1: about cybersecurity. Alberto, thanks for joining us, Thank you for
Speaker 1: the opportunity. Good to be here. So tell us about
Speaker 1: this fund. What gave you the idea and the impetus
Speaker 1: to get it off the ground. Well, this is our
Speaker 1: second fund. We started um with our UH Focus Fund
Speaker 1: in cyber security in seventeen when we raise our first fund,
Speaker 1: which was three million, and we invested in seventeen companies.
Speaker 1: And since the first fund, the industry is almost double
Speaker 1: in size and in importance. And now we raise a
Speaker 1: fund that is UH millions or we have about seven
Speaker 1: fifty million under management, which puts us to be the
Speaker 1: largest cybersecurity venture fund in the in the market and
Speaker 1: the need, the importance. You got it. It's not only
Speaker 1: for governments, individuals and businesses because cybersecurity has to be
Speaker 1: embedded in everything we do. Yeah, no doubt. You know, Jason,
Speaker 1: I were saying, excuse me, Alberta before we got going,
Speaker 1: is how often we have you know, a CEO or
Speaker 1: an executive coming on with a new cyber security startup
Speaker 1: fund or not a start up fund, but another company
Speaker 1: like that is where folks are spending their money. And
Speaker 1: there's a lot of companies out there. So give us
Speaker 1: an idea because I do feel like there's so many offerings.
Speaker 1: What will guide your investments? You know, unlike many of
Speaker 1: our other venture funds, were exclusively focused on on cybersecurity,
Speaker 1: which gives us tremendous insights in the industry. In the
Speaker 1: level of experience that we have in the team, about
Speaker 1: seven investment professionals has spent their lives in cybersecurity as entrepreneurs,
Speaker 1: investors and corporate executives. So that insight gives us an
Speaker 1: opportunity to be close to what we call our advisory council,
Speaker 1: where we have about sixty very active uh cybersecurity professionals
Speaker 1: that really gives us insights about what are the problems
Speaker 1: they're trying to solve. These are many c i o's
Speaker 1: chief security officers, chief trust officers from the largest businesses
Speaker 1: that gives us the insight or what's needed. We work
Speaker 1: with also their entrepreneurs that help us that the solutions
Speaker 1: and also with board members or industry leaders that can
Speaker 1: help us make the right selections. So giving that insight
Speaker 1: and giving that group that we actually call our Cybersecurity
Speaker 1: Advisory Council, we get insights about which areas that we invest,
Speaker 1: so which areas are people talking about about cybersecurity. So
Speaker 1: you you know, the biggest issues that we have is
Speaker 1: the number and sophistication or cyber attacks is only increasing.
Speaker 1: We have new technologies that need to be protected in addition,
Speaker 1: we have a huge shortage of cybersecurity professionals. As such,
Speaker 1: then we need to figure out on ways we can automate.
Speaker 1: We can use machine learning and other technologies to be
Speaker 1: able to help address the biggest issues that we have.
Speaker 1: And so Alberto tell us about the investors, the type
Speaker 1: of folks who are putting money UH into your fund,
Speaker 1: because we certainly have seen a lot of as Carol said,
Speaker 1: a lot of interest on the institutional and the and
Speaker 1: the sort of high net worth individual side and trying
Speaker 1: to get invested in this area. Talk to us about
Speaker 1: the fundraising environment. This environment is looking for specialized funds.
Speaker 1: You know, the generalist fund is interesting to them, but
Speaker 1: they're looking for people that really focus on the in
Speaker 1: the in the area, and so it's fourth point for them.
Speaker 1: They like the fact that we were very focused on
Speaker 1: cybersecurity and our track record. So the people are invested
Speaker 1: in the fund. Our corporate UH corporations, UM, we have
Speaker 1: ancient plans, we have endowments, we have high network individuals
Speaker 1: and family offices. So they're all coming together and and
Speaker 1: and they're very interested in not only that, the actually
Speaker 1: investments that we do, and they're often benefit from the
Speaker 1: insights we provide to them and their corporations and their businesses.
Speaker 1: So I do think about our audience who's listening, because
Speaker 1: you know, we've talked a lot about private versus public markets,
Speaker 1: and I think investors are increasingly interested in funds like yours.
Speaker 1: You know, UM, a lot of you know, more of
Speaker 1: the private markets that's going on. So in terms of
Speaker 1: are you expecting there's going to be more fun similar
Speaker 1: to this. That's kind of a narrow vertical UM, and
Speaker 1: you know, what are your expectations that. So we thought
Speaker 1: the same thing that it was a narrow verth vertical.
Speaker 1: It's not a narrow vertical. It's really a broad vertical
Speaker 1: because everything we do and digital transformation and communications, IoT
Speaker 1: intelligence and so and so, it's abroad this broad applicability.
Speaker 1: But it's a very focused fun so UM. Some of
Speaker 1: the things that investors are telling us is they like
Speaker 1: the fact that we can create alpha. We usually identify
Speaker 1: the early innovators. Companies are trying to use new ways
Speaker 1: of addressing problems. For instance, we just made it. We
Speaker 1: just announced and an investment in a company called Sizsive,
Speaker 1: which was in a spin out of trend Micro, where
Speaker 1: they're trying to deliver a security operations center in the
Speaker 1: cloud because people are trying to manage Amazon, uh, Microsoft
Speaker 1: and all the different clouds providers. They are providing that
Speaker 1: so that they don't have to deal with all the
Speaker 1: people in all the expenses to be able to deal
Speaker 1: with that. So we are addressing some of the core
Speaker 1: issues that the industry is trying to deal with and
Speaker 1: more importantly, we're trying to create alpha. What happens is
Speaker 1: there's two dynamics in the market. Private investors are interesting
Speaker 1: because most of the exits in the in in in
Speaker 1: cyber security are acquisitions. More than ninety percent of companies
Speaker 1: get acquired, and all for get acquired by established companies.
Speaker 1: They're not growing as fast and no longer innovating, but
Speaker 1: they go and buy a fast growing We court technology
Speaker 1: in deeperd fertises to be able to increase the radio growth.
Speaker 1: So define we create alpha. But at the same time
Speaker 1: we have an opportunity we always invest with basically the
Speaker 1: opportunity to take the company public, but more often than
Speaker 1: not they get acquired that they get approached before going
Speaker 1: to that they're public offering. All right, we're gonna leave
Speaker 1: it there. Alberta Jepez he is the co founder and
Speaker 1: managing director of forged Point Capital. They've got a new fund,
Speaker 1: their seconds UH. It is the largest of its kind.
Speaker 1: The new pool of money about seven fifty million under
Speaker 1: management in total. Really interesting. Well in AI and a cybersecurity,
Speaker 1: there's a lot of themes that they're looking at to
Speaker 1: make their potential investments.