Vipin PG 
Founders spend months polishing a pitch deck — refining the market size slide, tightening the growth projections, rehearsing the story behind the product. Far less attention usually goes to something investors increasingly care about just as much: whether the company’s basic technology practices would survive a serious security incident. A great pitch can get a founder in the room. It won’t stop a due diligence process from stalling over a security gap nobody thought to prepare for.
Why This Has Become a Real Part of the Process
This shift isn’t happening in a vacuum. Small and medium-sized businesses experience ransomware-related data breaches at more than double the rate of large enterprises, according to Verizon’s 2025 Data Breach Investigations Report — and early-stage startups, with limited resources and immature security practices, sit squarely in that higher-risk category. Investors evaluating a potential portfolio company aren’t just underwriting the product and the market; they’re underwriting the risk that a preventable security failure could wipe out a meaningful share of the value they’re about to fund.
The financial stakes behind that risk are substantial. The global average cost of a data breach reached $4.44 million in 2025, and organizations that detect and contain a breach faster consistently face significantly lower costs than those that don’t, according to IBM’s 2025 Cost of a Data Breach Report. For a seed or Series A company, an incident anywhere near that scale isn’t a bad quarter — it’s potentially the end of the company, and investors have every reason to want assurance that isn’t the trajectory they’re funding.
What Investors Are Actually Looking For
The good news for founders is that expectations at the early stage are calibrated to company size — nobody expects a five-person startup to have an enterprise-grade security operations center. What matters is whether the fundamentals are genuinely in place and whether the company has a credible plan for how those fundamentals will scale alongside growth.
A structured way to think about this is through an established framework rather than an ad hoc checklist. The NIST Cybersecurity Framework organizes security practices around core functions — identifying assets and risks, protecting systems and data, detecting problems early, responding to incidents, and recovering afterward — and has become a widely recognized way for organizations of any size to demonstrate a credible, structured approach to security rather than a patchwork of disconnected efforts. A founder who can speak to their company’s practices in these terms, even informally, signals something meaningfully different than one who can only say “we haven’t had a problem yet.”
The Specific Gaps That Tend to Surface
A few categories show up repeatedly when a startup’s security posture gets a closer look:
Access that isn’t actually controlled. Multiple team members and former contractors with standing access to core systems, without a clear process for reviewing or revoking that access as the team changes.
No real incident response plan. A vague sense that “we’d figure it out” if something went wrong, rather than a documented plan for who does what in the first hours of a genuine incident.
Customer data handled without clear boundaries. Especially relevant for companies in healthtech, fintech, or any space touching regulated data, where investors will specifically look for evidence the company understands its compliance obligations, not just its growth metrics.
Security debt inherited from moving fast. Early technical decisions made purely for speed, without any documented plan for revisiting them as the company scales — a pattern investors recognize because they’ve seen it derail other portfolio companies before.
Why This Matters More in Durham’s Startup Ecosystem Specifically
For founders building companies in the Research Triangle, this dynamic is particularly relevant. A region with this much concentrated biotech, life sciences, and tech startup activity attracts investors who’ve seen security gaps disrupt deals before, and who bring that pattern recognition into every subsequent due diligence conversation. A founder who’s proactively addressed the basics — documented access controls, a real incident response plan, a credible story about how security scales with the company — enters that conversation from a position of strength rather than scrambling to explain a gap an investor’s technical advisor just found.
This is exactly the kind of foundational work that’s easy to defer when a founding team is focused entirely on product and growth, but expensive to discover mid-diligence when a term sheet is on the table. Working with managed IT services in Durham that understand both startup-stage constraints and what investors are actually looking for can help a founding team build these fundamentals in proportion to where the company actually is, rather than either ignoring security entirely or over-investing in enterprise-grade infrastructure a five-person team doesn’t yet need.
Building This In Before It’s Tested
The founders who handle this well aren’t the ones who wait for an investor’s technical questionnaire to think seriously about security for the first time. They’re the ones who’ve already done the basic work — documented access, a real incident plan, a clear story about scaling security alongside growth — so that when the questions come, they’re demonstrating existing practice rather than making promises about what they’ll build after the round closes.
The Real Lesson for Founders
A polished pitch deck gets a founder into the room. What happens after that — the questions about access controls, incident response, and data handling — is where investors are quietly evaluating something the deck can’t show them: whether the company’s foundation is actually sound. Treating that evaluation as an afterthought, rather than something to prepare for with the same seriousness as the pitch itself, is one of the more avoidable ways a promising round gets complicated.
