What is this?
Shenandoah Cyber Investments (SCI) is a vehicle to help cyber start-up entrepreneurs. SCI is also a way for us to assist our friends who want to invest in cyber startups but have a hard time finding the opportunities or can’t afford to invest very much. SCI uses the Angels List infrastructure as its back-end.
Who are we?
We, the two General Partners, are Richard Clarke and Norm Laudermilch and between the two of us we have half a century of experience in cybersecurity as operators in the private sector and government, as board members, as advisors to venture capital and private equity firms, and as personal investors. We have seen the cyber fads and the permanent progress.
We are joined by Ethan James Appleby, our Operating Partner, who is a former founder turned venture capitalist and runs several of the largest syndicates on AngelList. Together, we have seen the start-up execs who made it and those who failed. We have a pretty good idea about what products and services are needed in the marketplace, as well as what it takes for a start-up exec to bring an idea from the whiteboard to the enterprise board room.
Why cyber?
For over two decades the cybersecurity market has proven to be a sector in which good ideas combined with great execution produce significant returns. Every credible market forecast shows continued growth in cyber spending for the foreseeable future. And in cyber and IT, more than in almost any other verticals, innovation comes frequently from start-ups, not from labs of The Very Big Company.
2021 Annual Report
What investments will we make?
We see a lot of cyber start-up ideas, particularly in the Pre-Seed and Seed stage. While that is where we will focus our investments (because the returns are best), we are “round agnostic” and will invest in later stages too if we have the opportunity and the return is promising.
Our criteria for investing are:
- Does the market need the product, i.e. does it solve a problem people know they have and want to solve,
- Does the product work and scale to enterprise class,
- Is the team sufficiently experienced and motivated, and
- Is a highly lucrative exit likely in the next five years?
How do you become a Limited Partner?
If you have been invited to be a Limited Partner with us, we have chosen you because we believe that you’ll add value to our founders and portfolio companies.
To join, all you have to do is click the ‘Back Syndicate’ link below. You do not have to pay anything until you see one of our investments that you like. You must be a qualified investor to participate.
How much do we have to (can we) invest?
If you like one of our opportunities then you have to invest at least one thousand dollars. But if you never like one of the companies we like, you never have any financial commitment. There may also be maximum investment limits.
You should be financially prepared to lose all of your investment. There are no guarantees. If, however, we are making the investment available through SCI, that means we will be investing our own money in the company. We pool the funds of all those who want to invest through us, along with our own money, and make one investment, limited in size by the allocation that the company gives us, i.e. how much the company will let us invest. We get returns when the company transacts, i.e., when it is bought or goes public. That can take years, but those who are in early usually get the highest returns.
How many deals are you expecting to do a year?
We expect to do between 8-12 deals, but are more interested in quality over quantity. We hope to have between $250-$500k allocation per deal. We take 20% carry on each deal.
And if you know of a cyber company looking for investment, send them our way. If our diligence qualifies the company, we will make it available through SCI and share a generous amount of our carry with you as a deal partner.
That’s all there is to this. It’s a chance to invest in exciting new cyber companies we like. We look forward to seeing you soon.
