It’s common to hear that the strongest determining factor in a startup’s success is its team. But it’s more than the founders and early employees that can shape a startup’s trajectory. Investors, advisors, and board members too can play a major role in determining success, particularly in the enterprise sector where industry relationships are key and operating playbooks are more consistent from one company to the next.
With this in mind, it’s major news that stealthy security startup vArmour today announced the addition of not one, but two former Palo Alto Networks (PAN) CEOs as both investors and board directors. Collectively, Dave Stevens, who founded and led PAN from 2005 to 2008, and Lane Bess, who helmed the company from 2008 to 2010, have 60 years of experience in the security and data sectors.
“The security space is the gift that keeps on giving,” Bess tells me. “I knew very little about the role before [vArmour CEO] Tim [Eades] approached me. We talked for about 15 seconds and I said, ‘I understand, I get what you’re doing.’ I was attracted to the scope of the problem and the early traction among prospective and customers which reminded me a lot of Palo Alto Networks.
He continues, “I’m not saying I know where this one will end up, but it has that kind of buzz and early interest, even before generating a dollar of revenue, that I’ve found is common among companies that end up demonstrating IPO potential.”
Santa Clara-based vArmour was founded by former Silver Tail Systems CEO Tim Eades, who is now vArmour’s CEO, and Netscreens and Juniper Networks Director Roger Lian, the startup’s CTO. The still-clandestine three-year-old software-defined security (SDSec) startup likes to describe itself as “chainmail armour for today’s data centers,” without offering much in the way of detail as to how exactly it offers that protection or how it differs from other SDSec companies.
Comments in a statement around today’s board appointments indicate that it will focus more on protecting against threats that have already infiltrated enterprise networks, rather than the typical goal of penetrating external threats from breaching a company’s network.
“Advanced attackers now live inside enterprise networks for an average of 243 days before detection,” Eades said today in a statement on the board appointments, citing Gartner Group data. “And with the rise of cloud, virtualization, and mobile, data centers are now as agile as they are vulnerable. VArmour is assembling a world-class team to develop and deliver a completely new way to visualize, manage and ultimately protect the data center and defend against these threats.”
VArmour recently announced a Highland Partners-led $6 million Series A round of funding in January 2013, bringing its total venture backing to $8 million. No word on how much Bess and Stevens added to that sum or on whether other existing or new investors also participated in a new round.
Bess tells me that his expertise is in growing companies from zero to $200 million in revenue, particularly around go to market strategy, operational scaling, and sales productivity modeling – exactly the kind of things a hot enterprise company will need to nail between its Series A and its next few rounds of growth funding. Prior to his role at PAN, Bess was the EVP of Worldwide Sales and General Manager at Trend Micro and currently he’s the COO of cloud security startup Zscalar.
“I’m currently in another operating role, which means I have to be really selective about things that take time away from that,” Bess tells me. “This is the only other board seat I’ve taken. Board seats are a scarce commodity, so my rule is that I only consider taking one when I believe I can add real operational value.”
Most recently, Stevens was a CTO and VP of Corporate Development for Brocade and was before that a Venture Partner at Foundation Capital. He says in a statement today:
Virtualization is driving a revolutionary change in architecture across the data center. Enterprises are simply not able to use legacy security and networking technologies to protect today’s highly virtualized environments. The vArmour team has been able to design a solution, unencumbered by legacy thinking or technological trappings, that meets these challenges in a radically new and more effective way.
The biggest challenges facing nascent enterprise software companies (in all sectors) center around gaining the attention of large corporations and then convincing them to take a shot on a still unproven technology. It is in this area that Bess and Stevens’ involvement should pay the most dividends for vArmour, both by virtue of their credibility and their extensive rolodexes.
Bess has made a total of seven angel investments, including Arista Networks, Nutanix, PernixData, ThoughtSpot, and others still in stealth, since leaving PAN and has accepted an additional four advisory roles. That vArmour is the first he’s deemed worthy of sitting on its board is telling.
“I believe it has the potential to be a large standalone company,” Bess says.’There are companies with less value in the overall security equation that have made it to IPO, and certainly there are companies with far less value that find themselves being a feature to more successful companies. I don’t doubt that with Tim’s leadership and the team he’s building, that there will be companies that both of those options will be available to the company in the future.”
Despite being involved in a number of startups as an investor and advisor, Bess doesn’t think of himself as a “venture guy.”
“I’m a guy who’s really passionate about the work I do and the things I get involved with. I like to think I don’t have any preset notions about what I want to be,” he says. “Venture investors have constituents to answer to and a playbook that often gets examined by other partners in their firm and has to work well within a larger portfolio. And often investments you want to make don’t get full support of other partners in the firm. It’s a lot easier when you’re working on your own and are able to look at things objectively and say to yourself, ‘I’ll put money into that, that’s really interesting.’ To me it’s really the preferred place to be.”
Just as important, Eades has a similarly confident and aggressive approach to company building, he says.
“My outlook aligns pretty well with Tim’s,” Bess says. “He is a ‘let’s take the hill, let’s kick some butt, let’s make something happen’ kind of guy. That really affects the culture of the company. That’s something I tend to gravitate toward. They’re fun companies when founder CEOs want to create an environment that’s high risk, high reward. VArmour is certainly that, but I think it’s a compelling one.”