Every online entrepreneur is familiar with crowdfunding, and most of us have probably at least given it consideration when comparing the various methods of funding available to startups. Many have utilized these platforms to raise hundreds of thousands or even millions of dollars, leading to the advent of a new type of investing and financing that doesn’t rely on credit, complicated business models, or any of the other components that you’d typically need to pitch in a conventional investment environment.
However, while startups aren’t required to disclaim much about their credit history, investors are also hidden behind the same veil, so you wind up having a lot of people involved in the development of your brand or product, and you have no way of knowing who they are or what their intentions are.
We discussed these concerns with Brook Zimmatore, the CEO of Massive Alliance and an expert in online threat intelligence at the enterprise level, to find out what threats crowdfunding might pose to the security of a young startup:
Feeding Trade Secrets and Innovative Ideas to Sharks?
Any time you take a product or service online it’s going to be out there for everyone to see. So what is it about crowdfunding that makes startups and entrepreneurs more vulnerable to cyber attacks and nefarious industry activity? According to Zimmatore, the key danger lies in the youth of the endeavor and how much un-gained revenue is at stake.
In many cases, a product or service will be competing with a more established entity, and it might stand to profit that entity if they were to develop and offer a similar invention. While copyright laws can provide protection to a degree, there’s always a way around it and the very same people investing $50 at a time into your household convenience product might be working to develop an alternative behind your back.
Letting Hackers Know You Have ‘New’ Online Money
A ripe startup with tons of cash that is operated by a technical newbie is like a hacker’s dream job. They’re looking for people and sites that have value yet are easy to exploit. By definition, an experienced yet moderately successful entrepreneur fits this bill perfectly. “While there will still be hackers that target the more authoritative brands and aim to perform the major data breaches you hear about in the news, there are others who specifically scour crowdfunding platforms to find startups that have weak defenses against cyber attacks,” said Zimmatore.
Espionage and Preparing to Play in the Big Leagues
Any time a brand is getting ready to become visible to the world, it should be preparing by gathering the necessary security tools and resources.
There are some very savvy and sophisticated hackers and investment sharks out there that will prey upon your company’s weaknesses at the first opportunity. Espionage from counterfeit product manufacturers, competitive global giants and Venture Capitalists is very common place. Zimmatore mentions that they see this daily within their Strixus platform with young startups and even global brands who are coming close to launch new products.
Preventing such a hassle requires a combination of educating yourself regarding cyber security and utilizing appropriate preventative measures to identify and block online threats. “Massive’s security resource blog is designed to provide anyone the mindset and tools required to put in the most basic security infrastructure and general awareness within a company”, says Zimmatore.
Understand What is at Stake
Whether you’re defending yourself from a hacker looking to steal the sensitive financial data of your customers, or an aggressive competitor looking to rip off your idea and steal your portion of the market, it’s clear that the your company’s reputation, integrity, and future profitability is at stake when it comes to maintaining online security, especially in the transparent world of crowdfunding. With that said, Zimmatore urges entrepreneurs to take up the responsibility of equipping and educating themselves, not only to protect their own interests, but also to help combat the scourge of cyber attacks that are affecting the global economy as a whole.