 going to meet the VC panel, FYI, there are two mics there so if you have any questions when it's Q&A by direction here, please go to one of the mics. Cool. Give me a big hand. Cool. So my name is John Herring. I work at a company called Lookout. The company Lookout for those who don't know does mobile security. We started here at DEF CON and after a number of years of doing research and spending time here in the community we were able to actually build a business and ended up raising venture capital. I thought it might be interesting to share some of our stories and spend some time getting to know some of the top venture capitalists who work in the security industry as well. So maybe we can introduce ourselves starting with you, JJ. Hello. My name is John Jack. I go by JJ. Clever. I was the CEO of a security company called Fortify Software which was security at the application level. We were one of the pioneers in that space, at least in terms of commercializing a lot of work that had been done prior to us starting the company. We grew that company fairly well, became the standard in financial institutions, governments, telcos and actually the standard in commercial software providers. People like Oracle and SAP and EMC all used this product in order to root out vulnerabilities in the software that they delivered to their customers. That company was acquired by Hewlett Packard in 2010. Previous to that I was CEO of a couple other companies, one we sold to VMWare, one we sold to a company called Corporate Data. And now I work part-time with a VC firm called Andreessen Horowitz. We have a number of investments in security. And I also part-time do some consulting and serve as an independent director on other venture-backed companies. Thank you. Hi. My name is Matt Occo. I very unglamorously go by Matt. I'm the co-founder and co-managing partner of a firm called Data Collective. We like doing deep, dark, difficult stuff that most of our venture colleagues ironically except for the guys on this panel disdain or don't understand. It's where we've made most of our money. It seems to be a reasonable thesis across 220 companies over nearly 25 years. We've had fewer than 20 losses and we've made our entrepreneurs about $30 billion net of boom, bust, IRS, you name it. I think some of the distinguishing characteristics of our firm that may be a little unusual is that three out of the four partners still read and write code, still understand ship design. If you show me a 10 million gate design and you're lying to me about the clock tree, I will know. And we've really enjoyed doing really fundamental stuff. We're the seed investors and Zen source. We're very early on in Verisign and a number of our companies in the security space are important parts of Google and VMware and Facebook and some other demanding customers around the world. And we love this stuff and I'm very happy to be here today. Good afternoon. My name is Ping Li. I'm a partner at Excel. I've been doing venture investing for close to 10 years now. Excel is an early stage venture capital firm. We've backed companies over from the seed stage to the growth stage. Office here in the US Silicon Valley in London, China and India and our goal is to always find exciting entrepreneurs that are trying to build category defining companies and been investing in security for quite some time and look out. It's just one of many companies we work with. Hi, I'm Deepak Jeevan Kumar from General Catalyst Partners. We are an early stage and late stage venture capital firm with 2.5 billion dollars under management and we have backed companies across multiple industries including cybersecurity. Some of our investments that you know of are Kayak, Airbnb, Stripe, Snapchat, more recently. And we also have not shied away from hard technology investments. Actually, Axel and Naz used to share an investment called BBN Technologies where the early internet research was done and one of our companies called Reveal Imaging did a hardware for bomb scanners and they had only one customer called a TSA. So personally, I started writing code when I was about seven or eight years old. I don't remember now. And the first one was Logo. I don't know if you guys have ever used Logo before. And I have hacked quite a bit and I think I was lucky to be involved in two of the largest supercomputing projects. I was an architect on those projects in human history. So happy to share and happy to. I hope we can convince more of you to become entrepreneurs in cybersecurity. So it's interesting. So this is my 11th year at DEF CON and I can tell you when I first started coming, it's not something I would have expected to see venture capitalists at DEF CON and it's definitely changed a lot as time has gone on. Just the interest from a mainstream capacity in cybersecurity in general has changed a lot as this technology has touched the fabric of society and people's everyday lives. I'm curious, what are you guys looking for? I'm sure a lot of people in the audience are curious as they're building projects and whatnot. What is it going to take to get funded by a venture capitalist? What are the types of things that you look for when you're looking for a security investment and looking for people at a conference like this? Okay. We're still going in reverse order. Because it says number four here. So I would not, I won't address the technical side of it because my background I think you could tell from the introduction is not, I'm not a hacker despite the shirt that I proudly wear. I can tell you that, I would say two things in terms of what do we look for in a security investment. I mean, the first is obviously we look for something that has a wide applicability so that the market opportunity is big. And if you think about how you can leverage a large market opportunity, one of the key things is are you leveraging something beyond just a security solution? So a lot of security solutions are frankly point solutions to address a tough problem in security and you can make some nice companies out of that. But if you're also leveraging another major trend, so for example, enterprises moving to the cloud and cloud based applications. So one of the investments we made at Andreessen Horowitz in which I'm on the board is called Cypher Cloud. And what Cypher Cloud does is essentially allow people who use Salesforce and Office 365 and Gmail and Box and other cloud based applications. It allows them to secure the data that's in the cloud such that if a government organization sites the Patriot Act and says to Salesforce give us all the data for XYZ company, the data is encrypted. It won't be meaningful. So it's therefore protected. And when you're in a heavy regulated industry, that's something you need to address. So there's a company that not only has solved a security issue but is also leveraging a broader trend in technology which is people moving workloads from on premise into the cloud in one form or another. So that's an example of looking at an opportunity that might be bigger than just a purpose built specific solution to a security problem. And the other thing I would say is that we look for really smart entrepreneurs that are super motivated that really have a lot of drive, a lot of ambition and really want to be successful. And so when you put those two together you have kind of a winning formula. So I think John makes an excellent point. Big markets are important. But in a number of the investments that we've done, some of which actually ended up being co-investments with Ping's team at Excel or John's team at Andreessen, as they went through the end of their seed stage or into later stages, are distinguished by not addressing a big market today. So half the Fortune 500 runs, or more than half the 500, 90% of the Fortune 500, 95% runs these Potemkin village anti-virus systems. That's a big market. You can say, hey, 10 bucks on every aging desktop PC for the U.S. and other G7 countries is a big market. We have no interest in that. We're interested in the stuff that's going to cause a CIO or a CSO to, in a late stage, adopt a company three years from now to panic and say, I must have this at all costs. Because one of the dark but unspoken truisms in venture capital is anything worth doing actually takes a long time. And all these sort of huge fantasy outcomes that are celebrated as overnight successes or inevitable successes, like a Google, are actually took seven or eight years of really hard work. Things like Nassirah and congratulations to Andreessen for having the foresight to invest in that are kind of random events. So when you're building a product, it's doing something meaningful. By the time you've got it polished and by the time somebody that's going to pay you actually gives a crap, it's been a couple years, maybe more. So if you're looking at stuff that will motivate a customer today, you've already put yourself out of the running. So to do that, to John's point takes incredible intestinal fortitude. It takes people who can solve difficult multi-dimensional problems about how to run their company and keep their team happy and keep their customers happy all at the same time on limited amounts of money. And because you're going for the gusto for something in the future, it takes incredible tech jobs. So I mean, everybody on this panel is motivated not to invest in MeToo tech, even if it's looking three years out or something undifferentiated, we want to see stuff that has sustainable competitive advantage. And so two interesting examples. We're in a company called Sentinel that we did with Ping's crew at Excel. Those guys are standing a lot of existing security assumptions on his head. They're doing something very, very interesting that actually produces deterministic results for important stuff and runs only in user space. They don't hook the kernel at all. I was astonished. I didn't believe it. It took me a long time to understand it. But it's light years ahead of anything else out there. That was worth doing. We're in a company with John and his team at A16Z called Elumio that's doing things that people said was impossible to enforce security for fungible workloads in the cloud. And by the way, John, I think it's fair to say that when those guys started doing that, most people were disdainful that real corporate compute workloads would move to the cloud. So anyway, I hope that's useful. Yeah, the one point I would echo that Matt just said is some of these security markets that become really large are not obvious at first. And China, the great entrepreneurs are the ones that kind of see around the corner. And I remember when we first invested in John's company, John Haring's company years ago around mobile security, the Android phone didn't really exist. The iPhone was just shipping. It wasn't obvious there was going to be any security problems on the mobile phone at the time. And having that foresight to be that far ahead of the market and understanding where the hackers are going to be I think is a real set of instincts that we look for. Security is particularly hard to invest in because it's an arms race. Every time someone comes to our office with a great idea, there's ten hackers out there with a better idea that's going to get around his great idea. So you really have to find entrepreneurs that we found that really have been coming to DevCon for the last X number of years. They have to be in the cutting edge of whatever the hacker community is thinking about and pushing the envelope on. And that's really hard to find. Folks that actually understand the problem but also understand the opportunity to build a company around, that intersection is really rare and that's kind of what we look for in security. I totally agree with most of those points. One thing that I would like to add is that we are at the intersection of three major trends at the same time in the history of computer science and technology. Mobile, cloud computing and big data. A lot of people have written about this. But what that means is that we are going to see multi-dimensional security problems that we've never seen before. So it is an amazingly good time to be thinking about innovations in cybersecurity. I actually wrote an article yesterday on the Forbes on cybersecurity for the app economy. But the point I make is that we have to make tools that are faster and more better than things that I've seen before because of this multi-dimensional problem that exists today. And in terms of the entrepreneurs that we look for specifically, number one, you need to be great evangelist of your product without overselling it. Then number two is you should have the ability to look around market changes because markets do change. Human behavior changes very rapidly than what we think it does. And to Pink's point, yeah, you need to be best of breed in what you do. And you need to stand the test of your peer groups who are almost as good as you are even better than you. John, if I might, I guess broadly speaking, everybody in this audience is kind of in the cat bird seat for building a company because as much as fluffy consumer companies get love and attention and big valuations, that's actually not where the real money is. And everybody in this room is probably aware of somewhere between a mini to a full scale security holocaust that's in process. I mean, I'm pretty convinced that RSA up to 512 bits is irretrievably broken, which means every bank and web server and DNS cert out there is effectively vulnerable right now. I'd say that's a pretty large problem. And the only alternative, you know, I mean there are alternatives. The only practical one is stuck rotting away inside of RIM. So there's a giant $10 billion company right there that I don't see anybody doing right now. You know, people are fantasizing about the so-called Internet of Things. I can't even leave my Bluetooth on here because I'd really prefer not to pay for your guy's next vacation. And so everything from my future pacemaker to the electric meter on my house to the thing that orders food for my kids in my refrigerator circa 2020 is going to be produced by the same ass clowns that can't even have effective security on my phone. So, I mean, John asked a really good question. What are we looking for? Well, the answer is we're looking for you guys to step up much as John did when everybody was pretty smug about the idea of mobile security, shock the hell out of us and produce a giant solution to a giant problem that nobody was thinking about. And also, I'd really like to not pay for your next vacation in the process. I turned off my Bluetooth. Yeah, well, I remembered to turn off mine about an hour ago. So let me ask the opposite question. So, you know, you meet lots of people working on super interesting projects, many of which, you know, can be intellectually interesting that many times won't end up being a business of the scale that we've talked about, billions of dollars. That doesn't mean it's not interesting. When does it make sense not to raise venture capital from someone like yourselves? Like, well, you know, how do you think about the difference between the types of things you would want to actually fund and the types of things that someone might want to go turn into a business, but it doesn't make sense to talk people like you guys. Are we pushing or popping the stack, John? We're pushing this time to you. I'll try to be as brief as I can. There's a concept in finance called net present value. How many of you guys are familiar with that? Awesome. That's a disturbingly well-educated hacker crowd. So the dirty secret or the other dirty secret of venture capital is that your NPV utility curve and the VC's NPV utility curve can diverge pretty rapidly. So thanks to a feature of preferred stock investment, most VCs get the right to keep investing in your company every time you take money, which means as long as we have deep enough pockets, our stake doesn't go down and it may in fact go up a little bit. Your slice of the pie as more new dollars pour in is in effect reduced over time as you continue to build a company. So if you build a really giant company and you and your founding team own 10% and you sell it for a billion dollars after 10 years, that's 100 million bucks. That seems like a pretty good outcome. But if you own 80% of your company and you sell it for 100 million dollars two years into it, that's 80 million dollars. So you would have had a better NPV selling earlier than later for a supposedly more impressive number. And when you factor in risk, building billion dollars of outcomes is really freaking hard. You're definitely better off selling for 80 million bucks in two years. Now that's also that magic outcome is hard to do and I'm picking deliberately simplistic examples. But when you are pretty sure that you have a point solution, I think as John referred to, that solves a really difficult problem that's quote unquote awesome family business. Makes 10 or 15 million dollars a year with great cash flow for you and your friends. That's probably not a business that you want to take venture capital for. There's no reason for you guys to dilute yourselves. If you need money, take angel money, keep 80% of your equity and you know when one of the big bruisers panics and realizes they need this point solution and pays you 100 million bucks, laugh all the way to the bank. If you are doing one of these global platforms that John and Ping alluded to, the kind of thing I alluded to like replacing all of RSA, then you probably need venture capital. You probably need people who have been through it before whether they are CEOs like John or other former operating guys like Ping to help you build that gigantic business. So that's kind of how I see the world. I'll give two examples to kind of put a finer point to what Matt is saying. The answer isn't always venture capital. We are currently an investor in a company called Tenable which is the guys that created Nessus and that company was bootstrapped by the founders for I think five, six years before we even put any money into the company. And it was profitable, growing very rapidly Nessus is a very popular globally scanning tool. And they didn't need the money because the business could fund itself and they didn't need someone like myself because they knew they didn't need those resources in the network to grow their business. It was growing very fine. And in the last year or so they decided they saw a larger opportunity around going global, about attacking, extending the product line where they needed additional capital. And more importantly they needed a partner that knew and had experience in expanding the business in ways they haven't expanded before. So the decision to make and take venture capital was less about the money given since the business is profitable but more about the expertise and value add a partner can bring. In the case of John Herring's lookout it was very different, right? Obviously from the very beginning they were going after an exploding market in the mobile security space where speed to market, time market and getting out ahead of the mobile platform which is getting innovated by Google and Apple was a precondition they just had to deal with from day one, right? So venture capital was needed to accelerate the business and also helping scale a team and do other things around company building was needed day one, right? So I think it all really depends and I don't believe for the majority of the businesses out there that you require venture capital I think it's something that you should look at deeply before you take money because as Matt says once you take money from another partner it's a partnership and it's not a sole proprietorship anymore and that's a very big transition. So I think it really depends on the opportunity and what you want to do. If I could jump in I think Ping makes a great point that sometimes there's a perception that what venture capital is you get money and then you see comes your board meeting hoping you're doing well and that's... You really do in the early stages if you do it decide to accept venture funding you really do need to look for a partner you really do need to look for a firm that has people and services that will add value to what you're trying to do I mean these firms you see up here are all firms that have done a lot in security so obviously we all have resources that help you be successful. At Andreessen Horowitz we have a thing called the Executive Briefing Center that John knows about that we bring in chief security officers and government officials and all sorts of people on a weekly basis and bring in our portfolio companies and they get to present to people even before they've released the product to test the market for their idea and as they mature like John's company has they get to talk to real buyers of the solution and that's a real big service that for example Andreessen Horowitz we bring for our entrepreneur so to Ping's point you really do want to pick a partner that's often both the firm and the individual partner at the firm that's going to be your chief liaison and help you grow the company and actually I want to chime in and amplify John's point it's not just the firm it's not brand there's a company that John and I actually have in common that's desired right now by a lot of people in the venture capital community and they they met with one of the very senior guys at one of the top 10 firms in the world every fortune, Forbes, article you know New York Times, Wall Street Journal, TechCrunch I mean however you want to view kind of external validation this firm had it and to some extent this guy had it as well and he was such an arrogant dickhead in the meeting that the entrepreneur said not only will this guy not be helpful however giant a check he wants to write but he'll be actively harmful and by contrast and in credit to JJ the entrepreneur said look what I want is somebody like JJ who's an operating guy who's done real stuff who's been through good times and bad times helped me move a little further down the road basically said I want another partner because I'm stuck in the boat with this person for 10 years and you know Ping and his team are successful in this because they act like partners and the entrepreneurs that we fund early on like both of these firms because they're happy them. We're still waiting for Deepak to start writing checks so this is a gentle nudge we got a few for you so let me frame this problem the problem is this as an entrepreneur the odds of failure are far higher than the odds of success there's history, there's data, you can read it anywhere so every step you take every meeting you go to everyone you talk to should be able to increase the odds of success that's the fundamental underpinning here so all the top venture firms I can say are making are there to help you to increase the odds of success through introductions to the top CISOs helping to find the right mentors for you finding a mentor is really really important I never underrate that so I think most of the top VC firms can help you do that the other thing is you know when do you not take venture capital money to your question if the business is low risk you know one small check that we do is okay can a bank lend to this company for expanding their business definitely not and it's not a VC investment we look for really high risk investments that need to grow really fast banks look for low risk investments that don't go that fast so typically venture capital money is going to help you go from 0 to 10 million to 100 million in like 3 to 4 years in that situation no venture capital money is a good fit so maybe I can share a quick story for those who might be interested and are thinking about starting companies on the flip side of all of this too is you can hear an infinite amount of no's but you only need to hear yes once and it's really important to keep that in mind I remember vividly when we were first getting off the ground we were doing obscure wireless research and a lot of mobile stuff and there was not a lot of interest in what we were doing at first what our early angels did but most of our investors that we pitched did not understand what we were doing at all and it's really easy to get depressed when you're running around trying to raise money and everyone's telling you you're basically an idiot but having the fortitude to continue on I think is one of the greatest lessons I've ever learned in raising venture capital and it never gets easier you just get better and hopefully the market's on your side but remember I don't know if you sometimes it takes the irrational reasonable people will work on reasonable problems but consensus accurate predictions never yield outsized results really important thing to understand the outliers come from things that are not obvious and unreasonable people will work on unreasonable problems thus you probably need to be pretty unreasonable to do something amazing and this guy Vinod Kosla for those who don't know who he is can be an unreasonable dude and I'll never forget we were pitching him and everyone had been telling us no and halfway through the meeting he's like alright I've heard enough this is horrible and he's like I'm in, what's the valuation and he literally wrote us a 5 million dollar check that afternoon and I've never experienced anything like that after hearing no's for just like 50 no's and then something like that happens and then not long after that Excel got involved and the company really started to take off and there's definitely a world where this company never would have even existed and so we've kept going not because we were there to make money and not because we were there to build a business because we love what we do I mean there's 140 people at DEF CON from Lookout we're a much bigger company now and it's who we are like nothing's changed even when we're a lot bigger and that's really exciting to me so I think it's something really important to think about is everyone here starts businesses the foundation's in passion and it's a lot about having the fortitude how do you think about spotting the non-obvious investments like when you see deals that you're willing to make a non-obvious investment and I'm curious Pena you've done a bunch of these what are the things that you look for in an entrepreneur when you're willing to make a bet that seems really out there I think the at least the way we think about Excel the venture guys don't come up with the ideas we never confuse ourselves with the entrepreneur so what we look for is for the entrepreneur to provide that inspiration and it really is from going out and talking to as many entrepreneurs as you can the reason I'm at DEF CON isn't because I'm going to win any competition or anything like that it's because I can spend time with what I think are really smart people that are thinking about things 10, 15 steps ahead of what I'm thinking about and our job as venture guys is just identify those people that have those insights so it's really in some ways I always say the best entrepreneurs are the ones that convince me that doing the impossible is actually possible because we sit there every day and we say hundreds of ideas and there's thousands of things wrong with every idea but there's always that one entrepreneur that comes through the door and for some reason every question you ask of him or her, the answer comes back and you're like wow this guy may actually pull this off and that is really actually possible and no matter how you poke and prod them they've thought through every single angle of the problem I can't tell you how thoughtful the entrepreneur are that we back in whatever space they're in it could be big data cloud, security, mobile they've literally thought through every single possible permutation of the problem from the customer's angle from the business model to every single angle and it's really that that kind of gives us conviction not to say they have all the answers in the question so that's kind of how we end up finding ourselves backing entrepreneurs oftentimes in spaces that we did not have any idea or know anything about before we worked with that entrepreneur I would actually echo that I joked earlier in the kids presentation where we're trying to drive our investment limit down to nine year olds we're working hard on this there's no law against that it's not child labor as long as the LLC is in the dad or mom's name so kidding aside what I said there is I want entrepreneurs who will make me feel like a moron and my wife would say that's actually not very hard but what I would say is to Ping's point you can be in a meeting with an entrepreneur and I've watched this process both at Excel and then Jason Horowitz in my own career deals we have in common you think you're being very clever you know the entrepreneur you know I'll pick a fairly abstruse example the entrepreneur is doing something that for some reason involves zero knowledge proofs maybe it's a hobby of yours maybe you read a couple of the scientific American articles IEEE spectrum or ACM proceedings thing in Magiggy and you think you've actually caught this person out and they're nine steps ahead of you and by the way everything else that you ask you have the sense as the big baller VC that you're a child that this person is patiently explaining how the world really works and that's when you know as empirical as we try to make VC that's when you get the gut feeling especially if the person is passionate and engaged and driven about what they're doing that this is a human being that you can back that they have this combination of as Ping said all the answers but the fire in the belly to go through with it and you know John you come across quite a guy but clearly you have the fire in the belly as well as all the answers when Vinod stopped you halfway through one more thing is we're wrong all the freaking time so to John's earlier point or his earlier story you can't look at a VC saying no as a valid condemnation of your dream or objective or goals you have to look at it as a fallible human being or group of human beings with incomplete data making the best literal guess that they can and by the way nos are good I mean one of the things that we pride ourselves on is no matter how crazy the idea we will write a couple of paragraphs that explain in detail our decision making for the know we never send an email saying it's just not a fit all right check you later we say hey look you had this product flaw and we talked to the four customers you asked us to and they were lukewarm and you have 17 competitors you only listed four the market may be more crowded than you think and a lot of the time we get a thank you instead of an FU even when we say no this is the one conference you have to say fuck on stage I've always wanted to do that I've been doing a lot of panels first time I could say fuck I just wanted to get that out I guess being is luckier because I've had entrepreneurs on occasion invent entirely new mathematical symbologies to tell me how bad they wanted me to fuck myself but but John's absolutely right you can't take a no as definitive and I think when you do get a no the one piece of feedback that I have for everybody in this room is demand demand the reasoning behind it and use it to go strengthen your pitch go see Vinod apparently he writes five million dollar checks so I think we've got about 10 minutes left I want to make sure we have time for Q and A so there's two microphones right there for those who want to ask questions we'll start over there so let's talk about the logistical process of how you get started so you've talked about it from a hypothetical at what point are people interacting with you when they have a full-fledged product like a prototype obviously it's going to be different from hardware software hardware is going to have a lot more capital expenditures begin with but let's talk about some of the logistics well the so from my personal experience not as a VC but as someone who started a company I don't think you I don't think you need to wait at all I think you can start building relationships with VCs by you know you get introduced or you introduce yourself and you simply say I have a concept I'd like to talk to you about most VCs to I think Ping said it earlier want to talk to as many entrepreneurs as possible and you can come in and say I'm not ready to raise money yet but I just want to test the waters with you with this kind of concept and good VCs will not only test the waters with you but they'll give you advice about you're thinking about this right or have you thought about what your co-founders would look like or you know one thing that I tend to tell a lot of people is you can't just invent a product without thinking about how you're going to get that product into customers' hands early on like you don't want to build this huge monolithic thing I'll give an example that requires an appliance and an agent on every end point you know it's just not going to get sold it may solve a problem but no one buys technology now that requires something implemented on every end point so yeah, you don't need to wait you can start the process right away and don't be afraid that oh shit I didn't have a grip this is the place you can swear right I didn't have a great meeting so now I screwed my relationship with that particular VC if you did then that VC is not the right VC anyway on the left hello okay so here it is you talked about the impossibility so I'm from New Jersey you've ever heard of the expression waste management so I'm in the business of eliminating and killing and crushing foreign adversaries for child pornography now that's an impossible attempt to go against foreign adversaries, organized crime figures people who actually don't want to actually step up to the place so I'm in the waste removal business something that nobody can say no to because if you say no you're saying no to helping kids why challenge a panel right here, right now I got the technology, I got streaming data I got security, I got everything you possibly imagine to get these people off the streets Russians are making 8 billion dollars a year just in child pornography alone and they're selling it through cyber security other areas under the radar so what do you guys think about an issue that actually collectively helps save the youth of the nation that people say it's impossible to do who says it's impossible everybody says it's impossible to address this because nobody wants to address the issue because of the ugliness of the intellectual property and the issue that goes along with it nobody wants to stare at 80 million kids being raped in video alone nobody wants to go through the process filter it to decipher it and then put it in the right position and then remove it and try to figure out how to get it out of the hands of people who then would actually not want to have it or creep up on social media so two comments one it is sunny here in California I think we got a better attitude about the impossible than maybe in Saqqaqis so come visit the second thing is I can't speak to my fellow panelists I know some of them had tight schedules but I will come find you and I will listen for 10 minutes about the impossible idea and I will give you the best advice that I can any other opinion on the panel I'll be outside right after this is it just you or nobody else who didn't come I have no idea what my colleagues can do but I will step up great over here on the right yes hello I'm an internet veteran from decades back my question is when are ideas too big for you guys to be interested on you talked about cypher cloud something like that well I come from maybe a slightly different universe from this crowd from the standards field and there's this gone through this multiple times in the past but currently there's something called DNSSEC could be a platform for a whole bunch of security solving a lot of problems maybe eating some security vendors lunch as well and I've heard when I'm looking for interest from investors just to not to make money myself it doesn't happen I get well you know Rick that's a big play that's too big that's too rich and so you were talking about looking for the I mean I understand maybe it's one out of ten then you're doing really good if you're successful so I understand risk is not something you're afraid of but I'd like to get maybe a one-centage short little response about when is something not appealing at all to you guys that's just too big well I couldn't hear everything but just your question about when is something too big there really isn't anything too big and when you're in the venture capital business we're about finding big opportunities I think the thing that I would think about with your particular opportunity is to actually break the problem down into smaller pieces don't try to solve the end state right from the beginning I think a lot of entrepreneurs see the end state the market or the the industry may not be as far along as where you want it to be so one of the failure modes we've seen a lot of companies is being too early to a market and just making sure that you line yourselves up with market realities and we'll play out over time sometimes things take longer or they take a path that's slightly different so the end state is usually bigger than what anyone imagines but how you get there sometimes is very different I think a lot of people try to do the big thing first so be patient I guess great thanks so I'm one of these people that has an idea I'm not ready to come to venture capital yet and because what I'm working on is two factor authentication behavior and bio in one fell swoop I'm going to need to put an end point and appliance on every end point unfortunately that's just the nature of the beast how do I it's required software and hardware the hardware has been invented but not in the right size and the software somebody could program it that's not me how do I get it to a point where I can bring it to somebody to get some money so I can hire someone to build the hardware the size I need it and do the program because I don't have the money how do I get it to a point where I can get some help you can come today and then we can talk about it and to an earlier point here it's okay to go to VCs before you're ready before the product is in the market so we can give you advice on what we have seen on how to bring this product to market I'm assuming I need to have you sign an NDA VCs don't do that yeah we normally do not sign NDAs so maybe I can chime in here okay a couple things one the only purpose of an NDA that you can argue for is actually in the first to file patent regime which would be to protect protect you from future claims by somebody that you'd exposed your information in public and therefore you couldn't patent it as it turns out if you're talking to somebody about financing your company there's an exemption in the law for that that applies internationally so you're not jeopardizing your patents by talking to a VC under first to file and VCs can't sign NDAs because all it takes is a small handful of surly people filing nuisance lawsuits and not our money but our time is then so consumed in that kind of litigious regime that VCs would just stop investing in promising young companies so literally to protect, to achieve community not signing NDAs is a form of vaccination as far as what you want to do even if it's not the right thing for a VC there's Kickstarter and a whole bunch of other crowdfunding stuff there is Angel List we know the guys well there we're actually investors in that platform that's a awesome way of getting like-minded people to back you and you know what I don't know exactly what you're doing but if you showed up you know hey I've got something that plugs into a USB port or it works over low power Bluetooth next generation of laptops and I can provide bullet proof authenticatable security locked to an individual human being you know maybe that's my sign in for my true crypt I can unlock true crypt with your gizmo you're right with me keep going half a million dollars of human beings interested in that on Angel List or Kickstarter without a huge amount of effort so I say go for it Matt's going to write you a five million dollar chart congratulations you need another 30 minutes before I write you the five minutes so make the time unfortunately we're out of time but I know the panelists will probably be up here after for questions so anyone who does have questions just come on up and grab the panelists after let's thank everybody appreciate it