Imagine you're considering purchasing some real estate, say a house. You have likely been at several viewings at this point when you come across the perfect house, and it looks beautiful. The walls are painted, the decor is stylish, it fits your budget, the neighbourhood is what you have been looking for, and the landscaping is pristine. You are a smart buyer, so before you close the deal, you decide to hire an inspector to check what’s beneath the surface.
You would do the same if you are an investor looking to invest in a start-up. And If you indulge us a bit into this allegory, an inspector or an outside expert will be looking at the following:
Cybersecurity due diligence is that inspection, ensuring that the technological foundations of a startup can support the company’s future growth. And as we all do when we consider making a big purchase, investors want to minimise risk, so they will want to carefully evaluate a company, including its security, before making a deal.
In this article, we will discuss proactive cybersecurity due diligence as a means to help newly-growing companies secure funding, build trust with clients, and ensure long-term success while we also provide you with some practical tips on how to prepare ahead of time to protect your data, reputation, and growth opportunities.
When you are growing aggressively and making use of all your resources, money and time included, it may be easy or tempting to overlook cybersecurity. Maybe you also lack expertise in cybersecurity, or your resources are constrained. But if you are a startup and you are looking for funding, regardless of whether from venture capitalists, angel investors, or corporate partners, you will most likely undergo a due diligence process that includes a review of cybersecurity measures.
Investors will recognise that data breaches, ransomware attacks, and regulatory violations can derail a startup’s progress and diminish its valuation. Naturally, they will prefer to fund companies that proactively address cybersecurity and demonstrate operational maturity.
All this is to say that a strong security posture will signal to investors that your startup is prepared for scalability and compliance.
Let’s also not forget that compliance is a key aspect of cybersecurity due diligence. Depending on the industry and geographic reach, startups will need to comply with various regulatory demands, and a failure to do so can lead to serious fines, legal battles and, worst of all – loss of trust.
Furthermore, we need to consider intellectual property. Especially for growing companies, this will be among their most valuable asset. Intellectual property could include proprietary algorithms, software code, product designs, or more. So, protecting your intellectual property and your customers’ data could be a good reason to approach cybersecurity due diligence proactively.
Lastly, a security incident will shatter the trust of your customers, investors, and partners. Startups without a strong brand presence may find it even harder to recover from a breach, as customers may prefer to switch to competitors with better security assurances, and misconceptions, such as "we’re too small to be targeted", can lead to the unpleasant realisation that in 2025, no one is too small to invest in cybersecurity.
The foundation of a company’s cybersecurity posture will be laid within the framework of its strategy. And for a growing company, this strategy should be proactive, scalable, and adaptable to the evolving threat landscape. A good mindset to adopt in this regard while growing is a cybersecurity-first mindset, where leadership actively promotes a security culture through investment, training and robust security controls.
Easier said than done, of course, but there are some common guidelines we have considered in Figure 1.
Although some parts of this process might best be realised cyclically, at the base of all efforts comes a risk assessment.
Whether through conducting security audits or through an internal comprehensive review of your organisation’s IT infrastructure, policies, and controls, a thorough risk assessment is needed to guide you in examining assets, access controls, and software and network vulnerabilities and policies.
Regular audits or internal assessments, on the other hand, will help you proactively detect security gaps, demonstrating a commitment to cybersecurity to both investors and clients.
Following a risk assessment, you will assess and improve your foundational security controls. For startups, those controls need to be lightweight but encompass your operational context thoroughly. A minimum baseline for operations will include:
Depending on your industry or regulatory context, more robust security controls might be needed.
You can include vendor and third-party risk management in the basic security controls, but we chose to separate them to improve visibility. Supply chain attacks are on the rise, and startups, as most companies, rely on SaaS tools, third-party APIs, and cloud providers to scale their operations quickly. These dependencies introduce cybersecurity risks that must be managed proactively.
Your cybersecurity due diligence efforts, in terms of supply chain security, would naturally concentrate around:
We have mentioned regulatory compliance already. Startups are not spared when it comes to compliance with industry regulations, data protection laws, and potentially - investor requirements. Being proactive in building a strong regulatory compliance posture will demonstrate your maturity and risk management to potential investors and partners.
Besides obviously identifying applicable regulations, make sure to define how customer and employee data is collected, stored, and deleted in compliance with local regulations. A marker of maturity is having a policy and protocol for incident reporting and disclosure for customers, regulators and relevant stakeholders, including investors.
Preparing for incidents in advance ensures minimal damage and a faster recovery.
All of these measures are meaningless in case employees are not empowered with the necessary knowledge and skills to perform their responsibilities with regard to the cybersecurity policy of their company. Your people deserve to have all your support to succeed and feel confident they know what to do, which comes with training and exercising.
A cautionary note about training is that the most effective way in our experience to enhance cybersecurity due diligence without overburdening limited resources is through custom-tailored cybersecurity training. You will likely operate in fast-moving environments with unique risks. Instead of one-size-fits-all cybersecurity training, look for customised programs that focus on industry-specific threats and address real-world attack scenarios relevant to your operations.
To maintain a lean approach towards utilising your employees' time and your budget for training, we recommend that employees be trained based on their roles and responsibilities in the incident response plans.
Last but not least, as your company grows, its cybersecurity needs will evolve. Which is why you will need to tailor your cybersecurity due diligence effort to your growth stage.
Your cybersecurity strategy must plan for scaling security measures in line with expansion. Depending on your operations and your growth needs, you might need to invest in dedicated cybersecurity experts or in security process automation, for example.
At this stage, you are likely focused on product development, securing initial funding, and acquiring early customers. With limited resources, security should be embedded into the startup’s DNA from the outset, following "secure by design" principles. Some key priorities you can focus on are:
Prioritising Cybersecurity Fundamentals
Concentrate on Building Secure-by-Design Products
Actionable Steps
At this stage, startups experience rapid user growth, onboard more employees, and begin working with enterprise clients or regulated industries. Cybersecurity thus needs to become more structured, requiring formal security policies, risk management, and compliance initiatives. Some key considerations:
Formalise security!
Conducting Regular Security Assessments
Actionable Steps:
As startups expand into larger markets, sign enterprise deals, and prepare for IPOs or acquisitions, cybersecurity becomes a core business function. You must now meet regulatory, contractual, and operational security expectations at an enterprise level.
Establishing dedicated security teams or outsourced security operations is no longer an option. Consider also:
Actionable Steps:
So, going back to our allegory with the house with which we started our article, it is much easier, in the long run, to maintain a home when the foundations are solid and are built to last. Cybersecurity due diligence is not a bureaucratic hurdle but an essential home inspection that ensures the structure is sound and safe before moving in so you can focus on comfort rather than necessity.
In this sense, investing in proactive security due diligence early is like installing high-quality plumbing to help you prevent costly disasters instead of scrambling to fix leaks. By embedding cybersecurity into the foundation of a company’s technology, startups can build trust with customers, attract investors, and scale with confidence.
In the end, a secure startup is like a well-maintained home: resilient, welcoming, and built to last. The key is to take security seriously from the beginning before small cracks turn into structural failures.
