Friday, April 19, 2013

Blog 10: Why Cyberattacts are a Threat to Start-up Investors

The recent news coverage on cybercrime continues to be alarming however are investors taking cybersercurity seriously or just shrugging the news off?

Between these attacks there are underlying areas which include online theft. This online theft is aimed at stealing intellectual property, which is why companies should be cautious and take cybersercurity more serious. Of course we remember the news on cyberattacks from China that have been circulating in news since earlier this year. This includes attacks on major banks, news organizations, and technology giants. What this article is aimed at is making companies, especially new companies, aware of the fact that tech-driven start-ups and growth companies that are often far more vulnerable to an attack.

So why are hackers aiming at these young companies anyway? Well innovative companies, like Google and Instagram, all were built on a foundation of intellectual property rights! This means that they have little more than a few great ideas, a unique business model and some computer code. This is easily accessible to them as well.

A misconception companies have is thinking that cybercrime is an expensive annoyance, or part of politics, but in fact this is not the case. Cybercrime is, “a potentially devastating blow to their brand and their competitive position.” In other words it risk valuable property that can be compromised. And instead of going up in their business they will go down.

A study by Kaspersky Lab, which is a technology security firm, found out that a Chinese hacking ring infiltrated the servers of dozens of video gaming companies. One of them includes a privately held company in the United States that develops and publishes video games.

In the fast world of business you can not just assume the executives running these private companies are spending on digital security. From the article they explain what they see as the answer: the truth is that some are behind the curve in demanding protections against cyber risks, and unwittingly adding significant risk to their own investments.

Melanie Maldonado

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