Yesterday, RSA Conference made a major announcement - from now on, the top 10 finalists of its Innovation Sandbox competition will get a $5M investment from Crosspoint Capital. A few thoughts: 1) This makes a lot of sense for both RSAC and Crosspoint (which acquired the conference back in 2022). Over the last 20 years, the competition has helped identify some of the leading #cybersecurity startups (e.g. Wiz, Imperva, SentinelOne, Phantom Cyber, HiddenLayer) well before they became household names. Finalists have raised over $16B after being featured with an average of $30M at a 3.2x step-up in valuation in their first subsequent financing after becoming a finalist. 2) The high level terms of the investment are very founder-friendly. It's structured as a simple YC SAFE with no valuation cap and sliding scale discount (5-25%) based on a time interval. 3) Given this is a requirement for becoming a finalist, it'll be interesting to see how founders and their existing investors perceive this investment. The structure does mandate pro-rata and information rights. I'm very curious to see how this is received by the #founder and investor community. Either way, the Innovation Sandbox is here to say and I'll be watching who the judges pick as we go into the 20th year! #RSAC2025
Stephen Ward
3w
At a loss for words. Not smart at all.
Brian C Reed
3w
Key point: Optional or mandatory investment? if mandatory screws up founders and existing investors.
You have to take money to be considered a finalist? That sounds like pay-to-play and it dilutes the message associated with being a finalist. Now you’re one of the top 10 that wanted to take the money from Crosspoint.
Did they mention grandfathering? :)
This changes the entire dynamic of the Innovation Sandbox in my opinion. It's not a reflection on Crosspoint at all, but as a founder, any time something would force me to take an investment of a non trivial size my spidey-sense pops up. I would also argue it significantly reduces the perceived fairness of the competition and indirectly the media value of it for the founders.
Ryan Naraine
3w
I wrote about this yesterday: "Every year, hundreds of security startups craft pitches to snag a coveted finalist spot but now that it comes with a mandatory investment, the jury is out on how vendors — and their existing investors — view the PR value of the Sandbox contest with possible dilution and questions around investor/vendor fit." https://www.securityweek.com/rsa-conference-will-take-equity-in-innovation-sandbox-startup-finalists/
Wow.. this is 100% a box-out move by Crosspoint Capital. They are forcing their way into some innovative cyber companies if they want to receive the marketing backing that comes with being an innovation sandbox finalist. It's a net negative for the vendors to be required to participate in the funding round, especially with the pro-rata and info rights. However, the uncapped part of the safe is a founder-friendly component. All in all, it's a bad move for the innovation sandbox as a whole because plenty of vendors won't apply if they don't need to hit that big marketing push to get to the next level. It's a bit slimey, TBH.
Will A.
3w
Cyber SharkTank: The conference formerly known as RSA. Hadn't heard this. Thanks for sharing. 👍
Vishal Nakra
3w
Are they tired of getting locked out? The winners all get term sheets anyway...now the winners have to pay ("receive" really) to play? Spicy.
Partner at Foundation Capital
3wMore details here: https://www.rsaconference.com/library/press-release/rsa-conference-2025-innovation-sandbox-contest-celebrates-20th-anniversary