Brian White: Managing Director of Piper Sandler

Marc van Zadelhoff: Welcome to "Cyber CEOs Decoded" where we speak with leaders from established security giants to up-and-coming disruptors, getting the inside track of what makes a cybersecurity company tick. I'm your host, Marc van Zadelhoff, the CEO of Devo. And, today, my guest is a different angle on the cybersecurity CEO, it is Brian White, who is a well-known leader in the cybersecurity community and a managing director at Piper Sandler. So, we're going to spend this episode talking on a totally different, but critical, angle to being a cybercity CEO, which is how do you engage with the market on areas of corporate development, M&A, selling your company, getting to IPO. Brian, welcome to the show.

Brian White: Hey, thank you, Marc. It's really a pleasure. I'm excited for this. This will be fun.

Marc van Zadelhoff: Yeah, looking forward to it as well. Brian's a busy guy so we're going to pace pretty quickly today. And I hope you enjoy him. Like I said, I think it's going to be a real chance to change the angle on the cyber CEO conversation. I think a lot of people out there, Brian, they don't have the faintest idea of what happens to make these deals happen. There's, you know, news clips right now about SentinelOne talking to Wiz and back and forth there. And I see on LinkedIn people commenting on it, not that you're going to comment on anything specific in some of these things, but, you know, what really goes on to make these deals happen or to make them collapse. So, we'll spend some time there.

Brian White: That's terrific. No. There's no shortage of topics to discuss on the deal side, particularly in cyber. It's obviously slowed down, but it's one of the most active areas of M&A in the market. And I think it will continue that way.

Marc van Zadelhoff: Super. So - but I do like want to stay consistent to our show and I think our listeners are going to be interested - as interested in your background as they would be in a CEO. So, let's just start with the basics. You know, where are you from? Where'd you grow up?

Brian White: I grew up between New York and Massachusetts. I consider Boston home. I remain a proud New England Patriots fan and I wear that with great pride. But, you know, I've been in the San Francisco Bay Area for the last 12 years, and now my boys in particular are growing up as San Francisco Giants fans and San Francisco fans.

Marc van Zadelhoff: Wow. Okay, well, as we always say, there's the right coast and the wrong coast. But, okay. But fair enough. So, growing up, first meaningful paid job. Being an investment banker, we think of investment bankers that you probably were like short in stock at the age of 12. You know, give us a sense of what was the first way you made an honest buck.

Brian White: Well, it's true that we - that I've always been very interested in the finance side. I would give you two stories. Number one, you know, I really started what was known as B&D Landscaping. That was my brother and I. We had our own landscaping business where we went around the neighborhood and we mowed lawns, we, you know, carried mulch, we edged lawns. And we did that outside of Boston, Marc. And - but my first job where I received kind of a paycheck properly was at a store called Maurice the Pants Man, where I worked folding jeans and folding shirts. And I had a long career in retail. I worked at Abercrombie and Fitch. I worked at a golf shop. But I was constantly around more retail, which I tell you, Marc, really gave you such insight into people because you really were able to work closely with both, you know, your fellow colleagues, your customers and, you know, closing a shop, opening a shop. And a lot of that I know definitely influences where I am today.

Marc van Zadelhoff: Wow, that is incredible. Actually, it harkens back to another episode that we had with Wendy Thompson from SecureWorks. And if you listen to that, and I need to go back, but I'm pretty sure she worked in retail and got very competitive with a colleague. And I believe it was kind of in the women's clothing area and got very competitive with a colleague. And that got her thirst going for kind of being competitive in the business space. So, interesting.

Brian White: Yeah. Yeah, we all have somewhere where we started. And I worked at caddying. I mean, I've done a lot of jobs. I've been working since I was 14.

Marc van Zadelhoff: Yeah. Yeah, I got to work on caddying, as I mentioned that, and actually probably more formative when I actually got like a W2 and all that stuff was working in a lawnmower parts warehouse in Foxboro, Mass. So, not far from, you know, that area. And tried to memorize part numbers and putting them into orders that came in. I go back into some lessons learned in that as well. Now, you went to Syracuse and were a Division 1 athlete. But what sport were you active competing in?

Brian White: Yeah, I was on the crew team. I rowed for my college career. And probably the most formative and the most important experience that I have had and shaped me. You know, we practiced 10 times a week year-round. We practiced in the freezing cold of Syracuse. Believe me, you don't want to row in Syracuse, New York because we are out there on the lake, particularly in March when it's still below - well below freezing and, you know, late nights in the fall are well below freezing. But, you know, some of my closest friends still and some of my most-fondest memories. And, in particular, just the discipline that you learned in balancing school and balancing practice and balancing having fun. I mean, you know, one of the things that we did not do is we did not let our college experience suffer. It just became part of our college experience.

Marc van Zadelhoff: Yeah. So, your career, it strikes me, has kind of got three phases. You had this sort of early phase which is you getting into the Homeland Security area. Then you get into proper cybersecurity on the operating side of your companies. And then - and, obviously, then you shifted several years back, six or so years back into the banking side. So, tell me the early phase here that you kind of got in and you were starting off as a staff member in the Senate and then getting into kind of the Homeland Security area. Tell us about that. How'd that happen?

Brian White: Yeah, I'll actually take you a little bit further back, because I think it kind of shows how everything comes full circle in life, is that when I was finishing up my time at Syracuse, I was prepared to go work at Lehman Brothers in New York City and was - had accepted a job and was ready to go. But the Athletic Department, because I was the - I led the Student Athlete Council at Syracuse University, I got to know the administration there. And they looked at me and they said, "Well, why don't you stay and we'll pay for graduate school?" And, you know, what I said was, "Wow, that's probably a no-brainer, particularly if I got into the Maxwell School, which was the - you know, the top policy school in the country, which we always like to pride ourselves on. And I wound up getting into the Maxwell School, getting the one-year Masters in Public Administration, you know, said no to Lehman Brothers and that set me up on the course to go down into Washington D.C. first as a consultant at Booz Allen. And then I made my way to Capitol Hill during very formative times and consequential times for this country, you know, kind of right immediately after the September 11th attacks.

Marc van Zadelhoff: Wow, wow. And, so, you spent a couple years as a staff member in the U.S. Senate. Right?

Brian White: Yeah, I worked in both the U.S. House of Representatives Homeland Security Committee back when it was just starting. It was really just a formative idea where they knew that we needed to have a body, you know, one of the committees actually oversee what was then the elements of the Department of Homeland Security. This was prior to there even being a Department of Homeland Security. And then I was on a trip, which was, again, a formative experience, and I started to meet the staff from the Senate side. And they invited me to say, "Hey, why don't you come to the Senate side?" And just like politicians, staff think the same, the Senate's probably a little bit better than the House. And, so, I took advantage of the opportunity and moved to the Senate side. And I worked on both the Security Committees on the House and the Senate. And I was there to, you know, play a key role in the Homeland Security Act, the Intelligence Reform Act, the Safe Port Act, really a lot of the pieces as I say of post-9/11 America that shaped us. And really where I spent the bulk of my time, Marc, was on the terrorist travel sections of the legislation because, at that time, that was an area that we were particularly paying attention to is how the hijackers actually the U.S. And, so, that was an area, if you recall, that the 9/11 Commission really investigated. And then we put a lot of, you know, new policies in place to hopefully avoid that. So, right after leaving the Hill, I actually went to the Department of Homeland Security, which gave me Executive Branch experience and, you know, learned an enormous amount. In many ways, I learned more there than anywhere else I've been because I had the opportunity to operate at absolutely the highest levels in government. You know, and looking back on it now, it's remarkable, you know, I was able to go in and out of the West Wing of the United States multiple times, you know, a day, multiple times a week really understanding how cabinet secretaries led and ran organizations; saw - you know, took an intelligence briefing every morning at 7:30 in the morning; worked, you know, 15-16 hours a day. But it was, you know, a pinch yourself experience. Saw, you know, parts of the world and parts of the country that, you know, most people will never have the opportunity to see. But it taught me a lot about leadership and a lot about balancing, you know, conflicting priorities, and just being sharp on a multitude of issues. And I think those experiences really led me to, you know, kind of what I do now in that, you know, the key job to me of an investment banker or an advisor is to do a lot of things and be able to be on top of them and be able to provide perspective regardless of what the issue is. If it's a, you know, company like you at Devo or if it's, you know, it's an email company or whatever it may be, you know, having that ability to pivot and run I found very analogous to how I observe kind of, you know, Michael Chertoff and other leaders kind of leading the Department of Homeland Security.

Marc van Zadelhoff: That's an amazing experience. It's - those jobs always seem incredibly intense and maybe more through how we see them on - portrayed on TV shows or in books that we read. But it sounds like it was every bit a for you. And you were 25, 26 at the time? This is early.

Brian White: Yeah, it was in the - in my later 20s. But, exactly, no, I did things at, you know, stages in your life that you can't believe. You know, in, you know, Secret Service, you know, Coast Guard, you know, doing things that were just super cool. But, you know, when you did that and if you did it right, you had to be humbled by it. And you have to not take - you couldn't take it as if it was normal. You had to appreciate kind of what you were observing and kind of the responsibility that was bestowed upon you. What I often say is, you know, what makes the corporate world very, very different I think than the political world is that in the corporate world we want to see a rising tide lift all. You know, you want to see kind of your former employees become CEOs. You want to see your sales leaders become, you know, regional VPs and then VPs of sales. Whereas, in the political world, there really isn't an opportunity to see you kind of grow. You know? An, you know, it changes the mentality where it's more and more like a zero-sum game, where there's one position to do this. There isn't three chiefs of staffs, there's one. And, so, it, you know, changes kind of the competitive dialogue and the competitive nature of it to a different level. Which, you know, to me, again that similar to the rowing, was one of those most formative experiences that enables me to do what I do now.

Marc van Zadelhoff: Yeah. Yeah, yeah. Well, but like in rowing, right, there's only eight seats in that boat and that's kind of what you're saying. The boat's not going to get bigger. Whereas, in the corporate world, you have a chance to see companies grow and you can have several regional sales VPs, several - yeah. So, it's a very different, more expansive opportunity. But I have to imagine, on the other hand, it brings a little levity to the corporate world for you because, you know, generally, you're not dealing with life and death in the line of work that you and I are both in.

Brian White: No, for sure. I mean - you know, it's funny, I don't - I think about these moments as I did that and now I'm doing something different, but it's so very true that, you know, I'm not dealing with, you know, a potential terrorist attack against this country or a potential crisis with a hurricane. I mean, don't forget that what we did at Homeland Security was also during the times of Hurricane Katrina. And, so, there are a lot of stories about that as well where just, you know, the devastation that you saw and the consequential nature of it became pretty intense.

Marc van Zadelhoff: I think I have to ask you a completely off the track question. But, given - you know, given where this country is now, do you have any wise words on, whether you're on the left or the right, how much stress we all feel when we read about politics in this country and election? And is there anything you can say to kind of give us some perspective on just politics? Has it always been like this, and don't worry about it? Or how do you look at all this today?

Brian White: No, you know, I generally avoid commenting on it. But I will say two things. First, something that's a levity is one of my great mentors, Stewart Baker, he's, you know, well known in the cyber and legal communities, he said once that D.C. is a one-party town and if your party's not in power, get out of town. And, as I say, that's part of the reason I moved away 14 years ago and I haven't been back. But in terms of where we are, you know, listen, I'm just as saddened by everybody else, but I do still believe in the optimism of the U.S. And I still believe that that will ultimately prevail with a country where people want to be. So, I'm still, you know, the shining light on the Hill and everybody goes through certain times. But, you know, I do think more germane to this area in cyber, we are at a unique inflection term - point in terms of the threats to the nation. You know, the ability for various countries to really influence this country or steal information from this country is at an all-time high. And it will continue. And one of the things that's truly not appreciated is the fact that we are the only country - one of the only countries, forgive me, that does not leverage our intelligence services for economic gain, full stop. And, so, the re - many of our even friendly countries are leveraging their intelligence services to gain economic advantage. And that makes us very different. So, companies like you to the largest companies in the world are under a constant pressure to have their information taken. And that's good for our business, but I think it's sad for our country. And it also puts in perspective just how serious and ongoing this threat will be.

Marc van Zadelhoff: Yeah, I actually think - I forget exactly in what context President Obama made that especially clear I felt, maybe you saw it much earlier, that particular nuance in our cyber strategy which was using it for defense, maybe offense if needed, but not for economic gain. And I agree. I think somebody once explained to me very clearly that, you know, just pick China, they need to create enough jobs to make sure that that country stays at peace and the Communist Party stays in power and intellectual theft is going to be a means to - just to put I think a very concrete example on what you're implying in your statement, and that is a pressure that all of us are feeling defending this country, but, also, you know, I'm born in the Netherlands myself. Right? It's no different in Western Europe. All right, well, I feel like we should click along a little bit here. I know you I'm sure have a lot of stories from your time at Lockheed and Chertoff for what you did there. But I - if you're okay, I think maybe just to keep pace going here, you ended up leaving the D.C. orbit, if I can put it that way, Brian. And, you know, something caused you to, say, you know, kind of get into more of an operating role in the security space and in the analytics space. You joined RedOwl as COO in 2014. It seems to me that's a different - that's an inflection in your career, unless I'm seeing it differently.

Brian White: No. You know, what transpired was is that, you know, post-government service, I was fortunate to help Mike Chertoff and Chad Sweet and many others, Michael Hayden, establish the Chertoff Group, which is still, you know, doing quite well today. And, during that time, we were an investment bank and we were a consultancy, which we still are - which they still are. And I was fortunate that Mike was a great mentor and also knew my wife. My wife worked for him as well. And I said to him, "Hey, I think that there's a real opportunity for us to open an office in the West Coast." And, so, we moved out here, you know, with our suitcases, didn't know a soul. Honestly, we didn't know - we didn't have any friends, didn't have any family. But my wife wanted to live in the Bay Area. And, so, as you know, that's how it goes. And, so, we wound up moving out here in 2011. And I, you know, opened up - subleased some office on 101 California and started to build out a presence. And we were fortunate at that time to consult to companies like Palantir, like Andreessen Horowitz, like Mandiant and many others and, you know, really be at the impetus as these companies started to grow and do better. And, through that experience, both on the banking side and on the consulting side, it occurred to me that I wanted to be an operator and I wanted to dive in, particularly because I was living here. I don't know if we were not living in the San Francisco Bay Area I perhaps would still be at the Chertoff Group. But, you know, being here and being amongst this ecosystem, you know, I was thinking about a lot of different opportunities. But my very good and dear friend, Guy Filippelli, had started a company, RedOwl Analytics. And I will remember this moment. We were sitting there in Baltimore and I said, "Hey, I'm thinking about this." And he said, "Hey, you know, why don't you come work with me?" And I said, "Hey, you're becoming a good friend, I don't want to work for you. I want to work with you." And he said, "No, of course." And so, you know, he was, you know, phenomenal. That's why he's one of my closest friends in the world. And we did it as a team. And, you know, we took out where I led all go to market and finance, and he led all product and engineering. And, you know, we did it as a team. We took it, we raised money. And we ultimately exited it to Forcepoint. And it was a phenomenal experience. It was a stressful experience. But something that I'm very proud of.

Marc van Zadelhoff: That's awesome. And what did RedOwl do exactly? You know, we were - at that time, there was a category called UEBA. We were in the user behavioral analytics space. But, distinctly, we did two things. We solved insider trading, particularly by monitoring chat rooms and email, and then we also did insider threat by monitoring kind of email and bad swipes. You know, we were early in that category of trying to really assemble data. It's not too dissimilar from what you're trying to do with your Devo platform. But we pulled that data together, applied some, you know, very - you know, a lot of NLP and other behavioral analytics on top of it to really try to stack rank in order where there may be, you know, threats in the organization. And you got to Forcepoint. And was that typically the folks - people like you on a retention and they want you to stay for a while? Did you have a - did you ever think about a longer career there? Or you kind of knew you were going to kind of not be at the big security company for too long? Because it's quite a sizable firm.

Brian White: Yeah, no, I was - you know, we sold the firm in August of '17. And I was fortunate where, you know, Matt Moynahan said, "Hey, can you give me six months?" I wind up staying a little bit longer, you know, "Help me do the transition." And I did that. But there was really very little desire to stay much longer. And it did, though - you know, it was nice to be part of a large organization and, you know, they treated me great. They - we helped ensure that the team, you know, got integrated, that the customers were supported, that we continued to close out some deals. But, during that time, most importantly, I was able to really start to think about, you know, what do I want to do next, what should I do next, where should I go, And what occurred to me was I really loved, back to Lehman Brothers or back to what we did at the Chertoff Group, you know, I wanted to get back to the advisory side. And I thought about several different firms, but I ultimately decided to choose DBO Partners because DBO Partners was actually the investment bank that I had hired to sell RedOwl.

Marc van Zadelhoff: Okay. Perfect. Got it. And, so, before we get into kind of some of the deal making side that you spend your time on, but you went to DBO and it was acquired not too long afterwards, a couple years afterwards by Piper Sandler. And that's how you are where you are today, right?

Brian White: Yeah, DBO was started by three senior Morgan Stanley partners in 2012 - at 2012/2013 where, you know, one was - Gordon was the - you know, was the vice - was the vice chairman, Mark Bradley ran financial sponsors, Nick Osborne ran tech M&A. And they wanted to get back to really client services, boutique attention with their deep relationships that they had built. And I joined them to, you know, really stand up and build out a security practice in 2017/2018. And, you know, we reached an inflection point as a firm. And it was just last year that we were acquired where we realized, you know, we had built something special, but to really take it to the next level, it probably made more sense to see if there was an acquirer. And we were fortunate that, you know, we had some interest from others. But we ultimately thought that Piper Sandler would be the best acquirer for us. And it's been phenomenal, I tell you. You know, I have now been through two acquisitions, which I think makes me unique, too, as an M&A advisor and, you know, Piper Sandler has been world class in many ways. You know, they have built their bank interestingly via M&A. They've done about eight. They bought a chemicals bank, they bought a restructuring bank, they bought a financial services bank. And they bought us to really bolster their technology practice.

Marc van Zadelhoff: Amazing. Yeah, you guys do a great job. And, you know, I think many listeners will know that there's a very impressive DBO, now Piper Sandler, Conference the Monday of the RSA Show in San Francisco. And it's, I think, CEO, CFO and maybe Corp Dev at most, right, so you really limit the attendance, but the quality of that has been outstanding. And you're the MC and host. Been a great event.

Brian White: No, appreciate that. We're - that's probably the - what we are most proud of is it's become really the symbol of what we built in the community. And it - we thought that there was an opportunity at RSA to deliver content and to deliver perspectives, particularly to CEOs, on how to build and grow companies. And, so, you know, in the first year, we had Nikesh Arora as our opening keynote. In the second year, we had Chuck Robbins as our opening keynote. Very confident that we'll have another great keynote to open us up next April. And, you know, we mostly have CEOs. We do have investors and we do have some Corp Dev professionals. But we look for 3-400 attendees. And it's been something I'm very proud of. So, thank you, Marc.

Marc van Zadelhoff: All right, I want to get into the kind of day-to-day of your job. And, so, when we talk about being an investment banker, some listeners who are CEOs they'll be well versed, but I thought a good way to start in giving a sense of it is maybe walk through, you know, a couple of deals that you've worked on that kind of give a sense of the work that you do and the outcomes that you achieve with it.

Brian White: Yeah, I mean, at this time, we've done, you know, 25+ security deals. And, so, you know, it's hard to, you know, list them all. Nor will I list them all. But what I will tell you is a - of a few that I think are - you know, some I'm very proud of and in particular are very germane for where we are in this cycle. You know, the first is the merger of HUMAN and Perimeter X. Those are two bot management companies. They do much more than that, but, for purposes of efficiency, they are the leader in the bot management market. And what they realized is that there was real potential to put the companies together to see - solve, you know, more use cases, approach different customers, but, perhaps more importantly, to build a better long-term financial model. And we played a role in bringing that idea together to finally executing and making it happen. And, so, to us, that is a trend that we've seen increasingly of private-to-private M&A. And we've done the CyberGRX/ProcessUnity deal this year. We did IDX and ZeroFox. We've done that. And, candidly, Marc, it's probably something that is happening in 50-60% of my discussions today is about how can a private company acquire another private company because every company recognizes that they are in a race to be able to platform and they need scale.

Marc van Zadelhoff: And the complexity is the shareholders and cap tables in that regard, right? It's my view. I mean, we've done two acquisitions, but quite small. I mean - so, when you're ever getting into real revenue and real investors, that can get quite complex fast.

Brian White: Absolutely. There's generally three issues. The first issue is, "Is one CEO willing to not be CEO anymore?" Sometimes that's just that first litmus test. The second is, "Is there a cash component or is this just all equity?" Number three, "How are we thinking about the relative share of the equity and the valuation of the new entity?" And, you know, those - particularly numbers one, you know, you can generally figure out who's going to be the leader of the company if the idea makes sense. Number two and three become increasingly hard. But, if you do step back and you have a seasoned investor, they recognize that what we're truly negotiating for is a relative share of a piece of equity. And then we have to make a decision is that equity going to be worth more in three to five years than the current equity we're sitting on. And if they start looking at it in that - from that perspective, they generally say, "Hey, I think that that may make some real sense for us because of the opportunities that it opens up." Moreover, for founders, oftentimes it gives them two bites at the apple. It gives them a liquidity event at that exit, and then it gives them another liquidity event three to five years down the road. And, to me, that's often misunderstood is that, you know, it may be wise to give yourself some downside protection, take money off the table today, and then take another event in three to five years that often can be much larger and more lucrative if you made this interim step on the way.

Marc van Zadelhoff: Yeah, yeah. I agree. And for the valuation discussions, you know, without cash involved, it really is a ratio of the two companies. You have to figure out that ratio, like you said. You know, you could say one's worth 10 billion and one's worth - then the other one's worth two. And, you know, it's a 2:12 ratio. Right? Once cash is involved, then you really have to get concrete on the idea.

Brian White: Precisely, precisely. You still need to be close enough, but you have more flexibility on the equity side. You know, oftentimes, Marc, a transaction like that is easier if there is a majority owner. Other alternative is it's often an opportunity to bring new money into the cap table or potentially cash out from earlier investors, because oftentimes, particularly in our ecosystem, investors are getting long in the tooth. What that means for the listeners here is, you know, they may have invested in an asset seven, eight, nine years ago and they're reaching the end of their fund cycle or they already passed their end of their fund cycle into some of the continuation vehicles where they, you know, increasingly need to return capital. And, so, if there's an opportunity for them to sell down an early stake, they may seek to do that in a transaction such as a private-to-private merger.

Marc van Zadelhoff: So, I don't want to cut you off from your deal examples, but I - or I can also kind of get into more generally, I'm curious, when you get involved, you mentioned some of these, they're your idea and some of them you're facilitating other people's ideas. So, when do you generally get involved in these?

Brian White: You know, it depends. But, to be specific, what we try to do is build relationships with boards, investors and CEOs and start to deliver, you know, value early and often so when a transaction starts to happen, you know, people think about us. And that does often sound probably very consistent with any of my peers. And we have great colleagues and contemporaries in the investment banking world. But, to me, you know, when you're just starting a company is probably a little bit too early, but, you know, as you start to really see product and market vet, I think increasingly having a meeting or, you know, seeing a couple of different advisers on a quarterly basis is a good use of time if you're a CEO because it gives you perspectives on the market, whether that's what your competitors are doing, what the larger companies are doing, what the fundraising environment is. And, to me, those are data points that enable you to understand the fabric of your ecosystem and help you make decisions, not that if you see a banker in, you know, Q4 of 2023, does that mean you're going to sell in 2024. You may not ever sell the company. Or you may be two years away. But, you know, it's worth an hour of your time to just understand the market. And, so, you know, that's how I start to think about it is - and what I also think is really the nice thing about our ecosystem is oftentimes we seek to, you know, say, "Hey, you should talk to so and so." And one of the things I've increasingly done lately is, you know, New York City has quite a few cyber CEOs and they really don't know each other very well, and so we've tried to bring them together because that peer-to-peer network of a CEO, that's a unique experience where I think it's often helpful to speak to a peer rather than just always speak to your board to get some perspective.

Marc van Zadelhoff: Being a CEO, as I say, is a lonely job. So, those CEO-to-CEO chats can be some of the most frank ones that you get. So, any facilitation, and you've been very good at that, is super helpful. But I agree, we - I think the meetings - you know, we meet with you and, as you said, some of your peers out there and it's a great moment to lift your head up because as a CEO you're so down in, you know, this customer or this operational issue internally, and those meetings are a great chance to lift your head up and quite often get an insight of, "Oh, that's happening over there." And, curious, maybe just to - we don't have to belabor because I know books have been written about it, but process-wise, a process that you get involved with. So, you get involved with the CEO, an idea jumps on the table, you have a target in mind. What's the - you know, what's the process, what are the key steps really quickly there. And when do you - when is the most likely moment these things collapse, or when do you know this is going to happen?

Brian White: You know, I think it's a process in banking has a lot of different meetings. What I often say is that if you are a venture company and you call us up or our colleagues up to run a process, that will be valued destructive. What you need to be able to do is to be bespoke and targeted with who are your natural acquirers and why, and deliver a very tailored message to each of them about the distinction that you provide in the ecosystem and the differentiation that you will provide to that potential acquirer. And, so, it is a lengthy process by definition in just preparing. If you are of the situation where - you know, there's a few different variables here. And, you know, Marc, this may even be to what we said at the outset, worth another session at the appropriate time. But, you know, you generally see this in, you know, a few different ways. First, you're a large company and/or you're a profitable company where - you know, and I would say large as, you know, at least 30 million, but, realistically, it's 70 million or above where you know that you have intrinsic value in that company, the question is, "Who is the right buyer and how do you maximize that value at that time?" And, so, with those companies, you can run a proper process to go out and determine, "Hey, who wants to buy me today at what value," and really get a sense of what the market believes you're worth. There are, in our ecosystem, many other companies that are much smaller than that. And, even if they're larger than that, they will receive an inbound offer or at least inbound interest and where people are asking for your capital table, they're - have done a product demo, they have asked for the financials of the business. Where you're getting the sense that this is more than a partnership conversation, this could be an M&A discussion. And, in those situations, oftentimes you want to very cautiously, but prudently, reach out to a few other potential acquirers to get a sense if they would also be interested because once somebody does decide to move and give you an offer, if that interest does lead to an offer, you do also want to determine if there may be somebody else. And then the third situation would be, "Hey, listen, we just have reached the point where if we raise again we'll have to raise and recap the company. We'll have to, you know, really raise a flat round or, you know, candidly we built something special, but we just know that getting traction and really building repeatable motion is hard." And, so, it's better is part of a larger entity. And, in particular, for those companies, I think it's important to have a sense of where you belong because if you've already built the relationships as the CEO with those companies, if you have a couple of joint customers, it makes it a lot easier and it also preserves a really good outcome. The worst thing that - the worst call we get is when somebody says, as I said at the outset, then to conclude this long-winded explanation, is, "Hey, you know, we spoke to - we had a board meeting today. We've decided that it's appropriate to sell the company. We need to hire an investment banker." And let - as if we can all of a sudden just sell the company. You know? What you need to do is if you haven't done that spade work early and often, you're not going to sell at a value that makes you or the board excited. And, so, that's why it is important to start taking meetings and understanding the ecosystem, you know, because that's how - that's one of the jobs I think of an effective CEO is to understand, "Hey, where may I go if I don't stay independent?"

Marc van Zadelhoff: It makes a ton of sense. And, obviously, it's part of my job, which we'll get into here, but it's you constantly have to think about those outcomes. But, on the other hand, the old advice is best, right, which is you never really sell a company, you've got to just keep running it and things will come your way if you execute and grow the business.

Brian White: I think that that's generally true. I think that that is good advice that companies are bought not sold. But, in order to be bought, you have to let people know that you're open to being bought. You know? And, you know, it's one of those things where, you know, I'm not going to be able to find a friend if I sit in my house with the lights off reading books all day. You know, I need to go out, you know, to the social events and I need to start to say, "Hey, I'd like to have some friends." And, so, it is also where - that's where, you know, I think that there is a lot of gray space. You know, oftentimes a lot of CEOs get that advice, "Hey, we're building a company, don't worry about your ecosystem." And what I often say to people is, "No, like that's part of your job. Hey, what are my - what are the large public companies doing in my space? What are what the - what are my competitors doing, what are the private equity firms, what are the other venture investors doing?" Because, you know, for you ultimately to create liquidity for yourself, your employees and your investors, you have to put yourself in position for somebody to come buy you. And that doesn't just happen by, you know, executing, executing, executing, the lights off, you know, reading a book at home. You've got to get out.

Marc van Zadelhoff: I appreciate you're using the book and making friends metaphor because usually the dating and marriage metaphor is used in your line of business and it often leads to awkward metaphors. Tell us about, you know - this is a podcast about CEOs in the cybersecurity space. You know, what's the best kind of CEO to work with? Is it a first-time CEO? Is it an experienced one? Is it, you know, a reclusive one or an extrovert? What's the right guy to work with?

Brian White: You know, I - everybody has their strengths and weaknesses. Somebody that's engaged with us; that recognizes that we are not miracle workers; that, you know, we do our job, we do it as a team, we play off of each other. You know? But the other - what I often say is just like any negotiation, you know, when you're selling software, and this is what I appreciate about my being an operator, is, you know, when you are engaging in a large deal, you know, you may have your rep get it going, you may then bring up the VP of sales and then they offer, "Hey, the CEO wants to come to get a dinner and to take you out." And, you know, that's being quick. And there's a lot of nuance there. But that's very analogous to what you do on the investment banking side where you may keep the CEO-to-CEO relationship, you know, the banker may go Corp Dev-to-Corp Dev, the board may be able to get engaged, and you have to think about all the various leverage points in a deal to really drive and maximize the outcome. And that's the fun part of it is all the strategy and the negotiation because the real way to maximize that value is to put the company in position to have a multitude of offers. When we have seen really big outcomes, you know, two of the deals that we've done we have been able to negotiate the deals up, you know, 50 to - one 50% and one 180%, like meaningful movements in real price have been where we have had competitive bids. And once you get a competitive situation - and, so, oftentimes I say to people the way that you start to measure a banker, particularly in a larger process, is how many bids can they drive in because, once they have multiple bids, a few things are happening. The buyers want to buy the company. So, they have deal energy. And then you now gain the momentum in the transaction where now they don't - once you know - you know, it's often - you know, there's a lot of misconceptions still I think about what we do and how we work. But, for a large company, whether it's private equity owned or, you know, public owned, for them to actually make the decision to make an acquisition takes an enormous amount of work. It's not saying that, "Oh, we're going to buy this." It is a long, laborious process. It's real financial work to understand what the integration model looks like, what the sales looks like. And, so, once they've made that decision, "I need this company, I am willing to spend money, I have told you how much it is," that's when you can start to say, "Okay, we've reeled them in and now we need to start to determine how we can maximize these terms." And, oftentimes, Marc, it's not just the price, but it's all the underlying terms of the deal that become just as important in the long term about what makes the most sense and what's the right transaction.

Marc van Zadelhoff: I can relate to that when I was building up IBM Security, I think we acquired about 10 or 12 companies. And taking those to our deal committee was a huge - and rightfully so, a huge hurdle of explaining it and what it meant, the Synergy case and all those things that you mentioned. So, that is not to be underestimated and often not understood by the selling companies, the smaller selling companies how complex that is. Super. All right. Well, Brian, I think we're - we could keep going and we could do some sub-podcasts on different topics. But maybe just a couple sentences to close us out here on M&A trends in cybersecurity. You know, in general, are you an optimist on the second half that we're, you know, already entered into here and next year both in terms of the economy, you know, growth picking back up on the top line? But then also do you think more deals will be happening and do you see any particular deals, big deals or smaller deals, as the more likely scenario?

Brian White: Yeah, a few thoughts. You know, first, I think that the M&A market in cyber world pick up. Latter half of '23, '24, '25, we're going to see, you know, more transactions, the public markets will also open up and we'll see a few more cyber public companies which are well needed because remember, Marc, as you well know, many of the public cyber companies have now gone private and are owned by private equity firms. And, so, generally bullish on where we are in the cycle. We're coming through. It has been a softer landing than expected. And, so, we have seen a big uptick in activity, particularly over the summer. Like people have come back with a vigor and people are ready to do deals. They're still sorting out what deals to do and to spend the money, but people are definitely ready to now engage and transact. What I - the second thing I would say is - and, in particular, I think it's germane given what Palo Alto reported about a week ago of kind of a crowd strike reported this week is that the platform's winning and the platform is where security is. And that is full stop what has happened to our ecosystem. And I think that that trend will continue. And the other large companies have recognized that. And, so, they are looking to build up and bulk up capabilities so they have a full end-to-end platform. That I think is news for where we are in this cycle because it will lead to more M&A. But I do think it's also a harbinger that in security it will still remain primarily a sector where people buy innovation and early product market fit rather than buy later and later stage companies. And, so, that is, you know, I think one - what we will see in the next cycle. And I also think that's why this is such a great time to create companies, not just because of where we are with, you know, equity values and, you know, people have been, you know, laid off in technology as we went through the latter half of last year and this year, but also just that over time I think these large platforms will continue to be very robust acquirers.

Marc van Zadelhoff: I agree. Nothing to add there. I think it's going to be an interesting next 18 months in this marketplace. And I always think it's - you know, when we - when I really got active in this market, the big players were Symantic, McAfee, Trend Micro. You know, we built IBM Security. And, nowadays, it's a whole new set of names on the platform side. And it's been remarkable to see that over the last 15 years completely]. So, I think that trend will continue to drive the next - through the next 18 months that you're referring to. Brian, well, I think that's a good note to close it out on. Thank you so much for spending the time, giving your insights here. And maybe we pick it up on another chat later. But I appreciate all the time you put into this.

Brian White: No, it's been fun. First, thanks for doing this. This is much needed for our ecosystem. And, you know, we could do this for a long time. There's so much nuance in M&A and I love talking about the markets and where I see and let alone kind of the other entrance that will come in over time. But the net is, you know, glad you're doing. This is a great, great podcast and something that's much needed. So, appreciate your time and just the invite to join you today.

Marc van Zadelhoff: Awesome, man. Well - and thanks to our audience for listening. Be sure to join us for the next issue of "Cyber CEOs Decoded." Brian White, thank you so much. And we'll talk to you all later. Take care. [ Music ]