How do you identify and invest in the next generation of category-defining companies in cybersecurity? In this episode of Driving Alpha, Richard Seewald, founder and managing partner of Evolution Equity Partners, shares his insights, shaped by over three decades of investment, operational, and entrepreneurial experience.
Richard founded Evolution in 2008 and leads investments in cybersecurity, enterprise software and data analytics and brings over three decades of investment, operational and entrepreneurial experience to his role. Richard is a member of the firm’s investment committee. Under his leadership, Evolution has become a premier venture capital firm raising over $ 2 Billion of capital to invest in category-defining software companies including SecurityScorecard, Quantexa, Pentera, Carbon Black, Talon, Arctic Wolf, Aqua Security, AVG Technologies, OpenDNS and ProtectAI, in organizations where Richard serves as a member of the boards of directors. Prior to establishing Evolution, Richard was a Partner at Alpha Associates, a venture capital and private equity firm where he led a multibillion dollar investment platform with investments in software, media and infrastructure companies including as founding investor in NejTV and Sixty-K.
This conversation explores how AI-driven automation is revolutionizing cybersecurity, spotlighting leaders like Torque and Protect AI. It also delves into the extraordinary innovation emerging from Israel’s cybersecurity ecosystem and the strategic reasons behind Evolution’s continued focus on the region, even amid geopolitical complexities.
The discussion highlights the qualities that distinguish transformative founders, strategies for identifying high-impact investment opportunities, and perspectives on staying ahead in the rapidly evolving cybersecurity landscape.
Whether it’s about backing transformative ideas or understanding the future of this critical industry, this episode offers rich insights and inspiration.
TRANSCRIPTION:
Steve Brotman: Hi, I’m Steve Brotman, managing partner and founder of Alpha Partners. Welcome to Driving Alpha, the podcast that brings you insights from the world’s top venture capitalists and investors. Here, we explore how they generate alpha in their portfolios and funds while delivering value across the board.
Today, we’re thrilled to have Richard Seewald, founder and managing partner of Evolution Equity Partners. Evolution is a leading venture capital firm specializing in cybersecurity investments. Richard’s journey in the tech world includes his early investment in AVG Technologies, where he played a pivotal role in growing the company to nearly $400 million in revenue over a decade. With over 30 years of experience, Richard has raised more than $2 billion in capital, and Evolution is now the world’s largest cybersecurity-focused fund. The firm has invested in numerous category-defining software companies like SecurityScorecard and Carbon Black.
Richard’s educational background is equally impressive—he holds an MBA from the Chicago Booth School of Business and a JD from New York Law School. Today, we’ll dive into his unique approach to cybersecurity investing, combining deep expertise with a strategic vision for the future.
So, welcome, Richard! How are you doing?
Richard Seewald: Hey, Steve, thank you very much for that tremendous introduction. I’m a big fan of the Driving Alphapodcast. You do an amazing job engaging with investors and venture capitalists on the nuances and strategies around investing in software businesses and disruptive categories. I also admire Alpha Partners’ co-investment model, which enables you to partner with leading VCs and bring best-of-breed companies into your portfolio. It’s really an honor to be here, and I look forward to this discussion.
Steve Brotman: Super! Why don’t we start with a little bit of your backstory? I think a lot of folks listening—whether they’re entrepreneurs or investors—are curious about how you got into venture capital.
Richard Seewald: Sure. About 25 years ago, I invested in a company called AVG Technologies. This was right after the dot-com bubble burst and the 9/11 attacks, so it was a difficult time to invest in software businesses. My group of investors acquired AVG from its founder, and over the next decade, we built it into a multi-hundred-million-dollar business. We made over a dozen acquisitions, scaled the company’s product offerings, and eventually took AVG public on the New York Stock Exchange in 2012.
Through that experience, I saw a growing opportunity in the cybersecurity space. After we exited AVG, I co-founded Evolution Equity Partners with Dennis Smith, J.R. Smith, and Carol O’Blok. We raised our first fund to focus specifically on cybersecurity, and earlier this year, we announced our fourth fund, which is $1.1 billion.
Steve Brotman: That’s an impressive track record. Cybersecurity obviously plays a huge role in your strategy. Are there particular frameworks or heuristics you use to decide whether a company is worth backing?
Richard Seewald: Absolutely. We invest across early, early growth, and later-stage categories in cybersecurity and adjacent areas, building a diversified portfolio. For early-stage companies, we focus heavily on the people. We look for founders with persistence, resilience, and deep knowledge—those intangible qualities that set them apart. For example, we led the seed round in SecurityScorecard and continued to invest as they scaled.
For growth-stage companies, we apply more quantitative frameworks. Metrics like ARR growth, scalability, and ROI are crucial, especially when assessing whether a company generating $100 million in ARR can scale to $300 million or more. The key is applying the right assessment model to each stage, and I think Evolution has built an excellent track record in doing that for cybersecurity companies.
Steve Brotman: Got it—people at the early stage, then more data-driven approaches at growth stages. What do you look for in founders?
Richard Seewald: When you meet an entrepreneur for the first time, you’re evaluating their experience, motivations, and drive. You want someone with a killer instinct—someone who’s building not just a product, but a category-leading business. We’re not looking for single-product companies with limited market potential; we’re looking for entrepreneurs who can execute on a vision to dominate a large addressable market.
Steve Brotman: Let’s shift gears a bit. With everything happening in Israel recently—a region known for cybersecurity innovation—how has that affected your approach?
Richard Seewald: Israel has been a key focus for us for many years. It’s one of the most attractive ecosystems for cybersecurity entrepreneurship. Even during recent geopolitical crises, the innovation coming out of Israel hasn’t slowed down. In fact, many investors are doubling down on Israeli startups.
We’ve seen major M&A activity, strong valuations, and consistent exits at healthy multiples, despite the challenges. We’re very positive on the opportunities in Israel and continue to back some of the best cybersecurity companies there.
Steve Brotman: AI is another big topic right now. How is it impacting cybersecurity, and how are your portfolio companies adapting?
Richard Seewald: AI has been a game-changer. We’ve invested in companies using machine learning for over a decade, starting with detection and response use cases. Today, with large language models and generative AI, attackers are more sophisticated, deploying faster and cheaper attacks.
On the defense side, companies like Protect AI, Torque, and Halcyon are leveraging AI to enhance detection, response, and automation. Protect AI, for instance, helps secure the machine learning lifecycle, while Torque focuses on hyper-automation for security operations. AI is becoming a necessity in cybersecurity, and we’re investing heavily in this space.
Steve Brotman: What trends are you seeing in cybersecurity over the next few years? Are there emerging areas or innovations catching your attention?
Richard Seewald: One of the most interesting trends is the rise of agentic workflows and the increasing amount of non-human activity on digital platforms. These agents, often powered by AI and machine learning, are reshaping how organizations operate. The opportunity to build cybersecurity tools that defend against these advanced threats is huge, particularly in areas like identity protection and fraud prevention.
Another major trend is automation. Our philosophy is simple: if it can be automated, it will be automated. Over the next three to four years, automation will become deeply integrated into every large organization’s security operations. This will free up human resources for higher-level tasks and address the global shortage of skilled cybersecurity professionals.
For example, companies like Torque are driving hyper-automation in security operations, transforming how organizations handle tier-one and tier-two tasks. At the same time, we’re seeing automation positively impact gross margins for later-stage companies, making them more attractive as they prepare to go public.
Steve Brotman: Are these trends being driven by existing companies adapting to new challenges, or are fresh startups leading the charge?
Richard Seewald: It’s a mix of both. Established companies are adding automation and AI to their existing capabilities, which improves their competitive edge and operational efficiency. At the same time, entirely new companies are emerging to address these shifts, particularly in fraud detection and identity protection.
For example, companies like Halcyon are tackling ransomware threats in innovative ways. They’re built by experienced teams and are laser-focused on solving pressing problems with next-generation technology. These new entrants are creating tremendous private market opportunities.
Steve Brotman: How are cybersecurity budgets responding to all this innovation? Are companies allocating more funds, or is the growth coming from reallocating existing resources?
Richard Seewald: Cybersecurity budgets have remained relatively stable over the last couple of years, with modest growth of 2-3%. However, the shift toward next-generation platforms and automation is where we’re seeing the most significant opportunities.
Legacy platforms are growing more slowly, but next-gen companies are seeing explosive growth—sometimes 30%, 100%, or even 300% year-over-year. This shift is creating a thriving private market for innovative cybersecurity solutions.
Steve Brotman: Do you think this growth is partly due to automation reducing labor costs in cybersecurity?
Richard Seewald: Absolutely. Automation is playing a huge role in reducing the need for manual intervention in cybersecurity workflows. However, the difference with cybersecurity is that there’s still a global shortage of skilled professionals. Automation is helping shift human resources to higher-value tasks, which is critical given the workforce challenges we face.
In other sectors, automation may displace workers, but in cybersecurity, it’s about making the existing workforce more effective and filling gaps in critical areas like detection and response.
Steve Brotman: Shifting gears a bit, you’ve been in the industry for over 30 years. If you could go back in time, what advice would you give to your younger self?
Richard Seewald: I’d tell myself to trust my instincts and judgment more. You spend years developing the ability to assess people, markets, and opportunities—don’t second-guess that.
In venture capital, the ability to evaluate people is often the secret sauce. Entrepreneurs, teams, and new hires can make or break a company. Building that pattern recognition over time is invaluable, and the best investors refine it by seeing as many opportunities and founders as possible.
Steve Brotman: That’s great advice. I imagine it’s just as relevant for entrepreneurs.
Richard Seewald: Absolutely. Entrepreneurs need to trust their judgment, too—whether it’s choosing partners, hiring key team members, or navigating uncharted waters.
For us at Evolution, evaluating entrepreneurs is a critical part of our process. We’ve spent decades honing this skill, and it’s a key reason why we’ve been successful in identifying and backing category-leading businesses.
Steve Brotman: Do you have any specific tools or processes you use to evaluate founders?
Richard Seewald: We use both internal and external resources to evaluate founders and teams. For example, we rely on professional assessments during our due diligence process to quantify some of the intangible qualities we observe in entrepreneurs.
This evaluation doesn’t stop at the initial investment. It continues as part of our centers of excellence in cybersecurity growth, which is essentially a playbook we’ve developed over the years. We engage with external professionals to ensure we’re making the best possible decisions when it comes to hiring and team building.
Steve Brotman: One of the things I love about hosting this podcast is getting to talk to people like you and learn from your journey. Thank you so much for joining me, Richard, and congrats again on your $1.1 billion fund.
Richard Seewald: Thank you, Steve. It’s been a pleasure. I look forward to continuing to watch Driving Alpha and hopefully collaborating on investments in the future.
Steve Brotman: Thanks again, Richard. And to our listeners, thank you for tuning in to this episode of Driving Alpha. Until next time!