Guest Blog by Michael Wellman: Virgil Security’s $4 Million Series A Round Is About More Than Just Fundraising

Michael Wellman and Dmitry Dain, founders of Virgil Security

Dmitry Dain and Michael W. Wellman, founders of Virgil Security

Last month, DCInno’s Eric Hal Schwartz, in his DC’s Cybersecurity Startup Scene Is Hot. Can It Get Hotter? article gave Virgil Security (and Mach37) the following shout out:

If venture investors are on fire for cybersecurity opportunities, a group of D.C.-based accelerators are cropping up to supply the fuel. Mach37 graduates around half a dozen startups from its program twice a year, with notable successes like Virgil Security, which partnered with Twilio, one of the fastest-growing cloud computing companies around, in April.

Last week, Virgil Security closed a $4 million Series A investment. I’ve long contended that funding news isn’t really news, but what makes it interesting this time is that we’re a Mach37 company – the first Mach37 company to close a Series A round. And that is news! Let me explain why…

Our lead investor was KEC Ventures out of NYC. Oher institutional investors included Charge Ventures in NYC, Bloomberg Beta out of San Francisco, Sparkland Capital from both Silicon Valley and China, plus NextGen Venture Partners which, while originally DC-based, now has a national footprint. Notable individual investors included Ray Rothrock and Matt Grimm. Ray Rothrock is practically the godfather of West Coast cybersecurity investing; he led the Series A and Series B investments in PGP Corporation back in the day, and, more recently, led the Series A investments in CloudFlare. Matt Grimm was, until recently, a partner at the San Francisco-based Mithril Capital Management.

Our ability to draw national and international funding to a Northern Virginia startup further validates Virginia’s investment-driven model for economic development. The combined vision of former CIT leader Pete Jobse, Delegate Tag Greason, and the Northern Virginia Technology Council (NVTC), plus the sustained support offered by Governor Terry McAuliffe, the Virginia’s Secretary of Technology Karen Jackson, and the Center for Innovative Technology (CIT) brought Mach37 into existence. Without the opportunity that Mach37 provided us to distill our underlying business case, Virgil Security would potentially simply not exist today. Because of all of their efforts, the $50,000 that Mach37 invested in Virgil in the fall of 2014 just drew 80 times that in private investment – with most of it coming from outside the DC area but with much of it to be spent in the DC area!

Our ability to draw this investment into the greater DC area also helps demonstrate that Virginia’s recent focus on cybersecurity is aligned with the future we need to create. And we’re trying hard to do our part.

Our mission at Virgil Security is to #SecureTheFuture. For Virgil, that means ensuring that the future is cryptographically secure, but, for all of us, that means ensuring that the future is economically secure. To help further both goals, Virgil Security is working with the University of Virginia’s College at Wise to create a curriculum which will better enable Virginia graduates to find and fill the tens of thousands of unfilled cybersecurity jobs in Virginia, the hundreds of thousands in the United States, and the million plus around the world.

So, while funding news isn’t normally news, I think this particular bit of funding news represents something bigger. And in our view, it’s a story worth sharing.

– Michael W. Wellman

Virgil Security Raises a $4 Million Series A


Virgil Security Co-founders Michael Wellman (left) and Dmitri Dain (right) Ring the Mach37 Bell to Celebrate Reaching Escape Velocity; Rick Gordon Joins In the Celebration


On October 7th, Virgil Security closed a $4 million Series A investment, led by KEC Ventures. KEC is a venture firm founded by Jeff Citron, who also founded Island ECN, Datek Online and Vonage.  For those of you who are close to Mach37, you know I have been promising for many months that we have several companies ready for Series A investment. Virgil was one of them.

As I thought about using this blog to crow about our investment strategy (we actually hunted for a company that offers easy-to-implement encryption infrastructure) or in some way hype-up just how smart we are at Mach37, a conversation I had last week caused me to think better of it. Virgil’s CEO Michael Wellman offered the key insight. As I was verbally high-fiving Michael, he took a characteristically humble look at the company’s journey so far and remarked:

“You know Rick, it used to be that if you worked hard, had talent, OR got lucky, you could make it to the NFL (National Football League).  These days, to make it you need to work hard, have talent AND get lucky to even have a chance.”

And, so it is with technology start-ups.  The hidden truth is that entrepreneurs can have talent, make every right decision, and work their butts off, but if serendipity does not smile the company will fail.

In the case of Virgil, I can point to a handful of inflection points that relied heavily on just being in the right place at the right time.  I can say the same for Invincea and Lookingglass, two companies I was intimately involved with during their early struggles that have since achieved similar inflection points.  However, the truth is that all of these companies still have additional milestones to achieve before any of us can declare victory.

So, instead of trying to convince you that the Mach37 team is smarter than we really are, I’ll just say that we feel really fortunate to have had the opportunity to invest early in Virgil. It is a company that has the world class talent and drive required to be successful AND was able to create the necessary luck along the way to close its Series A.

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