Building a Venture Scale Cyber Security Startup in the Age of AI: Alon Jackson, CEO of Astrix Security (Part 4)

Sramana Mitra: Now, you talked about the commercial terms. What kinds of terms would you advise people, based on your experience and your learning? What terms do you advise for channel partnerships? What are the secrets of a successful channel partnership?

Alon Jackson: I don’t remember specific numbers, but I would say this—it goes back to what I said before. First of all, hire someone that you trust and who knows the industry, and someone the partners trust as well. We hired an amazing director who led the program and knew the industry.

Second, be very flexible—especially in the first year, two years, even three years. Be flexible in giving relatively large margins to the partner. I don’t remember the exact number—whether it’s 10 points or 15 points—it doesn’t matter. What matters is the long-term trajectory.

If you’re able to form the right bonds between the reps, SEs, and technical folks—through community events and a real go-to-market motion where success is mutual—that’s instrumental. That’s a guiding light.

If you lose a few thousand dollars of ARR here and there, it’s just a short-term gain. The actual terms, whether it’s a few points more or less, matter less than being a good partner and showing that partnering with you is the best thing for their success.

Sramana Mitra: What you’re talking about is very important for cybersecurity startups because it’s become almost impossible to go to market at scale without channel partners. We’re also seeing another trend—startups doing founder-led sales, validating the product, and then going directly to an exit without building a channel. That’s another way people address the difficulty in getting meetings.

Alon Jackson: In general, cybersecurity—especially in the beginning—is not a very efficient business. There’s a lot of go-to-market effort involved, including channel partners, as part of the cost of doing business.

Breaking through the noise and getting in front of the right people at the right time is very costly. When you see big rounds in cybersecurity, that’s part of it. The good thing is, if you’re able to build a product that enables the business—not blocking users from becoming more productive, but empowers security managers to help the organization grow securely and stay compliant—then that’s extremely valuable for large enterprises.

Sramana Mitra: When you were ready to raise your Series A—after the $15 million seed—was the channel already in place?

Alon Jackson: No.

Sramana Mitra: So, you did all founder-led sales with seed, and then built the channel after Series A?

Alon Jackson: Exactly.

Sramana Mitra: How many customers did you acquire in a founder-led sales mode when you raised Series A?

Alon Jackson: I don’t remember exactly—between 10 and 20, I guess.

Sramana Mitra: That’s great. How much did you raise in Series A?

Alon Jackson: We raised an additional $25 million.

Sramana Mitra: And when was that?

Alon Jackson: About two years ago—around 18 months after the seed round.

Sramana Mitra: So mid-2023 is when you raised Series A for $25 million?

Alon Jackson: Yes.

Sramana Mitra: And that’s what you used to build the channel?

Alon Jackson: Yes. Most of that $25 million went into building a go-to-market engine from scratch, as well as expanding R&D to handle scale, become enterprise-ready, support broader use cases, and ultimately widen our product moat.

The most important part in the race to stay a market leader is not just keeping the gap from your competitors but increasing it. That requires investment in both go-to-market and R&D and continuous innovation to strengthen your product advantage.

This segment is part 4 in the series : Building a Venture Scale Cyber Security Startup in the Age of AI: Alon Jackson, CEO of Astrix Security
1 2 3 4 5