Why Startup Cyber Funding Boom Creates Execution Risks

Rain Capital's Lefort on Overcapitalization and Cybersecurity's Barbell Effect Michael Novinson (MichaelNovinson) • March 28, 2026

Cybersecurity funding hit all-time highs in 2025, rivaling the 2021 boom, said Sidra Ahmed Lefort, venture partner at Rain Capital. A "barbell effect" has taken hold, with capital concentrating at the earliest and latest stages while squeezing the Series B and C middle, which is creating serious execution risk for startups.

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Overcapitalization blunts the urgency that drives good decision-making. When startups have more cash than they need, the pressure to prioritize fades.

"Cushions are meant to be comfortable; they're not meant to be making you competitive," Lefort said. "These companies now have to figure out how to ruthlessly prioritize, which is very hard to do with the amount of capital that they have."

In this video interview with Information ...