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IronNet Ceases Operations, Terminates All Remaining Staffers

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Network Detection & Response
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Next-Generation Technologies & Secure Development
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End Comes Just 25 Months After Threat Detection Firm Went Public At $1.2B Valuation

Michael Novinson (MichaelNovinson) •
September 29, 2023    

IronNet Ceases Operations, Terminates All Remaining Staffers

The network detection and response company founded by retired four-star Gen. Keith Alexander and once valued at $1.2 billion has officially turned off the lights.

See Also: Live Webinar | Cyber Resilience: Recovering from a Ransomware Attack

Washington D.C.-area IronNet Friday ceased all business activities and operations and terminated its remaining employees after considering strategic alternatives and finding additional sources of liquidity unavailable. IronNet’s board directed the company to file a voluntary petition for bankruptcy protection as expeditiously as possible.

“The company does not have the ability to satisfy its debts and related obligations, [and] the company will no longer have the capability to prepare financial statements and other disclosures,” President and Chief Financial Officer Cameron Pforr wrote in a regulatory filing Friday. “The related actual and potential effects on the company and its subsidiaries will be material and adverse.”

IronNet doesn’t anticipate it’ll be able to pursue reorganization under Chapter 11 of the bankruptcy code, in which case the company will instead need to file for liquidation under Chapter 7. The company expects that no distributions would be available for stockholders in Chapter 7, and that distributions to stakeholders in the event of liquidation would be significantly smaller than those via reorganization.

Financial Lifelines Fail to Keep IronNet Afloat

The move to shut down completely comes nearly four weeks after the board authorized IronNet to furlough nearly all its workers and substantially curtail business operations. At that time, however, IronNet retained several workers to ensure remaining customers didn’t experience service interruption. At that time, C5 Capital said it provided IronNet’s board with a term sheet to fund more restructuring (see: IronNet Furloughs Almost All Employees, Curtails Operations).

IronNet is the second publicly traded cybersecurity company to end operations this year, following in the footsteps of Washington D.C.-area email security and threat detection vendor Cyren, which shut down in February 2023 after failing to sell assets or raise more capital. Neither IronNet nor C5 Capital immediately responded to Information Security Media Group requests for additional comment.

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The Washington D.C.-based venture capital firm said it had given IronNet $15.2 million of financing since January as the company’s sole funder, and in July agreed to take IronNet private in exchange for Alexander, 71, giving up day-to-day management of the company he founded nine years ago. Former Houghton Mifflin Harcourt CEO Linda Zecher, 70, has served as IronNet’s chief executive since July 2023 (see: IronNet CEO Gen. Keith Alexander Out Amid Take-Private Deal).

The remaining members of IronNet’s executive team at the time of closure are: Pforr, 58, who joined IronNet from Fidelis Cybersecurity in September 2022 as CFO and added the president role in July; Fernando Maymi, who joined IronNet in April 2019 and has served as its CISO since February 2022; and John O’Hara, who joined in 2021 as senior vice president of corporate development and partnerships.


“The company currently does not have the ability to satisfy its debts.”


– Cameron Pforr, president and CFO, IronNet

IronNet’s board is stacked with ex-military officials including Alexander – who chairs the board – as well as ex-NSA Director Mike McConnell, ex-Army Vice Chief of Staff Jack Keane, and ex-Director of Naval Intelligence Jan Tighe. Members of the board with civilian backgrounds include Higgins, Kleiner Perkins Managing Partner Ted Schlein and ForgePoint Capital co-founder and Managing Partner Don Dixon.

From Unicorn to No More

IronNet’s high point came in August 2021, when the firm went public through a merger with a special purpose acquisition corporation at a $1.2 billion valuation. But signs of trouble started to emerge in June 2022, with the company going through multiple rounds of layoffs, executive removals and warnings that the pace of new business was insufficient to sustain operations in the back half of last year.

The company drastically reduced the size of its workforce since early 2022, going from 316 employees as of Jan. 31, 2022, to just 104 employees a year later. The most significant job cuts took place between September and November 2022, when IronNet axed 11 employees – or 44% of its workforce – to achieve approximately $20 million in annualized cost savings, according to SEC filings.

These cost-cutting efforts paid dividends, and IronNet’s net loss for the fiscal year ended Jan. 31, 2023, plummeted to $111 million, a 54.3% improvement over its $242.6 million net loss in the fiscal year ended Jan. 31, 2022. But the company’s revenue sank to $27.3 million, down 1% from $27.5 million a year earlier, while the number of recurring software customers fell from 88 to 66 due to liquidity issues.

As revenue flat lined, IronNet’s debt continued to mount. In addition to the $15.2 million received from C5 Capital, private equity firm 3i said on Aug. 23 that IronNet was in default on a $7.5 million convertible note and demanded prompt payment. IronNet also has $8.5 million outstanding on promissory notes from members of the company’s board as well as $500,000 outstanding on a note for Korr Acquisitions.

As of midday Friday, IronNet had yet to officially file for bankruptcy, according to federal court records.





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    Implementing Patch Management Systems

    Cybercriminals often exploit software vulnerabilities to illicitly gain access to systems. Small businesses can automate the patch management process to keep their software and systems current. Patch management tools can scan the network, identify outdated software, and deploy necessary updates automatically. By automating patch management, businesses can significantly reduce the risk of exploitation through known vulnerabilities.

    Enabling Multi-Factor Authentication (MFA)

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    Automating Security Auditing and Compliance

    Compliance with industry regulations and standards is crucial for small businesses, as non-compliance can lead to severe penalties. Automating security auditing and compliance processes can help small businesses meet these requirements efficiently. Utilizing automated tools that scan systems for vulnerabilities, assess configurations, and generate compliance reports simplifies the auditing process. This automation ensures that businesses can identify security gaps and address compliance issues promptly.

    Deploying Automated Data Backups and Recovery

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    Educating Employees with Security Awareness Training

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    As cyber threats continue to evolve, small businesses must adopt proactive cybersecurity measures to protect their sensitive data and operations. By embracing automation, small businesses can effectively enhance their cyber defense capabilities. From automated threat detection and patch management to multi-factor authentication and data backups, these automation strategies provide small businesses with robust security solutions despite limited resources. Small businesses can mitigate risks, safeguard their digital assets, and focus on growth and innovation by automating cybersecurity tasks.

    What Is Ethical Hacking? Unraveling the Enigma of Cybersecurity's Guardians

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    The Vital Role of Ethical Hackers in Cybersecurity

    The role of an ethical hacker is vital within the cybersecurity industry. Armed with a wealth of knowledge and experience, these experts embark on a noble quest: to uncover vulnerabilities and safeguard the integrity of digital systems. Their mission? To perform risk assessments and test the foundations of security in organizations.

    To achieve their goal, ethical hackers immerse themselves in the expanse of security breaches, exploits, and vulnerability scenarios. They leave no stone unturned. Their goal is to protect organizations from malicious attacks, ensuring that the digital fortress remains untouchable.

    Don't underestimate the importance of ethical hacking. As the world becomes increasingly interconnected, cybersecurity has never been more pressing. According to a report by Emergen Research, the cybersecurity industry is expected to expand at a compound annual growth rate (CAGR) of 12.0% to 13.4% from 2022 to 2030. This surge in demand reflects the critical importance of ethical hackers in fortifying digital infrastructure against the relentless onslaught of cyber threats.

    Embracing the Journey: Continuous Learning and Certification for Ethical Hackers

    Becoming an ethical hacker requires diverse skills and knowledge. Understanding the types of hackers is crucial, as it provides insights into how they operate. Armed with this knowledge, ethical hackers delve into cutting-edge tools and techniques. They leverage their skills to identify vulnerabilities and devise countermeasures.

    The responsibilities of an ethical hacker transcend merely identifying weaknesses. They also recommend solutions and implement robust security measures. Their expertise helps organizations fortify their defenses, minimize breaches, and protect sensitive data from falling into the wrong hands.

    The Tools of Ethical Hacking

    Curious about the tools an ethical hacker uses? They have access to a diverse range of tools. These tools allow them to probe and analyze digital systems, uncover weaknesses, and assess the resilience of security measures. While the specific tools vary based on the objectives and preferences of individual ethical hackers, there are several standard tools they employ. 

    One such tool is the ever-popular Nmap (Network Mapper). Nmap is a powerful network scanning and mapping tool that allows ethical hackers to examine hosts and services on a network. It helps identify open ports, detect potential entry points, and provides a comprehensive overview of the network's structure. By leveraging Nmap's capabilities, ethical hackers gain valuable insights into the system's vulnerabilities, enabling them to devise targeted strategies for fortification.

    Another essential tool in the ethical hacker's arsenal is Metasploit. Metasploit is an open-source framework that facilitates penetration testing and vulnerability assessment. It offers a wide range of exploits, payloads, and auxiliary modules, empowering ethical hackers to simulate real-world attack scenarios. Employing Metasploit's extensive collection of exploit codes, ethical hackers can uncover weaknesses, gain unauthorized access, and assess the system's defenses against potential threats.

    WireShark, a network protocol analyzer, is another indispensable tool for ethical hackers. It allows them to capture and examine network traffic, providing deep insights into the packets traversing the network. With WireShark, ethical hackers can scrutinize individual packets, analyze network protocols, and identify suspicious or malicious activity. This tool enables them to detect anomalies, trace the origin of potential security breaches, and assess the security posture of the network.

    Additionally, Burp Suite, a web application security testing tool, plays a significant role in the ethical hacker's toolkit. Burp Suite allows hackers to intercept, analyze, and modify HTTP/S traffic between web browsers and servers. It helps uncover vulnerabilities in web applications, including SQL injection, cross-site scripting (XSS), and CSRF (Cross-Site Request Forgery). Ethical hackers can use Burp Suite to identify weaknesses in web applications, effectively fortify defenses, and protect against potential attacks.

    These are just a few examples of the standard tools ethical hackers use. Ethical hacking is constantly evolving, and new tools and techniques regularly emerge to adapt to the ever-changing threat landscape. Ethical hackers leverage these tools to assess and strengthen the security posture of organizations, helping safeguard sensitive information, protect against cyber threats, and ensure the resilience of digital systems in an increasingly interconnected world.

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    References:

    "Cybersecurity Market, By Component (Hardware, Solution, Service), By Security Type, By Solution, By Application (IT & Telecom, Retail, BFSI, Healthcare, Defense & Government, Manufacturing, Energy, Others), By Region Forecast to 2032". Www.Emergenresearch.Com, 2023, https://www.emergenresearch.com/industry-report/cyber-security-market. Accessed 25 May 2023.

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    Cyber Insurance: An Essential Safety Net

    Like any insurance, cyber insurance covers financial losses related to cyber incidents. This can include costs associated with data recovery, notification of affected parties, legal fees, public relations efforts, business interruption, and even extortion payments demanded by hackers. In essence, cyber insurance is designed to help a company recover from a cyber attack by mitigating the financial impact. It provides an essential safety net that can make the difference between a company going out of business and staying afloat after a cyber-attack.

    Coverage Tailored to Your Business

    One of the key advantages of cyber insurance is that it can be tailored to fit the specific needs and risk profile of your business. Different businesses have different cyber risks. For example, a healthcare provider may need coverage for patient data breaches, while a retail business might require protection against credit card fraud. Cyber insurance policies can be customized to provide the coverage your business needs most.

    The Rising Importance of Cyber Insurance

    Cyber insurance is growing in importance as businesses become more digital and data-driven. It's not just about whether your business will experience a cyber-attack, but when it will happen. Data privacy laws are becoming more stringent, which means businesses can face hefty fines for failing to adequately protect customer data. Cyber liability insurance can provide coverage for these regulatory fines.

    Cyber Insurance - An Investment Worth Making

    Investing in cyber insurance is like putting on a seatbelt while driving. It doesn't prevent an accident, but it can significantly mitigate the damage if one occurs. Cyber insurance is an essential part of a comprehensive risk management strategy, providing financial protection and peace of mind in a digital age fraught with cyber threats. Regardless of your business size or industry, having cyber insurance can help you navigate the aftermath of a cyber-attack by protecting your financial resources.

    PSL’s Easy Guide to Understanding Cybersecurity

    The world of cybersecurity can often feel like a maze of technobabble and obscure acronyms. Yet in an era where our lives increasingly depend on digital infrastructure, it's important to have a basic understanding of the terminology involved. Learning about cybersecurity can help you avoid common mistakes and limit the chance of becoming a victim of these crimes.

    Here is an overview of common cybersecurity terms.

    1) Cybersecurity

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    2) Malware

    Malware is any malicious software that can damage or infiltrate computers without the user's consent.

    Here are the most well-known types of malware.

    Virus

    Like a biological virus, a computer virus attaches itself to a host (in this case, a file), and spreads when the file is shared, infecting other files and systems.

    Worm

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    Trojan

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    Ransomware

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    Spyware

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    3) Phishing

    Phishing is a common attack that tries to gain personal information by using deceptive emails and websites. The attacker, masquerading as a trustworthy entity, uses a variety of strategies to trick the victim into opening an instant message, email, or text message.

    4) Firewall

    A firewall is an IT security tool that controls network traffic using predetermined security rules. Think of it as a digital barrier limiting unauthorized access to your network or computer.

    5) VPN (Virtual Private Network)

    A VPN masks your internet protocol (IP) address to make your online actions nearly untraceable. VPN services establish encrypted connections to provide much greater privacy while using the internet.

    6) Encryption

    Encryption converts data into a code to prevent unauthorized access. When data is encrypted, it appears as gibberish unless you have the decryption key to convert it back to its original form.

    7) Two-Factor Authentication (2FA)

    2FA is a common security process in which users must provide two different authentication factors to gain access to an account. For example, in addition to a password, you might also need to enter a code sent to your phone.

    8) Darknet/Dark Web

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    9) Data Breach

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    10) Botnet

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    Closing Thoughts

    Understanding cybersecurity is not just for the tech-savvy; it's for everyone. We are all potential targets for cyber threats, and comprehension of basic cybersecurity terminology can make a significant difference in safeguarding ourselves and our digital assets.

    Employing cybersecurity measures also helps to keep your digital data safe. This might include using a VPN, enabling two-factor authentication, or simply being wary of suspicious emails to prevent phishing attacks.

    Ultimately, it's not necessary for everyone to be a cybersecurity expert, but a basic understanding of the key terms can be an empowering first step in better securing your digital life. This newfound knowledge can provide you the confidence to navigate the online world with more safety and assurance.