DCM: The Successful Entrepreneur’s Choice.
Recourse Technologies was the leading provider of threat management solutions that contain, control and respond to both known and novel threats, including intrusions, internal attacks and denial of service (DoS, DDoS) attacks.
DCM seed-funded Recourse Technologies in 1999. At the time of DCM’s investment, the security industry was dominated by large public companies and had limited room for start-ups. DCM invested at a time when the purchasing behavior for security products relative to other IT solutions would result in a window of opportunity for new entrants to sell cutting edge security solutions to government agencies and Fortune 500 corporations, who were traditionally averse to purchasing from start-ups. The founders initially started developing their new solution in DCM’s offices and graduated to their own offices once the first product was developed.
DCM’s value-add to the company was multifaceted. DCM was instrumental in recruiting key management, including the VP of Business Development, VP of Sales and a well-known industry executive to act as an independent Board Member. DCM introduced customers and distributors in the U.S., Japan and other Asian countries. By 2002, international customers comprised 40% of Recourse’s revenue. Most importantly, DCM introduced new investors who put a term sheet down for all three subsequent rounds, resulting in no valuation decreases for the company despite the severe economic downturn in 2001 and 2002.
As Recourse produced the best of breed “honey-pot” security solutions and the best performing Intrusion Detection System (“IDS”) software in the world, its customer list grew to include the CIA, FBI, Navy, Japanese Police, VISA, American Express, Fujitsu and Sun Microsystems. The company’s rapid growth soon caught the attention of Symantec and other large players in the security industry. DCM was intimately involved with the business development discussions with these players and in 2002, Symantec acquired Recourse for $135 million in cash. During the IT nuclear winter after the Internet and Telecom bubble popped in 2000/01, this was a top 15 M&A deal in 2002. Recourse (now Symantec) products have become the world’s fastest threat management solutions on the Internet to contain, control and track malicious computer attacks.