Breaches don’t wait for your company to be ready. They happen as soon as your business is vulnerable. And most businesses don’t realize they are.

Four in five small businesses are hit by breaches, and the consequence of a security incident hits them much harder. The cost of a security incident regularly exceeds $1 million — not including the long-term reputational harm that can be far harder to recover from. For a startup operating on a limited runway, a breach is an existential threat.

Despite what’s at stake, many startups rely on default security configurations and shared credentials to keep operations moving. But these practices don’t just create easy entry points for attackers. They also become ingrained patterns that are harder and more costly to change as you scale. 

Why startups are prime targets for breaches 

Cybercriminals use automated scans to identify system and network vulnerabilities. These automated scans flag exploitable gaps — and if you’re a small business, that gap is likely to be wider due to fewer security layers, default configurations, and limited visibility into exposure.

Take, for example, PhoneMondo: a team of just five employees, had 10.5 million records stolen in a January 2025 breach. Airline giant Qantas, with 11,467 employees, also suffered a breach in 2025 that saw more than 11 million customer records being leaked online. 

While attackers may reap significant rewards by targeting bigger firms, breaching them takes more work and demands sustained effort, custom tooling, and patience — all of which increase the attacker’s risk. Startups with weaker defenses represent lower effort and reasonable reward, making them appealing targets.

  • Low-friction access: Cybersecurity for startups is often deprioritized in favor of product development. Many rely on default security configurations and weak security practices that can be quickly exploited.
  • High-value data: Startups handle high-value data from day one. Everything from customer emails and payment details to proprietary technology can be attractive targets for resale and theft.
  • Access to bigger targets: Startups often integrate with larger enterprise clients. A breach in your company could become an entry point into a bigger target, making your company a liability.

Security debt compounds faster than you think

The security decisions you make at the start become the security culture that scales with your business. Bad security culture compounds. For example, the habit of sharing admin passwords may be a pragmatic shortcut for a team of three. It becomes a glaring vulnerability for a team of 30. This is security debt. The longer these weak practices remain, the harder and more costly they become to fix.

Security debt is an obvious red flag during due diligence. When clients work with you, they are entrusting you with their data, which also includes their customers’ data. A breach on your end becomes a liability that puts them at risk of noncompliance and damages their reputation. That’s why enterprise clients won’t sign on the dotted line without proof that you handle data securely; whether that’s SOC 2 compliance, GDPR readiness, or HIPAA certification, depending on your industry. If your startup doesn’t have a strong cybersecurity foundation, deals stall and die.

The flip side is also true: Good security habits compound just as quickly. Training a team on proper credential management from day one is far easier than forcing a culture shift at week 50. By building security from the beginning, you make secure defaults the standard, which means fewer fires later and a smoother compliance and dealmaking journey.

The good news is that strong cybersecurity for startups doesn’t require massive budgets or sacrificing speed. You just need to make intentional decisions that establish secure security practices before bad habits take root.

Secure your startup with these first steps

Building a strong foundation from the start takes less time than trying to retrofit it later. The decisions you make now will shape your security posture for years to come. Here’s where to focus first.

Secure your perimeter 

Your network perimeter is no longer defined by the walls of your office space. With hybrid and remote work now the norm, sensitive business traffic is routed through dozens of unsecured connections — from coworking spaces, cafes, home networks, and even on airplanes — exposing your business to a myriad of network security threats. 

Use a business VPN to secure a modern and distributed team. All team traffic is immediately encrypted, no matter where your team connects from. This prevents attackers from intercepting sensitive information such as credentials, customer data, and your intellectual property.

Secure your people 

Attackers don’t just target systems; they target people, too. And your team handles sensitive data every day. People prioritize convenience, which is why weak password practices are common — they stem from security fatigue. Protect your accounts with a team password manager and enable 2FA to make stolen credentials useless. 

Choosing an encrypted email solution with a custom email domain also protects sensitive communications from interception, keeping internal discussions secure and giving your team the confidence to share information freely. 

Secure your assets

IP, customer data, financial information, roadmaps — this is what your company is built around. They’re also what attackers want most. Breaches don’t just mean lost files; they expose your startup to ransomware demands, regulatory penalties, and reputational damage. The best way to protect your assets? 

Adopt end-to-end encrypted cloud storage to store your files and guard them from unauthorized access. Pair that with granular access controls to ensure only the right people can access sensitive data, reducing risk if an account is compromised. 

Cybersecurity is not something you can afford to delay. If you’re a founder looking to build fast without compromising security, check out The Founder’s Blind Spot: The 100-day blueprint to secure your company for a step-by-step plan to build security into your startup from day one.