  Early-stage firms play a significant role in driving innovation and creating
new products and services, especially for cybersecurity. Therefore, evaluating
their performance is crucial for investors and policymakers. This work presents
a financial evaluation of early-stage firms' performance in 19 cybersecurity
sectors using a private-equity dataset from 2010 to 2022 retrieved from
Crunchbase. We observe firms, their primary and secondary activities, funding
rounds, and pre and post-money valuations. We compare cybersecurity sectors
regarding the amount raised over funding rounds and post-money valuations while
inferring missing observations. We observe significant investor interest
variations across categories, periods, and locations. In particular, we find
the average capital raised (valuations) to range from USD 7.24 mln (USD 32.39
mln) for spam filtering to USD 45.46 mln (USD 447.22 mln) for the private cloud
sector. Next, we assume a log process for returns computed from post-money
valuations and estimate the expected returns, systematic and specific risks,
and risk-adjusted returns of investments in early-stage firms belonging to
cybersecurity sectors. Again, we observe substantial performance variations
with annualized expected returns ranging from 9.72\% for privacy to 177.27\%
for the blockchain sector. Finally, we show that overall, the cybersecurity
industry performance is on par with previous results found in private equity.
Our results shed light on the performance of cybersecurity investments and,
thus, on investors' expectations about cybersecurity.
