Startups operate at high speed, focused on product development, customer traction, and investor milestones. Of course, these are the top priority to prove the viability of the product and company. But attackers, investors, regulators, and enterprise clients don’t offer exemptions for being new. Ignoring key cybersecurity practices early can lead to breaches, failed audits, or lost deals later. With just a little awareness and small amount of effort, startups can get started on the right foot and set themselves up to easily grow and mature cybersecurity as needed.
This article explores five common cybersecurity mistakes—’landmines’—that startups frequently step into and could easily avoid with minimal effort. Addressing these areas will help startups structure their cybersecurity programs without taking their focus off from the product and customer traction.
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Landmine 1: Relying Solely on IT for Security
Startups often rely on their IT support or internal engineers to handle cybersecurity. While there are some very talented IT and engineers out there, managing email accounts, devices, and cloud storage is not the same as building a secure risk posture. Security leadership requires setting a strategy, enforcing policies, and guiding the company through evolving threats and compliance needs.
An IT team focuses on availability and functionality. A cybersecurity leader focuses on confidentiality, integrity, and risk management. For example, your IT partner may enable access to a cloud storage folder, but who ensures that only authorized users can see sensitive investor data? Who reviews third-party risk or incident response plans? Without a security-focused role, these gaps persist.
Early-stage companies can close this gap by engaging a Fractional CISO who provides security oversight without requiring a full-time executive. This helps ensure the startup doesn’t mistake operational uptime for true cyber resilience.
Landmine 2: Neglecting Vendor Risk Management
Startups rely heavily on third-party platforms and APIs, from cloud providers and CRM tools to marketing automation and payments. But most don’t assess the security of these vendors—or worse, they don’t even maintain a list. If a SaaS provider experiences a breach, your customer data could be exposed, and your reputation may suffer.
Vendor risk management starts with keeping an inventory of vendors and identifying which vendors access or store your data. Next, review their security certifications (SOC 2, ISO 27001), data handling practices, and incident notification timelines. Any vendors that don’t have at least one external security certification should be cause for concern if they access confidential data electronically. Many startups skip contract reviews and end up without protections or exit clauses when something goes wrong.
Investors and enterprise customers now expect startups to have a vendor review process in place. A lightweight approach—maintaining a spreadsheet with vendor details and collecting key documents—is recommended for startups and can help you demonstrate due diligence and reduce risk to potential investors.
Landmine 3: No Data Classification or Handling Policies
If your team doesn’t know what data is sensitive, they won’t know how to protect it. Many startups treat all data fields, files and databases the same, whether it’s internal notes or production user data. This can result in personal data being stored in unsecured locations or shared without encryption.
Defining what data is considered personally identifiable information (PII) combined with a simple data classification policy can solve this. Define categories like ‘Public’, ‘Internal Use Only’, ‘Confidential’, and ‘Restricted’. Then apply rules for how each category should be handled—for example, whether it can be emailed, stored in cloud folders, or shared externally.
Training is equally important. Help your team understand why PII, customer data, credentials, and financials need stricter controls. Once classification is in place, it becomes easier to implement appropriate access controls, encryption, and monitoring.
Landmine 4: Delayed Security Planning Until Product Launch
It’s common to hear startup founders say, ‘We’ll deal with security after we launch.’ Unfortunately, by the time your product hits the market, the damage may already be done. Vulnerabilities in code, insecure configurations, or poor access controls can lead to breaches or failed client reviews.
Embedding security early in the development process—known as ‘shift-left security’—pays long-term dividends. Start with secure coding guidelines, secrets management, and automated security checks in your CI/CD pipeline. Involve your security lead in product design discussions to anticipate risks.
When security is part of your SDLC, your product is more defensible, your team is more confident, and your customers see that you take trust seriously. Waiting until a breach—or a lost enterprise sale—forces your hand is simply too late.
Landmine 5: Assuming Compliance Equals Security
Achieving SOC 2 or HIPAA compliance is a major milestone—but it doesn’t make your startup secure. Compliance frameworks set minimum standards. Real security is ongoing, evolving, and cultural.
Many startups treat compliance as a checklist. They prepare just enough for the audit, pass, and move on—without building a sustainable program. This approach leaves teams unprepared for incidents, lacking monitoring, and unsure how to adapt when new threats or regulations emerge.
The best security programs use compliance as a springboard. Audit preparation becomes an opportunity to fix real risks, tighten controls, and improve documentation. Startups should think of compliance as a subset of security—not a finish line. A mature approach demonstrates to customers and investors that security is embedded in the business, not bolted on.
Bonus Landmine: Ignoring Open Source License Governance
Startups often accelerate development by leveraging open source libraries, frameworks, and tools—but they rarely establish governance over how those components are selected, tracked, or licensed. This oversight can create significant legal and intellectual property (IP) risks down the line. For example, integrating a component under a restrictive copyleft license (like GPL) may inadvertently require disclosure of proprietary source code, undermining the company’s IP value or triggering compliance issues during due diligence. Also, when assessing the open source package consider if it has an active community contributing to it to address bugs and vulnerabilities. Some projects aren’t updated in years which means no patching or updates.
Lack of a clear open source policy also makes it difficult to respond to security vulnerabilities (e.g., Log4j), conduct license audits, or ensure that developers avoid risky or unmaintained packages. As a company prepares for fundraising, acquisition, or enterprise deals, investors and legal teams will scrutinize how open source is managed.
To avoid this landmine, startups should implement a lightweight open-source governance policy early. Create a simple matrix of which licenses are approved for what use cases. The three use cases to consider are internal use only, hosted, and distributed. Hosting and distribution can sometimes trigger additional requirements in open source licenses.
A step up would be to automate license scanning (using tools like Snyk or FOSSA) and educating developers on compliant use. It’s not about saying “no” to open source—it’s about using it responsibly and protecting your valuation.
Avoiding these cybersecurity landmines gives your startup a competitive edge. Investors and customers are increasingly security-conscious, and early action can build long-term trust.
GrowthPoint helps startups embed cybersecurity without slowing down innovation. From vendor risk management to compliance readiness, our Fractional CISO services deliver strategic leadership tailored for early-stage companies. Contact us for more information on how we can help.