Christina Cacioppo says an 80% growth business with 80% margins will beat a 160% growth business with 30% margins over time, despite the latter's higher valuation multiple.
Vanta's agent now generates interface on demand and asks permission before acting, with 25% of customers in that flow and a goal of 75%.
Cacioppo says Vanta is taking lower margins on model tokens because users compare prices against the underlying model, and says the talent war is very real.
Vanta's founder bets agents and margins build lasting software
Vanta started as a compliance company and is now using AI to become a broader security platform. Cacioppo's bet is that an agent-led product, healthy margins and top talent will matter more than valuation multiples or fashionable AI tactics. She is building for the long run as an independent company.
Takeaways
Durable growth and margins beat multiples. Cacioppo argues an 80% growth, 80% margin business will beat a 160% growth, 30% margin one over time, though the latter is valued at three to four times the multiple today. She watches ARR and ARR growth, not valuation.
Vanta's agent now drives the product. Vanta's agent generates interface on demand and asks permission before acting, such as removing a departed employee's accounts. About 25% of customers are in that flow and Vanta wants 75%. It spent a year modularizing its code base so agents can understand it.
Marking up model tokens loses on price. Users compare prices with the underlying model, so Vanta takes lower margins and focuses on usage. Swapping models is about quality, not cost, because its agents use far fewer tokens than coding agents. Everyone wants outcome pricing, but the unit of work is unclear.
Pay for top talent keeps accelerating. Vanta's top people earn roughly ten times what they did five years ago and should earn more. Investors worry less about dilution than in 2022 and 2023, and Cacioppo says the talent war is very real.
Custom models and forward-deployed engineers are overhyped. Cacioppo calls custom-trained models mostly investor marketing. Forward-deployed engineering works for Palantir with eight-figure contracts, but at five and six figure contract sizes the economics look upside down. She also counts low margins for their own sake as hype.
Vanta is widening from compliance into security. Vanta is becoming a platform across many security domains, fed by integrations with some 400 tools. Models persistently chain benign issues, so a constant agent-run penetration test is the vision for parts of it, though CrowdStrike will do it better for enterprises.
The goal is a large independent company. Cacioppo wants Vanta to be a large standalone company rather than an IPO or sale. Her hypothetical pitch to recruits imagines Sequoia writing a 10bn dollar check, then asks whether Vanta can reach 250bn dollars.
What comes next
Security becomes faster and more offensive, and humans mostly write evals.
If fixes happen at machine speed, companies will not need to prioritize vulnerabilities, where low-severity issues were once deferred ninety days.
Tap a name to go there · tap a line to see why they are linked
On this episode 2
Show 1
Government modernization rises because of AI, and CISOs are more likely to get budget.
Vanta's next five years will be expansive, building on its customer base and data.