Dark Web Realities: What Cyber Criminals Know About Your Portfolio Companies

The Invisible Threat Lurking in the Shadows 

Most investors focus on financials, market position, and operational efficiency when evaluating an acquisition. However, in the digital age, a new dimension of risk has emerged - the dark web. 

This hidden part of the internet is where cyber criminals buy, sell, and trade sensitive corporate data, including stolen credentials, intellectual property, financial records, and even insider information. For investors and private equity firms, failing to assess a portfolio company’s dark web exposure can lead to unexpected breaches, regulatory fines, and significant valuation drops. 

What do cyber criminals already know about your portfolio companies?  

What’s Lurking on the Dark Web? 

1. Compromised Employee Credentials 

One of the most common cyber threats for businesses is credential theft. Cyber criminals use phishing attacks, malware, or data breaches from third-party services to steal login details and sell them on the dark web. 

Real-world example: A breached HR system revealed login credentials for multiple executives at a mid-market manufacturing firm. Those credentials were later used in a Business Email Compromise (BEC) scam, diverting millions in fraudulent wire transfers. 

Investor risk: If a portfolio company has exposed credentials, attackers can infiltrate email accounts, cloud services, and financial systems; leading to operational disruptions and fraud. 

2. Intellectual Property and Trade Secrets for Sale 

Hackers target proprietary technology, patents, and business strategies, often selling them to competitors or cyber criminal groups. 

Real-world example: In 2022, a cyber security firm uncovered stolen source code and R&D data for a PE-backed SaaS company being auctioned off on a dark web forum. 

Investor risk: The exposure of intellectual property reduces competitive advantage, damages reputation, and can diminish exit valuations. 

3. Insider Threats and Employee Data Leaks 

Disgruntled employees or compromised insiders often sell sensitive company information on the dark web. These leaks can include: 

• Financial performance data (before earnings announcements) 

• M&A deal information (before they are public) 

• Corporate security policies (helping attackers bypass defences) 

Real-world example: A hacker on a dark web forum offered insider access to a Fortune 500 company’s payroll system, allowing cyber criminals to manipulate salary payments and siphon funds. 

Investor risk: Insider threats can jeopardise deals, violate compliance regulations, and lead to financial fraud. 

4. Ransomware Targets & Blackmail Schemes 

Ransomware groups scout the dark web for high-value targets, focusing on companies with weak security and deep pockets—such as PE-backed firms and financial institutions. 

Real-world example: In 2023, a ransomware gang infiltrated a portfolio company in the healthcare sector, encrypting patient data and demanding a $10 million ransom. The PE firm had no cyber security strategy in place, leading to a costly and embarrassing breach. 

Investor risk: Ransomware can shut down operations, lead to extortion payments, and create significant legal liabilities. 

What Can Investors Do to Protect Their Portfolio Companies? 

Conduct Dark Web Intelligence Audits 

• Regularly monitor the dark web for leaked credentials, sensitive data, and insider threats. 

• Identify portfolio companies that are high-risk targets before an attack occurs. 

Implement Strong Cyber Hygiene 

• Enforce Multi-Factor Authentication (MFA) across all systems. 

• Conduct phishing simulation training for employees. 

• Mandate password managers to prevent credential reuse. 

Strengthen Cyber Due Diligence Before Deals 

• Evaluate past breaches and security posture of target companies. 

• Assess insider threat risks within management teams. 

• Ensure cyber insurance policies are in place to cover potential breaches. 

Create an Incident Response Playbook 

• Every portfolio company should have a clear plan for handling data leaks and ransomware attacks. 

• Establish crisis communication strategies to mitigate reputational damage. 

Dark Web Risks Aren’t Theoretical—They’re Happening Right Now 

The dark web isn’t just a hacker playground; it is a real-time marketplace for stolen corporate assets. For investors and private equity firms, understanding the cyber threats lurking in the shadows is just as important as analysing balance sheets and cash flow statements. 

Cyber Due Diligence are industry leaders in helping investors uncover hidden cyber risks, monitor dark web exposure, and secure portfolio companies from evolving threats. 

Are your portfolio companies already compromised? Let’s find out.