It's not a kickback because Cyberstarts is providing 'points' which eventually equate to carry for them as advisors to the startups in the fund, to which they donate their time, expertise, and so on.

The implication, you could argue, is that that also includes purchases from the startups, but that isn't at all a requirement of the program, at least as far as anything legal is concerned, to my knowledge.

That said, it makes sense that if you're advising companies that are building products with your advice in mind, they're going to be solving problems you need solved, so you're more likely to buy from them. The fact that you have a good working relationship with them already is a bonus, of course.

That's the optimistic view.

The cynical view is that it's no different from drug companies paying doctors to shill their pills.

It's definitely not uncommon. Illegal? Should be, the question is how they got paid and for what. There are so many C-level shills these days, it's sickening.

Everything is securities fraud, so a payola consortium pumping Wiz through funding rounds sounds bad. Wiz is great, so the question is if they are > $23B great, and how they got there. And more so, why would a gov prosecutor bet on this case over others, or a private investor who has shares & reputation at risk.

OTOH, maybe The Honest Services Statute where CISOs violate their fiduciary duty by prioritizing security/risk budget & focus to a VC paying them. I don't see most impacted companies making this public vs a warning or voluntary resignation.

It clearly happens a lot, but the only successful prosecution I remember was at Netflix: https://www.justice.gov/usao-ndca/pr/former-netflix-executiv... . A funny thing is the VC is doing all this semi-officially: many but not all of the illegal bits go away - the gov has less to prosecute on when everyone files their taxes accurately !