TWST: Please begin with a brief historical sketch of the company and a picture
of the things you are doing at the present time.Mr. Larsen: First of all, VirnetX stands for virtual network exchange. We are
first and foremost a security company that enables the next generation of
virtual networks. The company was founded and incorporated in 2005. Privately
held since late 2007, the company has been publicly listed on the American Stock
Exchange under the call letters VHC. VirnetX Holding Corporation is based in
Scotts Valley in Northern California. TWST: You recently formed an alliance with ipCapital Group.Mr. Larsen: This is nothing less than a blockbuster announcement for VirnetX.
ipCapital is a premier intellectual property consulting firm. This partnership
is ideal, based on our significant intellectual property patent position. This
alliance was made with the understanding that ipCapital, under the direction of
CEO John Cronin, would architect, template, strategize and implement VirnetX's
licensing practice. As a result, we are currently moving forward with our
licensing strategy with the help of John Cronin and the ipCapital Group.TWST: Would you describe your principle products?Mr. Larsen: VirnetX is a security company involved in the design and development
of foundational security technology. Our core technology consists of a set of
techniques and methods that enable us to license and then implement the methods
into our own products. These methods enable seamless, fully authenticated and
encrypted real-time communications channels. Everything that VirnetX has in its
deep technology portfolio is designed to facilitate and enable security, and we
will enable this with our partners through a licensing strategy and bringing our
own products to market in 2009.TWST: What is the competitive landscape like and what are your competitive
advantages?Mr. Larsen: The competitive landscape consists primarily of enterprises
inventing and implementing security solutions within their own products. VirnetX
is a company that looks to deploy its techniques across the entire Internet from
a vendor-neutral and a protocol-independent perspective. We connect, enable and
facilitate inter-communications between systems that have been designed for
vendor-specific solutions.TWST: Would you discuss your patent portfolio?Mr. Larsen: We have 18 US and international patents granted and 29 applications
pending for secure real-time communications and collaboration technologies.
VirnetX believes that more users will move from a physically defined network to
a virtually defined network. Much like individuals today are members of a
physical network, in order to operate virtually and seamlessly they need to move
into a more widely deployed virtual network. This widely deployed virtual
network is cryptographically designed or authenticated versus physically defined
and authenticated.TWST: Would you sketch out your strategic agenda for the next two to three
years?Mr. Larsen: In 2008 we are focusing on licensing our unique technology. Much
like how Qualcomm designed licensing for CDMA, we are designing our licensing
strategy to enable the widespread adoption of VirnetX's technology with vendor
companies and certainly within the company's own service offerings. First and
foremost, we will be a technology and licensing company and then, secondly,
VirnetX will aim to offer products and services that utilize its patents and
methods in 2009.TWST: What about possible challenges or problems? Mr. Larsen: VirnetX's first five customers and strategic alliances are the
company's most important step in the marketplace. Facilitating those
relationships with the help of ipCapital pose the most immediate challenges and
opportunities. TWST: What is the picture that you would hope to see for the company in about
three years?Mr. Larsen: In three years, we would like to be positioned (from an alliance and
major player's perspective) as a leading company for next-generation and unified
communications. We believe that in order to do that, it's important to partner
with the right organizations to effectively implement our licensing practice and
facilitate the delivery of next-generation networks to the marketplace.TWST: What might be some year-by-year milestones or indicators that investors
could look for?Mr. Larsen: Currently, we are pre-revenue with a $200 million market cap. Our
first strategic licensing agreement will be a significant company milestone for
us. This is the marker, showing that we're on track to produce significant
revenue and additional value to our shareholders.TWST: How do you approach R&D?Mr. Larsen: R&D is a very important aspect of VirnetX. In fact, half of our
personnel are in R&D. We have employed some of the brightest and best
technologists in the field of security technology in our Virginia location.TWST: Would you tell us about your own background and expertise? Mr. Larsen: I'm a domain expert in security. I have run licensing practices on a
global scale for cryptographic libraries for RSA Security and implemented and
facilitated the export of strong cryptographic libraries outside of the United
States. I have also built, designed and implemented security foundation products
and services when I was at Phoenix Technologies. And I have a background in the
financial sector as a venture capitalist specializing in security investments as
a venture partner at Osprey Ventures. TWST: What occupies your own attention most on a day-by-day basis?Mr. Larsen: I would say on a day-by-day basis I'm most occupied with
quantifying, structuring and rolling out our licensing practice with ipCapital. TWST: Would you also tell us about the backgrounds of one or two of your
colleagues?Mr. Larsen: I'll give you some background on Dr. Robert Short, our Chief
Scientist. He came from the Science Applications International Corporation
(SAIC) and has a PhD from Purdue. SAIC is one of the foremost technology
integrators and research institutions in the country. Dr. Short has been
involved in many crisis situations where national security was under his
direction. He operated teams in the military, homeland security and Department
of Defense initiatives where he was relied upon by the country's foremost people
securing the country. Dr. Short was a member of the founding and inventing team
of VirnetX's patents. When he was at SAIC, he was awarded the top scientist
award out of 10,000 PhDs at SAIC.
Another one of my colleagues is Edmund "Gif" Munger. He's the Chief Technology
Officer for VirnetX and the co-inventor of the company's technologies. Not only
did he work at SAIC, but he was also the chief system architect for the FBI's
Counterterrorism Data Warehouse Prototype and has worked on several advanced
defense systems.
We're very privileged to have Dr. Short and Edmund Munger as part of the VirnetX
team.TWST: How many employees do you have?Mr. Larsen: Currently, we have 10 full-time employees and at any one time can
have up to 120 people working on VirnetX on an outsourced basis. TWST: Would you describe your investor base?Mr. Larsen: Our investors are widespread, ranging from small hedge funds to high
net worth individuals. We're moving into larger institutions as well, conducting
a financial road show in the first part of April. Small hedge funds and high net
worth individuals have purchased VirnetX shares on a public basis. We also have
a large contingency of founder and employee stock. Lastly and just most
important is our new set of target customers institutions.TWST: What would be the two or three best reasons for the long-term investor to
take a very close look at VirnetX?Mr. Larsen: If I were to look at an analogous company, I can best draw a
comparison to being the next Qualcomm. We believe our designs, our patents, and
our overall impact on the marketplace are very similar to what Qualcomm looked
at when they were undertaking, pursuing, licensing and implementing circuit-
switched CDMA technologies with the equivalence in the Internet Protocol world
and bringing next generation network technology to us. TWST: Is there anything that you would like to add, especially regarding
strategies, long-term objectives and regions for an investor to look at the
company?Mr. Larsen: Our patent portfolio is nothing less than the strongest portfolio in
the marketplace today and it's an asset that's going to be monetized and will
return a rich set of rewards to our investor base.TWST: The way you've described things, you must be on the verge of a great deal
of personal satisfaction considering the value of what you are offering.Mr. Larsen: We're proud of what we have been able to achieve and where we are at
right now. We've hit every target and exceeded every goal and we plan on
growing the company and returning an investor dollar even more so than we have
today.TWST: What would be your feeling down the road about being acquired by a larger
company?Mr. Larsen: VirnetX technology needs to be industry- wide. Right now, as a
company, we believe that it's our job to facilitate the broad implementation of
our patented technology through many vendors, not just one. This will help drive
a wider target base and greater adoption of the technology.TWST: Thank you. (MC)KENDALL LARSEN
Chairman, President & CEO
VirnetX Holding Corporation
5615 Scotts Valley Drive
Suite 110
Scotts Valley, CA 95066
(831) 438-8200
www.virtnetx.com
e-mail: info@virnetx.com
Security Software & Services >> CEO Interview >> April 21, 2008
Kendall Larsen
Kendall Larsen
KENDALL LARSEN is Chairman, President and CEO of VirnetX Holding Corporation.
Prior to joining VirnetX, he was a security domain expert at Osprey Ventures,
part of the investment team focusing on early stage companies in the business
and consumer technology marketplace. Before Osprey, he was Senior Vice President
and General Manager of Phoenix Technologies' security division... More










