Gili Raanan
Appearances
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
But a hit rate of four or five Unicorn, including one DecaCorn and a few other companies that each of them got acquired for hundreds of millions of dollars each, that hit rate was a proof point that there's something right about the model, about the thesis.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
But on top of luck, I think Warren Buffett once said, as he works harder and harder, he becomes luckier and luckier. So definitely luck is important. But I think the major factors here are a clear thesis. Cyber start is one simple thesis, one sector and a commitment to deliver real value to the founders we partner with.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
the clarity of that thesis and the fact we focus just on a single sector and we own it the founder selection criteria and i would love to share some example later on and the fact that we made our decision making process super simple by completely eliminating considerations like market, technology product, competition, business plan, pricing, whatever it is.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So we do not waste time on those things initially. We spend our time making sure that we bet on the right outlets. So luck, thesis, founder selection criteria, and then I would add two other factors. One is the commitment we have to get the product market fit as fast and as efficient as you could. And that's the whole story of our Sunrise Day program.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The service program means that you do not develop technology or solutions in a vacuum, that you build software, that you build software solutions that people really need and can use on a daily basis. And I would say the last element is that I'm surrounded by four amazing partners. Each of them is adding tons of experience and value and knowledge and coming from different backgrounds.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I think all those five elements, like CyberStarts, what it is today, and just to continue the story of CyberStarts, today, with all the humble beginning we had, we manage more than $700 million under management across five funds, four seed funds and one continuation fund.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The portfolio value today, cumulatively, is around $45 billion, which is 50% of the worldwide market cap of private cybersecurity companies. 50%. That means that we seeded 50% of the worldwide market cap for private companies in cybersecurity. And that's under seven years.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Yes. We believe in cybersecurity. Give us another seven years and let's see where we can go from here. Each of the four active funds delivered over 100% IRR to investors. So this is not just a case of one successful first fund and then living on the success of that fund. I think that we deliver value to founders and to limited partners across all the funds systematically.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
My personal experience as founder and builder taught me that startup is an insanely painful journey. It's super hard. And like it or not, you're going to face a lot of challenges. And that made me believe I shouldn't simply look for the smartest person in the room. High IQ helps. It's not a bad thing, but it's not the most important thing.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The most important thing in my view is the adversity and the ability to overcome it. For me, this is the greatest signal, the best signal for a terrific founder. Take, for instance, Fireblocks founder and CEO Michael Schoenloch. Let's start with the company so you understand the context. But Fireblocks is the leading crypto asset custody service for enterprise.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It's valued at around $8 billion, thousands of customers, including BNY Mellon and BNB Paribas and ABN AMRO. Five Blocks was my first investment in CyberStarts in 2018, June 2018. We invested $3 million, and that was the seed for Five Blocks. It's an $8 billion company today. And Michael's personal story is that he immigrated to Israel from the former Soviet Union as a child.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
He grew up without a father raised by a single mother. And he learned early on in his life to navigate through uncertainty. moving to a new country, learning a new language, learning how to deal with things and push through challenges. I loved it. I thought that's the most important thing.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Michael is a friend, is a brilliant guy, but I'm sure that there are people out there with higher IQ, but that's not what's important. When we started the company, just a few months after the first investment, we got into the first crypto winter. Six out of the 10 first design partners of Michael went bankrupt. So how do you deal with that? That's a major blow to your plan.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Design partners are so important to build a solution. And you have to simply rethink about the entire plan, about the focus and who the customers are. I think that his childhood experience, the roughness in him, the life experience that you'd face challenges and you'll manage to overcome them, that's what kept him moving forward. and overcoming those challenges and building an amazing business.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It's part of what I need. It always goes there. But I learned that what's important in a story is not the what, it's the why. It's not about... what you did. It's about why you did, why you choose to do that, why you pick job A and not job B, why you pick that partner in life, not another partner. It's always about the why. So it's not just about a unique, heartbreaking lifestyle.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It's spending time with an individual and understanding the way they make decisions, the way they analyze the situation, what drives them, what really makes them tick. And it's not so much about what they did and what. accomplishments they managed to achieve, et cetera. It's always nice to know that, but that's not what's important.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I think that in order to tell the full story of the Sunrise, I have to go back to 1997 and my first startup experience. By that time, I just finished a decade of service at the Israeli NSA in 8200. Tell you more about it in a few minutes. And by the way, the 8200 formation years for myself and got to work with Briad set of people.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And in many ways, those were the years where the cybersecurity market in Israel was created. I worked with folks like Shlomo Kremer, who is the founder of Checkpoint and Cato Networks today. And Gil Schwed, the Checkpoint CEO and founder, was just two years older than I am and We heard many stories about him. The officer that was sitting next to my office was Nir Tzuk from Palo Alto Networks.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So those were formation days. And I left the service and started a company. And we raised money from Sequoia Capital. So that was the first time I encountered into Sequoia Capital. Pierre Lamont was on my board. We didn't have a clear idea what we want to build.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
One of the first technologies we thought to develop the company around was a challenge response system that would distinguish between a human and a bot and a machine. Years after, I realized that the name for that technology is Captcha. So we had the luck to invent Captcha and build the first working prototype of Captcha. I hired two 16-year-old kids. At that point, we were not well-funded enough.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I hired two 16-year-old kids. Later, you know, Ohad Pressman, who was the CTO of Chegg, and Eyal Naval, who later became the CTO of Hippo Insurance. Two very successful companies and two very smart individuals. But their first real project in the commercial world was to build the first sculpture. So we built the first sculpture. And we tried as hard as we can.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And we couldn't find a business model for the technology. And that taught me a lesson. And we had to pivot into something else. And luckily, we pivoted into the web application firewall space. We were the first team to build a web application firewall. That was the path that company, Perfecto Technology, that later renamed into Sanctum, managed to build itself.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
That company later merged with Watchfire and got acquired by IBM. But that lesson of capture, that you can invent and build a very impactful technology, almost every person on the planet uses, and still you're unable to find a business model for the technology. That lesson convinced me that I was completely wrong about the way I approach my startup.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Starting with the technology and then search who has a problem that that technology solves. The process should be reversed, completely reversed. We should first look at what are the important pain points in a market, find the customers, find who's willing to spend money on solving that problem, and then go and build a solution that mere mortals can use.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And that shift in order, as simple as it sounds, I think that's what made CyberStarts as successful as it is, and that's what helped all those amazing founders really feel the full potential of their talents. We continue to evolve the Sunrise methodology because it's not just around product market fit.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It's actually a program that takes an entrepreneur from day one, from inception, through the first three or four years of running their business. But the early days of the sunrise is all around focusing on finding the most important pain point in the market.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And you do that by going out and speaking with large organizations, making sure you understand their priorities, what gives them the most, and only then
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So keep in mind that our company is B2B SaaS. So all of them sell to large organizations. So obviously large organizations are the customers and they are who you like to ask the questions. And the best person to ask is the chief information security officer that oversees the security operation for that business. The idea behind Sunrise process is that you're going to chase pain and identify pain.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
That requires a lot of smartness. Because if you're going to ask, go out and ask the chief information security officer, this week, what's your biggest pain? You'll get one answer. You ask the same person the same question in a week, you get a different answer. And then another week, you'll get another answer. And they're not smart. Playing games, they are just being human.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
There are other ways to identify pain. For instance, one of my most favorite questions is, who's the vendor you hate the most? Because if you don't like a vendor, that's a big motivation for you to displace that vendor. Another reason Important observation is words are cheap. So don't look at what the customer says.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Look at what the customer does, which means if you are running security for a large bank, you probably manage budgets of hundreds of millions of dollars. And if you claim that there's one thing that's inflicting a lot of pain for you, you worry about that. You think that your bank is at risk and you haven't done anything about it, probably not as important as you claim.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So you probably have done something. You downloaded an open source package to try it out. You took consultants to develop a temporary solution. You had real conversation with Palo Alto Networks or WIS to see if they can solve that issue for you. You've done something. So we are asking them not about their opinions, but what they actually did to try and deal with that pain point.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Eventually, we reverse the power balance in a conversation because we are not asking for favors. We are telling those organizations, hey, this is a new cyberstats team. That new team would spend about $100 million in the next three years on engineering alone to build one solution. That's the average for a cyberstats company, $100 million R&D budget for three years.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
What is the one thing that you care about that you'd like us to solve with our $100 million? You don't need to spend anything with that. We are giving you essentially $100 million of balance sheet to solve one pain point for your organization. And I found out that when you give people $100 million virtually, they listen and they think.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And then you take those answers and you're not having one conversation or two conversation. I think that to have a meaningful, a statistically meaningful outcome, you need to talk to dozens of organizations. You speak with dozens of organizations and you make a choice. This is the one pain point I'm going to go after.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And then you do another round of conversations, assuming you go after that pain point and ask them questions, how a solution would look like, because you really like the solution to be loved by the users. And only then, and sometimes it takes six months, only then you start to build software.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And if you think about the typical startup, when they get money from VCs, they start to get pressure to build software and push forward and hire people. And my approach is almost the opposite. Sit tight, don't get too excited. This is your last chance to pick the right problem to go after. So let's make sure we pick right. The outcome is that they build software that solves a major pain point.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It's verified with dozens of real customers, and they've built a solution that people would love because they talked to those people before they started to build code. Now, it doesn't work every team, but as I think I've demonstrated, the success rate is quite high.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It's a standard software building exercise, but perfectly done because you start from the end and walk backwards. It starts with the end in terms of value, what value the customer would like to produce with that piece of software. The science process doesn't end at six months. It's a full simulation of everything you're going to face in the next three or four years as a founder, as a company.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And how do you deal with it? And how do you architect your company in the best way to run as fast as possible in the first three or four years? So if you demo the product and then they didn't take you for product evaluation, why is that? If I tell you the man from the future tells you that they evaluated the product and didn't buy it, why is that?
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
We use a lot of simulations that assume failure and forces the founders to really analyze the situation, assuming a failure, and build their company to deal with it. So it's not just about product. It's about go-to-market team. It's about pricing. It's about channel strategy. It's about maybe location of headquarters.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Those are many, many elements that are being evaluated, examined during the time of the sunrise.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I don't take them lightly and we are fortunate to have amazing co-investors that have backed repeatedly our portfolio companies and we have tons of respect to their contribution and their support of the companies because CyberStarts can be as great as we like, but there are other smart, capable, knowledgeable people in the world and we're happy to get their help.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So we are definitely in the early days, we are highly involved in fundraising and helping our companies to finance their growth. My approach is that it is expensive to build important companies. Important companies are typically not cheap. When I hear founders getting advice like keep down valuations, make sure you don't raise too much money.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
My approach is your first priority as a CEO is to have enough money that you can build the right product, hire the right sales teams. That's expensive.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So in order to raise enough money, the valuation should be high as well because no founder would sell 50% of their company in series A, not in series B. So I'm all for raising a lot of money, assuming you've built the right product and you have the right team so you can scale and take on the opportunity.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
We typically see two types of deals. So if you like the pricing menu of two items, we see one market for First-time entrepreneurs, people who that company is the first experience as founders and executives. And then there's a different price, a different market for repeat entrepreneurs. What are those prices roughly?
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
For first-time entrepreneurs, we've seen C deals at anywhere between the $15 to $20 million post money. And for repeat entrepreneurs... I see a broad range starting from the $40, $50 million range, and sometimes it's going up quite crazy.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I do mind the pay. I've passed on deals where the price went crazy enough. And that's what I'm telling entrepreneurs, that their job is to make sure that they are the most important company in each of their investors' portfolio. Because at the end of the day, they fight for attention and bandwidth and access.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And when the investor ownership goes down significantly, it's hard to become the most important company in a portfolio when an investor owns 5% of their cap table. High prices, in my view, are double-edged swords for entrepreneurs at the early stage.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I believe that in any field where there's relatively uniformity of buyers, that's applicable. I would assume it's applicable for fintech, it's applicable for gaming, maybe even applicable for medical devices. But you need a fairly active ecosystem, not just from end users' perspective, but also from an M&A perspective. That's important as well, because not all your companies would go public.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
In the past 12 months, we've sold five portfolio companies at cumulative value of $2.5 billion. That's important as well.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Achieving amazing returns has always been super hard. It would continue to be hard. But I believe that with everything said earlier about the perfect storm in cybersecurity, the introduction of AI and the way it's going to redefine cybersecurity, I believe that the opportunity is there. Obviously, the quality of the talent we see is always getting better.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And that's what keeps me so optimistic, just to see the endless stream of smart, eager, hardworking young individuals who are determined to build the next solutions.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I always speak with founders about their superpowers. What do they perceive as their superpower? What makes them confident that they can win the game? When you speak with a founder, speak with an individual for a good hour, you've got a fairly good perspective of what you think is their superpower. And it's fascinating to listen to the way they perceive themselves.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And I found out that some of the best founders are completely unaware to their superpowers. They are so natural in that they don't mean to use them. They are just so great at that. And a superpower can be anything. A superpower can be simply the type of person that people are dying to be their friend. You don't notice that. You think that that's a gift everyone has.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
You don't realize that this is your gift and that what paved you the way to be successful. In many cases, the superpower they claim they have is not necessarily the real superpower they have, but it shows you the way they view their weaknesses. Because the superpower they are aware of, they pay attention to, they had to develop it. And they had to develop it in compensation for something else.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So that tells you a lot about the person ahead of you.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
First of all, congratulations. You're a fast learner. That's great. Few things, but I would say, let's take self-confidence. It's one answer I would give. I'm sure this is something I've developed over time. I wasn't natural in that. It took time. And it was as compensation to a very insecure child that grew up in a small town
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
in Israel that didn't feel really appreciated for his talents and didn't feel that he's part of something bigger. And I think only when I was 13, for my bar mitzvah, I got a Commodore 64 computer. That opened up a whole new world for me. I started to get to know people with the same mindset.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Speaking about the 80s, I hopped on a bus and went to computer geeks gatherings in Tel Aviv when I was 14 or 15. And I think that only when I joined the Israeli NSA when I was 18, I really found out that I'm part of something bigger. I felt that I belong to that group of people. So it took time to develop that self-confidence.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Beforehand, there was always a gap between the way I felt about myself and the type of feedback I got from the people around me.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
My endless hunger. I'm never happy. I'm never satisfied with whatever I achieve. I always look at the next step. I finish climbing on one peak of the mountain. I immediately look beyond that mountain and look for the next peak to climb. It's very daunting because I tell myself it would be nicer if I could just take a rest and enjoy the view from the peak of the mountain I just climbed.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And I find very little satisfaction in that.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Making impact on people that I really care about. The founders I partner with are people that I really care about. My partners at CyberStarts, Leo, Emily, Hila, Adam, are people that I care about. Trying to leverage the past 35 years of being in the different sides of cybersecurity, going through so many different experiences to really make impact on their life.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
WIS in many ways is the front window type of use case for the cyber starts recipe for building an important company. And for me, the WIS story really holds many of the key ingredients for building an important cybersecurity company. I'll talk about a few elements. I hope that I'll do that in the right order.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
But most importantly, I think it's picking a really important pain point and getting the perfect product market fit. If you look at Wiz, the four founders, Asaf, Ami, Roy, Non, I think that the Wiz journey started eight years ago. Before founding Wiz in 2012, there was just a bunch of young guys, 27, 28 years old, straight out of the army.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Asaf had spent maybe a year with McKinsey, but really inexperienced team. And they started Adelon. a cloud security company, and that journey was quite short.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
In three years, they sold the business to Microsoft, joined Microsoft in 2015, and spent five years at Microsoft building the Microsoft cloud security business, brought it to a decent size of a billion dollars in revenue, and then they left Microsoft in 2020. And at that point in time, they were the most experienced team, in my view, worldwide in running a cloud security business.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And they started a company, which wasn't called Wiz, it was called Beyond Networks. And they had a very, very different idea. They thought to go and secure satellite offices with secure one access, et cetera, you know, some sort of... a business that never took off.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And at Beyond Networks, we looked at the customer feedback and it was an important problem for customers, but it didn't have a very important ingredient, which is it was important, it wasn't urgent.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And at the early stage, as much as you like to go after large market size and important pain point, the most important thing in my mind is to go after an urgent pain point that generates sense of urgency. And the sense of urgency is almost everything you need as a small venture, because that means that things would happen fast for you. You get to more customer engagements. You learn faster.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
You improve faster. You'll be able to build your revenue faster. And we didn't have that with the secure one access idea. And the Wizz team was smart enough to really pivot into a space they knew very well, which is cloud security. And we named the company Wizz.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And we ran our Sunrise program, which is all focused on getting feedback, making sure we understand the pain point, building the right solution that mere mortals can use. And three months later, they had a product, which would generate a sense of urgency. They spoke with customers, and those potential customers, prospects, wanted to bring them in.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And then I learned a very important lesson about the four customer profiles. When you sell a product, you're going to face four personas. The person that has the pain point, that has the problem. The person who has the budget to pay for a solution to solve that. The person that has the authority to decide on the product or solution.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And the fourth person is the person that would actually use the product. Now, as a startup, if those four personas map into a single person in real life, that's a mega hit. And that was the case of Wiz.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
If those four personas are mapped into four real people, there's one real person that has the problem, one real person that has the budget, one real person that has the authority, and a fourth person that actually used the product, don't do that. go and pivot. And if you map into two people, that would be a very nice company. If you're mapped to three people, that's a borderline.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
You may or may not like to pursue that. So for Wiz, it was a single person. It was the CISO. The CISO has the problem that the CISO, the chief information security officer, had the authority to decide on a cloud security solution. They obviously had the budget. And most importantly, they had the AWS credentials. that enabled them to really deploy the product.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So Wiz was able to do something very unique just because all those four personas mapped into one real life person and Wiz built a really cool technology. They managed to build a product that during the first call with a prospect, they could ask for the AWS credentials and within the call show them real value for their own organization, not in a demo environment.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And that really accelerated things for Wiz. And in three months, we faced one major dilemma. We could go for a low entry point price product to get a lot of logos and build with from the ground up, bottom up, or what people in Silicon Valley call PLG, product-led growth, or go after very large deals, enterprise deals to begin with, and grow the ARR top line.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Unlike the common wisdom within Silicon Valley, we decided to go for the large deals, scrap PLG, and go for real enterprise deals to begin with. We thought that by growing our top-line ARR, we would be better off. We would have real commitment by highly sophisticated customers. We would attract attention from outside investors. We would attract attention from top go-to-market talent.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And that would enable us to build a significant business. And while we spent the first 12 months building a product, the next four quarters were quite unusual. The company closed a million dollars in ARR in the first quarter of selling the software. $2 million, I think $8 million, and then $25 million in the fourth quarter.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It was an incredible company from the moment we actually launched our go-to-market for those three reasons. Focus on the urgent, not the important. Build a product that has a terrific product market fit for one person, one real person that owns the budget, the authority, and the ability to use the product. And we went and sold that to large organizations at a high price point.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
That actually was an old lesson I learned at Sequoia many years ago, that the expensive deals, the pricey companies are pricier from day one. They're always expensive. They're expensive at the seed round, they're expensive at the A round, they're expensive at the B round. The worst reason for a venture capitalist to pass on an opportunity is for price, because it's part of those companies' DNA.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Pick a company. All of those companies were expensive. Airbnb was expensive. Instagram was expensive. So if you're going to pass on an opportunity just because of price, you're going to pass on all the good companies.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Yes, Wiz was super expensive to begin with and attracted a lot of attention and became the fastest unicorn, the fastest company to go to $100 million, the fastest company to get to $500 million. And this year, when we get to a billion-dollar ARR, it's probably going to be the fastest SaaS company to get to a billion-dollar ARR. But that's part of the DNA. It's a fast company.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Watching that just convinced me that as an investor, a high price company is actually a good thing, not a bad thing, if justified.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The productivity at Wiz, if you look, was second to none. And when I looked at the number of engineers relative to the number of products and the number of capabilities we delivered annually. It was amazing. And when I look at the way we source engineers, there's always a debate. How do you pick the best engineers? And who are the best engineers for your business?
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And I discussed that with Roy Resnick, the VP of R&D of Waze, one of the co-founders, one of the four co-founders. And he had a super special way to source engineers. He would not just source smart engineers who has been in good companies beforehand, terrific education, et cetera. He would source people that their hobby is writing code.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
He would source people that on a weekend, assuming they are married and have kids, if they have a couple of hours of quiet time, they would not go reading or watching a Netflix series or listen to music. They would go and write code. Those are the people you like to hire. When you have 100 of these guys, it's like having 300 or 400 terrific engineers.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Because you know the rule that a great software developer is probably 10 times better than a good software developer. But having great software developers, that their hobby, their sole hobby, is writing code, that's a force multiplier. And I think we've realized that and capitalized on that. Is the outcome satisfying? I think I told you as part of the interview that I'm never satisfied, so...
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The answer is no. And I know that you're going to laugh and say, okay, I really feel that. But again, it's hard to live life twice. I wish I could. I would A, B test that decision again. But I think it's setting the bar super high to get from zero to $32 billion valuation within five years. I didn't check history books, but I guess that's pretty good.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
But I can think about a few other companies that has the potential, at least, to break that record. I dare to predict, again, assuming this transaction go through and get approved, et cetera, and that's the real final outcome. My guess that within 10 years, somebody would break that record.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
because you have all the ingredients. You've got the market size, you've got the evolving pain point, fast moving landscape, and a lot of talent, a lot of experienced talent, not just on the engineering side, but also on the business side. And I think that you have some experienced investors as well. So I think that you've got the ingredients. Now, luck should be in the mix as well.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And therefore, I think that within the next decade, we would see that record getting achieved and broken by a new player.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Yeah. Before starting CyberStarts, I lost my daughter, my 19-year-old daughter, in a terrible tragedy. And the world just closed for me. And it was very easy to stop everything and focus on the endless pain I felt. I managed to find the power and the strength to keep on going, build CyberStarts, and focus on building that organization and legacy.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And that really helped me to continue to live with the pain, but continue to live.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I think it's very, very difficult to give advice to. Hopefully nobody has to deal with that tragedy. It's really the most painful thing that you can go through. For myself, I did that instinctively. I didn't spend time to think about it. I didn't make a decision. I just did it.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
In a way, I managed to live with terrible emotions that previously I wouldn't imagine I can contain them and live with them. And over time, I taught myself to live with the pain, not fight the pain, just wait for the pain to ease. And I think that working with younger people on innovation, on solving real-world problems, on building solutions, that's what kept me younger and healthier.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I really think that there's many ways to become a terrific investor. I don't think there's one canonical way to get there. By the way, it's not enough just to be first. You also need to be right. That's the difference between an investor and a terrific investor, being right. But again, there are many ways to hell, but there's also more than one way to heaven.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
My recommendation is to really find your passion and do something that's not just profit generation or work. Do something that's a life project for you. When I look at cybersecurity, cybersecurity is not an investment area. It's not an area of interest for me. It's a life project. It's really important for me.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And I think that's the best thing you can feel about anything you do, that it's super, super important for you. You really care about it.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
It's not the way I think about cybersecurity future. I don't keep a category of domains, etc. It's a common misconception to think about cybersecurity as a market. Stand alone, there's no cybersecurity market. Cybersecurity is always a derivative of something else. a new technology or a new business. So if cloud is new, you need cloud security.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And if autonomous vehicles are new, you need autonomous vehicle security. Take, for instance, our conversation about AI. AI, for short, redefines cybersecurity. It already does it, but you couldn't predict it. So an investor that focuses on cybersecurity early stage investment, I'm not concerned about figuring out the best, the most important things or opportunities or domain in cybersecurity.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I'm confident they will introduce themselves. The same as cloud introduced itself, IoT security introduced itself, mobile security introduced itself, AI security introduced itself. I'm focused on picking the right talent, picking the right athletes, partnering with them, and making sure that you use the right system.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
See our conversation around Sunrise to really build solutions that real customers, real users would love. If we do that, everything else would fix itself.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The kindest thing that someone has done for me is a couple of years ago, my son told me that he spent a lot of time thinking about it and he realized that I'm his best friend. For me, that was probably the best thing anyone could tell me. It's not just about being a dad. It's the ability to create this level of trust and emotional connection that makes someone feel that you are his best friend.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And when it comes from your son, that's the kindest thing you can hear from anyone.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Cybersecurity for over 35 years, not happy to admit it, but that's reality. So I believe I do have a perspective on it. We live in days where it's actually the perfect storm in cybersecurity for various reasons. And when I look back at the days I founded CyberStarts, short of seven years in 2018, it wasn't the case. In 2018, cybersecurity was considered a boring portion of IT.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I think that what we see today is that there's a global powerhouse conflict that drives major forces into cybersecurity. It's the Ukrainian conflict. The Gazan conflict, it's all over the world. Offensive cybersecurity became a little weapon or even strategic weapon for state and powerhouses involved in those conflicts.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So that's one element that's making the cybersecurity threat vector so real, so dangerous, so available. And there's a constant drift from state-level cybersecurity weapons to criminal organization and then just creep kiddies. So we live in a very dangerous world, way more dangerous than it was just a few years ago. So that's one. The second element is technology.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I think that we've seen the iPhone moment for AI in 2023 or maybe even 2024. AI is not going to improve cybersecurity. It's going to redefine it. The same technology, the same LLMs, the same AI agents that you'd use to predict attacks and prevent them would be used against you to deliver attacks. A scale and level of sophistication we haven't seen before.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And the methods that we developed maybe for the past 80 years starting in World War II would be useless because the speed, scale, and sophistication of those attacks would be something that we haven't seen before. The world is a way more dangerous place today.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Think about modern warfare and the use of technology. It started with better analysis, better decision-making process. Then it moves to human augmentation. Think about the introduction of the first tanks in the First World War or the introduction of the Kalachnikov. It made humans more lethal. But with AI, there are additional steps. It's the workflow automation.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And then the final step where AI takes control. And if you think about a modern warfare, you think about LLMs that quickly put together attack plans that you didn't practice for, you didn't plan for, you don't have a B plan and a C plan for. They're already using AI agents to take control and launch those attacks. On the different side, that means that human augmentation would be an improvement.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
For time being, it might be enough, but it won't be a great solution for the long term. For the long term, you'd have to use LLMs to predict attack vectors in the very same way and give AI agents the control so that you have a chance to respond to those attacks in a timely manner. That's the future we are going to. There's no question about it.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
If you've been a fan of the Arnold Schwarzenegger Terminator movies, that's been a science fiction future.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The best offensive tactics are always ROI driven. How do I apply the highest damage to you in the smallest effort, lowest cost, fastest way? And what damage is always a contextual question. Depends who you are. But we've seen examples of so many different ways to inflict pain on you on a target.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And some of those attacks had very, very simple measures that you use, but the outcome was unbelievable. Could you give an example? If you like to take off a country and put it on its knees, that takes, using conventional methods, huge amount of resources, times, and coordinated efforts by a lot of people. If you do that through cybersecurity,
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
You can use very simple ways like taking down name servers for their power stations, and you leave that country without power for a few days. It's not a highly sophisticated attack. You don't have to have an army of people doing that. And it can happen to any country any day.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Now, think about an AI agent that's able to produce thousands of scenarios like that and execute all of them simultaneously. That's the technology today. This is not the future thing.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The deduction model would always be as good as the data provided. Take the analogy in the drugs development industry. If you provide enough information about... a certain disease. You build an LLM that can take that patient data, that can take a lot of research and offer recipes for drugs that can, for instance, heal diseases that are considered unhealable. Let's say Alzheimer's.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
You can use the same LLM and ask for recipes for drugs that can kill people. It's the same system. It's the same method. It's the same software. Now, think about LLM that's fed on data around the software infrastructure of a bank and an AI agent that you use to ask questions like, what are the potential breaches in my infrastructure and how should I protect myself? It's a very useful agent.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
The same agent you can ask directly or trick to answer the question, how would an attacker breach the defenses of that bank and take that bank offline? The same technologies that we use for the defense are the technology that would be used on the offense. You've seen that even if you put a lot of guardrails into the model, there are many ways to bypass those guardrails.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And that's when AI is in a walled garden. Now you have open source models, and DeepSeek is just one example of it, where AI is not walled garden anymore. It's in the wild, and anyone can download the model and modify the model.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
AI would redefine cybersecurity. It would replace the old ways cybersecurity solutions were architected. The old systems of building rule-based systems and behavior-based systems. So the good guys can fix misconfigurations or patch buggy software systems. Those days are gone.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And founders would have to create cybersecurity companies that are AI-first and AI-native just to have a chance to build lasting, important cybersecurity companies.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And that's the reason you see existing players, major players, like our own portfolio companies, you see the level of effort that a major cybersecurity platform like Wiz or Sayera or Island, the level of effort they put in AI, understanding and learning AI and applying AI into their platform, that's not an additive capability to the bot, that's
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
re-architecting the products to make sure they are useful and effective when the attacker is not human and is not just human augmented.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
A lot of what happened in that fund relates to a lot of learnings and mistakes I've made earlier in life.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
In 2018, I just exited one of the best VCs in the world, Sequoia Capital, amazing team, spent a decade as a general partner. And beforehand, I've been a founder and CEO of two software companies. And my conclusion back in 2018 was that the venture model is completely broken. It's broken in so many ways. It's broken for investors and it's broken for the entrepreneurs.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Investors have spent endless amount of time asking about markets and products and technologies, which founders at a very early stage, at the seed stage, clearly they don't have the right answer. They don't have an idea. And whatever they tell the investor, Anyway, it would change within a few weeks and then change again and change again and change again.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And everyone are simply playing a game and dancing the dance, but they're just paying tax to the system. It has no value, especially it has no value for the recipient of the solution because they are not even involved in that dialogue.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
So when I founded CyberStarts, I made one very important commitment to completely avoid questioning the market, the technology, the product, the competitive advantage, and focus on one thing only, which is the person ahead of me. Focus on the talent. The other thesis I had is hunting for adversities.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
I'm looking for people who are not straight lines, who didn't have a perfect start for their life and managed to overcome it and become successful, although they didn't have a perfect starting point for their life. I had a very stumbled beginning for CyberStart, started with a $50 million fund, super small.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And the first fund I was investing alone out of my office was a, still is today, a shipping container I converted into an office situated in my backyard. And I invested in nine teams. And I was the lead investor in all those teams, made rebates in people without ideas. And many people thought that's pretty crazy, a grown-up. Writing large checks to people without idea, that seems pretty odd.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And then three years later, in 2021, I realized that the portfolio of those nine teams is valued over $25 billion, converted the $50 million into close to $2 billion, and more importantly, had a terrific set of companies. Companies like Wiz, EdekaCon, the leader in cloud security, amazing team, we can talk about them a lot.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
Companies like Island Security that invented the enterprise browser space and today is a company that valued at around multi-billion dollars. Companies like Fireblocks, which is the largest blockchain custody service for enterprises, which valued at $8 billion.
Invest Like the Best with Patrick O'Shaughnessy
Gili Raanan - Cybersecurity Investment Playbook - [Invest Like the Best, EP416]
And as you know, in our business, if you invest early on in terrific companies, if you invest early on in DoorDash or Airbnb, you'll do disgustingly well.