Gili Raanan
speaker
558 appearances
2 recordings
2 series
first heard Mar 2025
last heard 28 Mar
Gili Raanan’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 1 in all, peaking in Mar 2026 with 1.
Appearances
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.
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.
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.
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.
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.
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.
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.
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.
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.
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?
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.
Those are many, many elements that are being evaluated, examined during the time of the sunrise.
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.
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.
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.
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.
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?
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.
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.
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.
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