What’s next for cybersecurity, according to Index Ventures’ Shardul Shah

As concern over AI safety and rogue agents continue to make headlines, it’s no surprise that cybersecurity stocks are rising, or that investors are pouring massive amounts of capital into startups trying to build the next generation of security for an AI-native world. We’re even seeing companies like Instinct and Simile bring in nine-figure checks and valuations that wouldn't have made sense a few years ago. With a front row seat to it all is Shardul Shah, a partner at Index Ventures who’s spent nearly two decades investing in cybersecurity and enterprise software — including six consecutive rounds in cloud security startup Wiz, which Google acquired for $32 billion earlier this year in one of its largest acquisitions ever. On this episode of TechCrunch's Equity podcast, Shah joins Rebecca Bellan to break down why he thinks periodic, human-in-the-loop security can’t keep up anymore, and why Index continues investing in AI-native security companies at stages that once required much more proof. Listen to the full episode to hear more about: Why Shah thinks cyber insurance should be most companies’ first move in managing AI-era risk What happens when a single attacker can deploy a 10,000-agent ransomware swarm, and why that could force cybersecurity to become more machine-to-machine How Wiz’s founders paved the way for a new generation of startups, including Frame and Enigma Shah’s take on “pacing the frontier,” and why he thinks even a slowdown in model capability wouldn’t cool off cybersecurity investment Subscribe to Equity on YouTube, Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. Chapters: 00:00 Intro 02:02 Why AI is creating a new cybersecurity category 05:16 The cyber insurance layer most companies overlook 09:15 Why Index is betting on AI-native security platforms 12:40 Will Wiz become a talent factory for new startups? 14:46 What actually makes a founder worth betting on 16:11 The hard part of knowing when to double down 18:53 Why Shardul says he’s not a visionary investor 21:16 How AI could reshape the entire security stack 24:18 What makes an AI security startup defensible 25:14 Why he doesn’t want to find “the next Wiz” 26:48 Why investors are writing huge checks so early 29:39 What happens to AI valuations if the frontier gets paced 31:01 Outro Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Ha?

  This episode of Equity is brought to you by Schneider Electric. Schneider Electric, advancing energy tech.

• 0:05Rebecca Bellan?

  Hello and welcome back to Equity Tech Crunch's flagship podcast about the business of startups. I'm Rebecca Bollan and this is the episode where we bring on industry experts to help us explore a trend in the tech world and dive deep. Concern over AI safety and rogue agents has sent cyber stocks rising in recent weeks and led to a surge of investment in new startups promising to solve novel cybersecurity issues. We're seeing nine-figure checks and valuations that wouldn't have made sense a few years ago. Nobody understands this better than Shadul Shah of Index Ventures. Shadul was an early investor in Wiz who led the cloud security startup through its monster $32 billion Google acquisition. And he's got an eye towards what new cyber categories will emerge in the near future.

• 0:51Rebecca Bellan?

  Shardul, welcome back to the show.

• 0:52Speaker 02

  Thank you, Rebecca. Appreciate you having me.

• 0:54Rebecca Bellan?

  Yeah, nice to see you again so soon. We ran into each other at a dinner you were holding. Index Ventures was holding a couple of days ago, or I guess at the time of this recording,

• 1:05Rebecca Bellan?

  last week. So I'm really excited to chat to you about some of the things you've invested in and what your thoughts are on where AI is going and how it's affecting the world of cybersecurity. So just to back up a little bit, you have been at Index Ventures for a while now. You joined in 2008?

• 1:24Speaker 02

  Yeah, it's been almost 20 years. And I must say, Rebecca, you're one of the best dinner guests we've hosted. You're very engaged, so I encourage others to invite you too.

• 1:33Rebecca Bellan?

  Yeah, I have a tendency for waxing a little philosophical, so I'm glad everyone humored me.

• 1:40Speaker 02

  It was a fun discussion.

• 1:41Rebecca Bellan?

  Yeah, I think it was a good discussion and really nice food, so thanks for that. So you've covered a broad range of things, right? Cybersecurity, AI, enterprise software, infrastructure. You also came on Equity, if our listeners recall your voice or your face, back in March, when Google bought Wiz for $32 billion. So we've got a lot to catch up on since then. I would love to hear a little bit about some of the other cyber bets that you've made recently.

• 2:08Speaker 02

  Yeah, and so much has changed since we last met. I think if you sum up the market caps of public companies, it's close to a trillion dollars of valuation exposed to cyber companies. And I think that speaks to the permanent resilient need for security. It's only growing as there's more technology in the world. So I think it's really relevant to think about not cyber as a cycle, but if AI represents a new category of security.

• 2:40Rebecca Bellan?

  I mean, there is kind of a cycle we're going through at the same time. I mean, maybe that's not the way you want to think about it, but you know, we had recently Dari Amade's letter about pacing the frontier. A lot of researchers are quitting these firms, saying that they're concerned about, you know, mostly extinction events. But there's also the, you know, a lot of that is or can be manifested, I think, through cyber attacks, whether that's humans using AI to perform cyber attacks or AI that kind of goes rogue and loses the plot. So it's like AI is simultaneously creating this cybersecurity crisis and a cyber investment boom at the same time. And I mean, you have a good eye into Wiz.

• 3:21Rebecca Bellan?

  How has their day-to-day, if you're aware, changed over the last few months?

• 3:29Speaker 02

  Yeah, and just before getting into Wiz, I think one of the things I learned about you at dinner was that you have a good eye for philosophy. So I'm curious, have you watched like Dr. Strangelove?

• 3:42Rebecca Bellan?

  No, I haven't.

• 3:43Speaker 02

  So Stanley Kubrick, like 1946, had this incredible satire, right? It's a kind of psychotic general who has the ability effectively to end the world. And my call is for Christopher Nolan to remake Dr. Strangelove because we're back. And satire aside, I think you pointed it out that on one hand, there's always a security need to protect ourselves from ourselves. And second, there is a security need that's born from adversaries that have an incentive. And so I do think it's appropriate to think about Wiz, in so much if we bring it not to 1946 to this decade.

• 4:29Speaker 02

  Ami, the co-founder and CTO of Wiz, talked to me about this from the beginning of the business, which is how do we manage both of those needs for security? And so I think it's really prevalent and I think it's the beginning of how this AI security category is actually going to be reshaped.

• 4:45Rebecca Bellan?

  Okay, I gotta, I gotta check out some Dr. Strangelove then. I mean, it's like a word, you hear that phrase or I guess the movie title before, but I've never actually looked into it.

• 4:55Speaker 02

  It's worth a watch. Maybe we'll have like a film event. Yeah.

• 4:58Rebecca Bellan?

  Yeah, that'd be cool. So, okay, so it's bringing about a new category of cyber. You've invested, you or at least Index has invested in companies like Seven AI, right? They do AI security agents. There's Frame. This is AI-enabled human risk and security training. Stop me if I'm wrong about any of these. New Core, which gives identity for agents, Apex. How do these embody this shift that we're seeing?

• 5:21Speaker 02

  Yeah, so take a big step back. You're a decision maker at an organization and you're thinking about managing risk in your business. I think the first thing to actually do, and if any listener is on the board of any company of any size, my advice would be to try to offload some risk. And the way to do that is through cyber insurance. And so I am on the board of a company called Coalition, but I'm not trying to talk my book because if you make a considered purchase of cyber insurance, you have to go through a broker and that broker is going to help you choose the best solution that fits for your organization. But I think that's the first thing to do. The second is to think about people, process and technology.

• 6:04Speaker 02

  And so if you get to technology, you start to think through choices between incumbent vendors and startups. Now, again, as a mere venture capitalist, I'm very biased around startups. And the way I think about most incumbents is they're selling parachutes that are made of patches with kind of sketchy stitches. So it might make you feel good to have it on your back when you jump out of a plane. But gosh, like your life is in a little bit of danger. However, it's not so easy because again, if you're a decision maker, you're getting pelted with pitches from a thousand-plus security vendors.

• 6:44Speaker 02

  And it's so difficult to appreciate the distinction between snake oil and a real solution.

• 6:52Rebecca Bellan?

  Yeah.

• 6:52Speaker 02

  And so it's really challenging to actually think through risk management. But I think it starts with insurance and then it actually begins with people and process. I'm happy to talk about any of the companies that you alluded to or others, but I think that's a really important step back framework.

• 7:10Rebecca Bellan?

  I didn't even know cyber insurance was a thing. Like, I mean, I guess it doesn't surprise me that it is, but would you say there's like a whole industry based around this kind of need?

• 7:20Speaker 02

  You know, I, I love my mom, but I probably really didn't think about sunscreen until I was an adult. And so, you know, there are like basics that are really healthy choices to make that some of us don't encounter because of whatever circumstances that were brought in. And that's how I think about cyber insurance. Eventually, it may become compulsory or even mandatory. But ahead of that, I think it's worthwhile organizations thinking about the prudent choice of just offloading a little bit of risk through cyber insurance.

• 7:56Rebecca Bellan?

  And which companies are doing this?

• 7:58Speaker 02

  Coalition, which also recently bought like Allianz's cyber insurance business. So you have massive companies in the world like Beasley and others that are providing insurance to all sizes, all industries, all geographies.

• 8:14Rebecca Bellan?

  Yeah, I mean, this just furthers the point that there is a lot in, like AI is really creating the next cyber boom, right? And it's taking some, some interesting turns, right? We're seeing cyber stocks start to surge amid, you know, concern around advanced AI. CrowdStrike and Palo Alto Networks were, at the time of this recording, doing pretty well, but who knows what the, what the market sentiment on the day that this gets published will be. So Index, just to take a step back, Index raised recently, what was it, $2 billion across three rounds? So I think you've got 3.5 total capital going at the moment?

• 8:52Speaker 02

  Yeah, that's about right.

• 8:53Rebecca Bellan?

  And that's following Wiz's exit, which you guys did great with. You had like, what was it, like a 12% stake worth about 3.8 billion if I, if my homework is correct at the time of the sale?

• 9:03Speaker 02

  You're close, a little shy, but that's okay.

• 9:05Rebecca Bellan?

  A little shy, okay. Don't, yeah, don't be, don't be too modest.

• 9:11Rebecca Bellan?

  So how much, when you're, when you're thinking about like allocating funds, like how much in the next few months are you trying to find new solutions for cyber? And then, yeah.

• 9:21Speaker 02

  Yeah, I'll try to take the question in two parts. First, when it comes to cyber, we do try to invest in platforms. Ultimately, we think enterprises want to partner with platforms, not point solutions. And these are businesses that have multiple use cases for multiple people and multiple product areas over time. 7AI is a great example of this, and that's a company that's aiming to be the foundational security company. And they build as an AI-native business from the get-go. Again, that's really important and different from incumbents. And it's analogous and it rhymes with Wiz, how they started from the get-go as a platform

• 10:04Speaker 02

  with a point of view around cloud, although that category had existed for a decade. So I do think startups have a natural advantage in how they build themselves. Second, to your point, there are existing categories like identity, where in the past, organizations would think about managing human identities. And today, they manage both human and agent identities. And so our belief is there's a new platform that's required that has new primitives to manage agentic identities, which operate very differently than human identities. And thus, New Core is born. Or alternatively, we believe entity risk, human and non-human entity risk is different today than in the past.

• 10:49Speaker 02

  And so Tal Shlomo, who came out of Wiz and created Frame, is really relevant for this new age. That said, it might sound like we're really intentional and thoughtful and thematic about how we invest in security. But the truth is, as Index, we invest almost as a collection of artists, right? We have the seed fund, a venture fund, a growth fund, and these are the three families that you allude to that add up to $3.5 billion. But it's the same group of individuals who are investing across the three. And our objective is to be the first investor in category-defining companies. And that's the starting point.

• 11:33Speaker 02

  How we get there, the craft of investing, whether it's thematic or a view on a business model, or most often a view on a founder, is very personal to each investor at Index. And so, we don't step into a new fund with a view on how are we going to allocate capital by sector. Right? It's more organic and a little bit more chaotic.

• 11:58Rebecca Bellan?

  It's interesting. Okay, so it's not necess-- it's more organic, it's based on the founder. You mentioned Frame, which the founder came from Wiz. I wonder if you're, because of Wiz, becoming such a powerhouse in this space, you know, that will lead to others kind of branching off from that company and starting their own startups. You'll almost immediately have a connection with those founders, and you'll be able to do your due diligence and know if they're, you know, worth investing in, if they're interesting founders, what-- you know their pedigree already. I guess what I'm asking is, do you imagine that Wiz will become sort of a, like a PayPal Palantir,

• 12:37Rebecca Bellan?

  if you will, in terms of being one of those category-defining companies that spawn others within the category?

• 12:45Speaker 02

  Yeah, well, the founders of Wiz, their first business, where I had the opportunity to serve on the board about a decade ago, Audelum, actually had like companies that came out of that talent pool to start new businesses. Armus is one terrific example of a company that's enjoyed great success after the team left Audelum. Wiz is, to your point, somewhat similar, because Asaf, Ami, Yonon, Roy, the founders of Wiz, attract really ambitious entrepreneurial individuals, and they celebrate their growth and impact in the next leg of their career and journey. And to your point, we also invested in a business called Enigma.

• 13:25Speaker 02

  Jonathan Jacoby was a member of the Wiz team, and he's working on a robotics foundation model. When we invested in this business, we actually shook hands before the company was incorporated, frankly, before we knew what they were going to do. They probably had an idea, but I certainly didn't imagine myself as a robotics investor. And here we are. And so I do think Wiz is unusual in so much as there's so much density of entrepreneurial talent, that I do imagine that talent exploring new adventures. And even on the commercial side, I think it's amazing that Dolly Rajik, who ran go-to-market for Wiz, is now the CRO of OpenAI.

• 14:10Speaker 02

  And I think that was an absolute coup, because Dolly's really the best go-to-market leader on the planet. And so, you're absolutely right, Wiz attracted a real dense talent core.

• 14:23Anthony Ha?

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• 14:51Rebecca Bellan?

  I mean, just picking up on this thread a little bit, you're-- what is, like, you never thought that you would invest in robotics, but what is it about a founder? You kind of want to ask this to every investor, but they all roughly say the similar things, but I'm curious, maybe you'll say something interesting. What is it about a founder that draws you to them, that makes you think like, okay, I'm going to invest in you? Like, I'm going to not only invest, but I'm going to follow on. Like, before you even close this round, we're going to talk about the next one.

• 15:19Speaker 02

  Yeah, you know, you used a word that was pretty specific, and I wanted to disagree with. I think just because I know of someone, doesn't mean we connect. So actually, the first time I met Jonathan was over Zoom. And I told him, I don't make investment decisions over Zoom. It turned out, we had some health stuff in the family. Jonathan has got a really warm heart, and so he jumped on the next flight to see me in New York. And on Saturday, we spent the day together from 6:00 AM to 2:00 AM. What happened in like that sprint over the weekend? It's a little bit of that like je ne sais quoi, like, you can't put your finger on it. I think often investors label it as intuition, right? It's a, it is a sensation, it's a feeling.

• 16:04Speaker 02

  However, we do try to rationalize it, both to ourselves and to our, typically to our partnership, right, in order to exercise judgment. And I actually think that it's like, it's super interesting and dangerous to rationalize, because sometimes we're too smart and we talk ourselves out of really deep conviction. And so, I think rationalization for me is very useful to pressure test and feel my intuition, because I'm not always like in my body, I'm often in my head. But at the source of it, I think it is that, it's like a strong sense of intuition.

• 16:42Rebecca Bellan?

  Okay, so it's a gut feeling?

• 16:44Speaker 02

  I think so. The second part of what you said is a really difficult art, right? Which is, I think the question was, like, how do you choose when to double down?

• 16:52Rebecca Bellan?

  Yeah.

• 16:53Speaker 02

  And so, with Wiz, we did co-lead six consecutive rounds of investments, and that was, at the time, the largest investment in aggregate that Index had ever made. But we shouldn't confuse the outcome with those individual decisions, right? In the moment, I did feel fear. Like, it's really scary every two months to come back to your partnership and say, I actually know more and want to invest more. When your partner's like, what else could you possibly know? It's only been two months, and one month was like December. And so, it's actually really challenging to make that judgment call. And we've failed to make that judgment call in many circumstances,

• 17:35Speaker 02

  because we often underestimate the magnitude of the largest companies in the world.

• 17:41Rebecca Bellan?

  Yeah, and I'm sure, like, you know, there's been plenty of times where, you know, you make that bet, and it doesn't work out, and someone, you know, that you thought was a great winner ended up not being one.

• 17:51Speaker 02

  Yeah, and in venture, that happens more often than not.

• 17:54Rebecca Bellan?

  Right.

• 17:54Speaker 02

  And so there's a degree of either delusion, or masochism, or confidence, I don't know why.

• 17:59Rebecca Bellan?

  Right, how do you even trust your own intuition? If you get, you know, if the spaghetti falls off the wall, more often than not.

• 18:04Speaker 02

  Yeah, and I think you and I debated this at dinner, too, like optimism, skepticism, cynicism. You know, how do you apply a combination of optimism and skepticism to arrive at judgment without falling into the trap of cynicism? But how do you learn from mistakes you make in order to avoid making the same again? I think another, and this is a bit of a detour, but I think another mistake investors often make is to try to pattern match. I actually think there are no patterns, and pattern matching is a fallacy. And so, it again, almost creates a prerequisite to trust one's intuition.

• 18:42Rebecca Bellan?

  Interesting.

• 18:42Speaker 02

  I hope that was different from what other investors have told you.

• 18:45Rebecca Bellan?

  Yeah, it was definitely interesting. I'm thinking about it through the lens of like, if I'm a founder listening to us, I'm like, am I going to learn exactly how to get investment from Index Ventures? And it's like, well, you just, yeah, I think your intuition is probably telling you, I mean, you've been in the game long enough, right? So that's, you are seeing patterns, whether you recognize it or not, or whether you want to call it that or not. But there's clearly something you're seeing that's going to make you want to invest in someone. And so, yeah, I think just like time in the field will really give you, I mean, it's the same as news judgment in a way, right? It's like, well, how do I know when something's a story and when something's not? I mean, I might be wrong, but sometimes I write something, I think this is definitely a story, and no one's going to read it, but.

• 19:26Speaker 02

  I'm not sure. So first, I think most entrepreneurs may not want to work with me, and that's okay. Like, I'm not a visionary. Often entrepreneurs want to work with someone who has a shared belief on where the world is going to go. And that makes a lot of sense, because you don't want to kind of relitigate your set of beliefs. You don't want to constantly have friction with convincing someone of the future state in the world. And so you want alignment around shared vision. I'm not a visionary. And so, if entrepreneurs want a visionary, and I mean this with great respect, they should go talk to Vinod Khosla, who can see the future, right?

• 20:06Speaker 02

  I seek belief in people, because some of the best companies that I've invested in, they pivot. And for me, it's belief in a person, I don't fall in love with my own belief of the future state, that really matters in the business. That framework is not relevant to every entrepreneur in the world, but I'd be delighted for them to know, to disqualify and not spend, you know, spend their precious time trying to convince me of something that doesn't make sense for themselves.

• 20:33Rebecca Bellan?

  Yeah. Whether or not you believe in, you know, or think that you have like a strong vision of what you think the future is going to be, you know, you're placing bets every day, and we're in a world--

• 20:45Speaker 02

  Hopefully not.

• 20:46Rebecca Bellan?

  Not every day.

• 20:47Speaker 02

  Even in today's environment, that would be too fast.

• 20:49Rebecca Bellan?

  That would be too fast. Well, you're placing bets on a regular basis, and, you know, we're living in a world where the future is increasingly uncertain, right? And I think that's why, I think that's why you're seeing a lot of funding gravitate towards, you know, these cyber companies, right, that are trying to, I guess, give enterprises or individuals a little bit of hope that something will be okay, that like they're protected for the oncoming wave, right? We saw, you know, recently, 100-plus companies warned that AI-enabled attacks will soon become more widespread and more sophisticated. And, you know, we saw GPT-Astra crossing this critical cyber capability threshold, so it can autonomously find and exploit previously known vulnerabilities.

• 21:33Rebecca Bellan?

  So I think it's pretty clear, everyone's pretty clear on the fact that AI is changing cyber, and it's making it like a game of whack-a-mole. But what existing security categories do you think might be getting destroyed by AI?

• 21:49Speaker 02

  You know, I think we need to very quickly evolve to a world of continuous security.

• 22:00Speaker 02

  And so there have been categories that are periodic. An example of this is is security testing. Today, it's regulated for public companies to get periodically tested against security controls. And how it works is usually you get like an agency, you get a team from that agency that give you a report, and you may or may not take action on that report. But a board of directors will look at that report and ask you, why are you A, B, C, or D, or a number one through 10, and ask if you want more resources to improve your score, right? That world of discontinuous security does not exist going forward. So will external pen testing evolve? Absolutely.

• 22:45Speaker 02

  And there's a field of emerging companies that are oriented. That's that's like one idea that comes to mind. Second, I think that, to your point, the adversary landscape has evolved. So adversaries can consist of like nation states, of criminal syndicates, of individual hackers, right? And they have access to different technologies and different resources and infrastructure in order to launch attacks. Those attacks might be politically motivated. They might be economically motivated, right? So there's different people with different incentives that are part of this adversary landscape. What has happened because of the advancement of AI is more adversaries can launch more

• 23:30Speaker 02

  sophisticated attacks with less money, right? So I can soon imagine a single individual in a rogue state that launches a agent swarm of 10,000 to conduct ransomware attacks across the globe. That's pretty scary. So on the other side, the world needs to evolve to a machine-to-machine cyber war state. If a human is in the loop on the defense side, compute or cost will drive an overwhelming force. Therefore, any human in the loop oriented security business needs to evolve.

• 24:12Speaker 02

  And I think that's the core of the thesis behind 7AI. As well as, again, an emerging set of companies, there's a there's a new stack that will form. There might be security foundation models. There might be security defensive swarms. There may be new services organizations that can collect data in different ways or leave behind information in different ways in order to make the economics of an attack more costly for adversaries. And so I do think it's a super interesting question because there will be massive shifts in how defense operates.

• 24:43Rebecca Bellan?

  Yeah, definitely. Some new categories appearing for sure. What do you think will make an AI security startup defensible when the underlying models keep improving?

• 24:51Speaker 02

  Well, it starts with the people. Again, not to be cliche and simplistic, but it's a true belief. Like, it starts with an ambition, the ability to identify a team and motivate that team to, you know, go on this irrational journey to start a company, right? Most companies will not succeed. So it's completely irrational to start a business. It's actually irrational to join a company, and it's probably even more irrational to invest in it. But we're all in it together.

• 25:19Rebecca Bellan?

  Yeah, we're all mad here.

• 25:21Speaker 02

  So it starts, it starts with the people. I get attracted, if I try to use my rational brain and not just give you the je ne sais quoi, I think I'm attracted to individuals that can hold contradiction, right? And so how do you create a service that's easy to use but is extraordinarily sophisticated? Because ultimately, I think the best companies will build platforms.

• 25:44Rebecca Bellan?

  Yeah. Okay, so what does the next WIZ look like?

• 25:47Speaker 02

  I try not to compare companies to WIZ. I actually learned this lesson from Datadog. Datadog was, it is a wonderful business. I still serve on the board. But it made me a bit of a snob, and I'm worried on the back of, you know, the incredible journey that we experienced at WIZ, that I've become a snob again. And so I'm trying not-

• 26:10Rebecca Bellan?

  Like snob because you're like, I picked a winner.

• 26:12Speaker 02

  Well, no, it's not. I mean, I happen to be in the right place at the right time with an incredible group of people. It's not about myself. But confusing that with myself exactly would be would be problematic.

• 26:25Rebecca Bellan?

  I also wanted to switch gears a little bit and ask you, what really makes a good AI investment anymore, right? So Index invested in Instinct, which that was a $250 million Series B, I think. I'm just going to rattle some stuff off. That was at a $2.5 billion valuation for a very young company, a very young consumer AI agent company. Then there's Similes, $200 million Series B. Similes doing AI simulations, people for markets and societies. Enigma, you mentioned earlier, they had a $71 million seed round. That's a robotics company, seven AIs, $130 million Series A for cyber agents. So these are monster checks early in company formation, and that's just the ones that Index has invested in.

• 27:08Rebecca Bellan?

  We're very early in the whole AI race. You guys are putting crazy checks into companies at stages where investors used to need a lot more proof. What do you know that makes those prices rational?

• 27:21Speaker 02

  Yeah, well, let's take one as an example, and you know June at Similes. So maybe we can start there because you'll be able to ask more pointed questions. The first investment in in June was like, pretty classic. We had deep conviction in a team that had the moral authority to build in a category that we thought would be important. And then we learned, because we're really close to the business and we had more context than I think anyone else, that there was incredible market demand across geographies, across verticals from some of the largest companies in the world. And I hadn't seen that amount of market demand since the beginnings of WIZ.

• 28:04Speaker 02

  So that triggered our next investment. And then the market demand translated into business model traction, where they were able to close, not only close large contracts, but also renew, expand multiple contracts, and close even bigger contracts with larger companies in an incredibly short period of time. I was on stage earlier today, so yes, last week, based on the timing of this of this pod, but I was on stage with Prag at the primary event in New York. And I asked Prag this question of how does he think about the financing environment? Because he's he's raised from us, you know, multiple times, but also other terrific investors,

• 28:49Speaker 02

  including First Round Capital, Coastal Ventures, Kleiner Perkins, Sequoia, like, and he's got an incredible set of investors. And what he shared was, he wants to have every customer in the world, but he doesn't want to have every investor in the world. And he believes that, he actually agrees with me, that it's irrational to start a company. And what he looks for in investors is an irrational amount of belief.

• 29:17Rebecca Bellan?

  Sure.

• 29:18Speaker 02

  And it turns out, when you have an irrational amount of belief-

• 29:20Rebecca Bellan?

  You put forward irrationally sized checks?

• 29:24Speaker 02

  Exactly. And so that made me feel really good on stage.

• 29:29Rebecca Bellan?

  Okay, so basically, there, we are just all swept up in this low-key irrational hype, and that's just what it is. It is what it is.

• 29:36Speaker 02

  Well, I mean, University of Chicago is where I studied. Economics 101, it's perfectly rational for there to be irrational participants in a market.

• 29:45Rebecca Bellan?

  Yeah, okay, that's fair. Okay, last question for you. I'm sure we're all still talking about Dario's pacing the frontier essay. I'm curious, not that any investor that I have spoken to actually believes that the frontier will be paced, but let's say it is. Let's say it does get paced. Could that actually interrupt the assumption that everyone's basing pricing on, that models will just keep getting more capable, compute will keep scaling, and the demand will keep exploding?

• 30:12Speaker 02

  I think that the technological advancement in the last two years has definitely surprised me. However, the diffusion of that technology into industry, into the hands of consumers, is lagging. As a consequence, if your hypothesis is correct, and we are paced at the frontier, I still think there's a significant lag in the world actually having diffusion and acceptance of existing technologies and capabilities, which are pretty significant.

• 30:41Rebecca Bellan?

  Right, so you're saying that even if, you know, we paced, we slowed it down, we stopped development, the existing technology that that is out there today, it's so underutilized, and there's so much demand that we're not, we're not going to see, there will still be money flowing, build outs happening, people buying?

• 30:59Speaker 02

  Yeah, I think so. I think the outstanding question then would be, is there irrationality, you know, that leads to a set of people who whisper to another set of people that kicks off a bankroll, right? And again, this is a topic we talked about at dinner.

• 31:16Rebecca Bellan?

  Yes, well, you know, before we dig into that extremely anxiety-inducing topic, I will, I will say thank you for joining us on the show. It has been, as usual, a very interesting chat. Where can our listeners connect with you and your find your work online if they if they want to get to know you a little bit better?

• 31:34Speaker 02

  Oh, thank you. It's a, it's a pleasure. Next time, we won't start on anxiety, and I hope we don't end on it either.

• 31:39Rebecca Bellan?

  I think we probably will, but that's just, that's more of a me thing than a you thing.

• 31:44Speaker 02

  But if folks want to find me, LinkedIn is the best location. I do check it really frequently, and I'm pretty religious about accepting folks that are specific with questions and ideas.

• 31:55Rebecca Bellan?

  That's okay, specific with questions and ideas people, all right? Don't just say, let's talk. Well, start off, thank you so much for joining us on the show. To our listeners, you can find me also on LinkedIn and on Twitter, and you can find Equity on Twitter and threads at EquityPod. Talk to you next time.

• 32:11Rebecca Bellan?

  Equity is hosted by TechCrunch senior reporters and produced by Teresa Locan Solo with editing by Cal. Subscribe on YouTube or wherever you get your podcasts and find out what's next at techcrunch.com/events. Thanks so much for listening, and we'll talk to you next time.