20VC: The Venture Model is Broken | You Need to be Greedy and Selfish to Win Early Stage Investing | Why Margins Do Not Matter for Early-Stage Startups | The Growth Rate that is Required in a World of AI with Gili Raanan, Founder @ Cyberstarts

Gili Raanan is the Founder of Cyberstarts, one of the best performing venture funds of the last decade. He is famed for being the seed investor in Wiz, Islands and Cyera, leading to multiple 10x+ funds. He has the only remaining monopoly in venture; cyber security in Israel. If it is good, Gili sees it, it is that simple. AGENDA: 00:00 — Does the Venture Business Even Work Anymore? 05:58 — The Insane Rise of $150M Seed Rounds! 08:58 — Will Mega Funds Ever Actually Return Venture Economics? 11:13 — How Do You Value Companies Growing at Impossible Speeds? 14:50 — The Truth About Growth: Why Most Companies Eventually Plateau 18:50 — Do Margins Still Matter in the Age of AI? 24:32 — How To Make Mega Money in the World of Secondaries 28:11 — What Are Core Misalignments Between GPs and LPs That No One Discusses? 37:57 — Quick Fire: Best Investment, Most Memorable Founder, Investing Icon

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

• 0:00Speaker 00

  No, I don't think it's going to work. I I think it's going to end up with some serious catastrophe for many of the players. The market is not balanced. A lot of that cash that's flowing into the market would be wasted. Venture is is a game. You know, we know very little. When we get into into investments, we need to be selfish and we need to be greedy. Those are good traits for an early-stage investor. As an investor, you look at yourself and say, okay, I really fucked up. I'm not in a business of babysitting founders.

• 0:33Harry Stebbings?

  This is 20 VC with me, Harry Stebbings, and what a guest we have in the hot seat for you today. Gilly Raanan, founder of CyberStos and one of the most successful seed investors ever. In his nineteen-company portfolio of Fund One, check this out. He invested in a Decacorn, Wiz, seven unicorns, and he had three other companies acquired. That is an insane hit rate. Prior to CyberStos, Gilly spent over fifteen years as a general partner at Sequoia, where he invested in some of the world's best cybersecurity companies. But before we dive into the show today, you know what's wild? It's 2026, and so many product teams are still flying blind, buried in spreadsheets,

• 1:13Harry Stebbings?

  chasing feedback across ten different tools, trying to figure out what actually will move the needle. I've spoken with hundreds of product leaders, and the best teams all do one thing differently. They build a system to capture ideas, validate them with real data, and focus their roadmap on the right things. That's why product teams at Canva, Deliveroo, Toast, Decathlon use Jira Product Discovery. It pulls ideas and feedback into one place with built-in tools to prioritize what will actually have the biggest impact. That's when a roadmap stops being an endless list of ideas and becomes a plan people actually believe in. Join more than twenty thousand teams already using Jira Product Discovery. Head to atlassian.com/harry. Oh, I like it. I get my name in there.

• 1:56Harry Stebbings?

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• 2:40Harry Stebbings?

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• 3:24Harry Stebbings?

  into durable, product-led growth. Everyone's shipping faster than ever. Cursor, Claude Code, Codex. AI is making code and writing code faster than ever. But here's the problem. Speed means nothing if nobody uses what you ship. That's where Reforg comes in. Reforg is building a product discovery engine that sits upstream of your coding agents. Not another prototyping tool, research repo, or AI interviewer, but a product that will ingest your customer data, generate variations of product solutions, validate the solutions before code is written, and hand off winning directions to your team. Reforg kills product debt before it starts, because every unused feature you ship

• 4:08Harry Stebbings?

  isn't just wasted engineering time. It's a maintenance burden, complexity tax, and surface area that you cannot shrink. Used by product teams at companies like Toast, Vimeo, Klaviyo, and many more. Reforg helps teams ship more features than actually get used. Try Reforg at reforg.com/build and use the code 20vc, that's 20vc, for one month free of Pro. You have now arrived at your destination.

• 4:35Harry Stebbings?

  Gilly, we have been friends for a while. We did a show remote and it is just so much better in person. And so I've been so looking forward to this. I also love shows. You've got to remember why I do this show. I do this show because I love to learn from people who are so much wiser than me. And it's like the greatest joy to have you here with me. So thank you for doing this, dude.

• 4:53Speaker 00

  Happy to join. And if I knew that you are coming with shorts to the interview, I would come, I would show up earlier.

• 5:01Harry Stebbings?

  Dude, do you not realize that we have the table so I can hide them? I look professional from above.

• 5:05Speaker 00

  Oh, I didn't mean to disclose any state secrets, but...

• 5:09Harry Stebbings?

  It's fine, it's fine. We know that my shorts are a little too short. But I want to start, dude, on our conversation that we literally just had, which is, does the venture business work anymore when we have entry prices of 150 and 100 x ARRs as we are seeing today?

• 5:28Speaker 00

  So you could say that there are multiple answers to that. First of all, the venture business as a whole doesn't, doesn't work. It doesn't work, it shouldn't work. Returns, distribution are not divided equally between players. Otherwise, it would be too easy and there won't be winners and losers. It would be boring. None of us would be playing that. We would do something else. So the expectation that the venture business would work out is set yourself for disappointment from the get-go. It doesn't work. Now, it worked for some people. It worked for some people for some time. And the number of people it works for them for a long period of time.

• 6:10Speaker 00

  You know, let's take our favorite friends from Sequoia Capital or Andreessen, Benchmark, Greylock, Lightspeed, I probably... That number of players is super small. And if you look at all the amount of money that's flowing into the markets right now and for the past few years, no, I don't think it's going to work. I think it's going to end up with some serious catastrophe for many of the players. If I'm a limited partner and I have distributed my... Venture allocation evenly, I wouldn't sleep well at night. Cybersecurity is probably an interesting enough market to talk about.

• 6:55Speaker 00

  And it's sizable enough market to talk about. And the flow of new players into cybersecurity is quite steady for the past, I would say, twenty years. You know, you're looking at around three hundred fifty, four hundred new teams that get funded every year. Across US, Israel, a little bit in Europe, unfortunately, you know, it should be more. That number, that's hundred percent of the cybersecurity universe. So think about it like the past decade, there were about four thousand new cybersecurity startups.

• 7:33Speaker 00

  And in the next decade, there'll be probably four to five, maybe thousand cybersecurity startups in a world. A large number. And over the past few years, the entry price, as you rightfully mentioned, is going up, is going up. When I wrote the first check to Asaf Rappaport at Adalum. It is at the first company they started in twenty twelve. It was done at fifteen million dollars post, five million dollars check.

• 8:08Speaker 00

  At least in twenty nineteen, I wrote a six million dollars seed check at sixty six million dollars post money. Today, you can see, you know, watching deals done at a hundred, a hundred and fifty million dollars post. Many of those deals done at high prices, that's in the incoming stream. If you look at the outgoing stream, you know, you look at exit prices or even the likelihood of a cybersecurity company to become a unicorn. Do you have any idea, you know, take Israel, which is probably forty percent of the market.

• 8:49Speaker 00

  So we have to multiply the Israeli number by two and a half to get the global number. Do you have any guess what's the number of companies that became unicorns in cybersecurity last year, twenty twenty five? Six to eight. Two. Twenty twenty four.

• 9:05Harry Stebbings?

  And go five.

• 9:06Speaker 00

  One.

• 9:07Harry Stebbings?

  Oh, that was bad, yeah.

• 9:08Speaker 00

  So we we go, it's two or one till twenty twenty two. The only year which was an outlier, which was an exception, was twenty twenty one. Twenty twenty one, there were like seven companies that turned unicorn. But that changed the mindset of investors. The fact is that out of around hundred and fifty new companies in cybersecurity in Israel, the likelihood you'll hit a successful company is still one to one percent. It's one out of hundred and fifty, maybe two out of hundred and fifty. And the prices, the entry prices where you buy stock at the seed stage is going significantly

• 9:51Speaker 00

  higher means that the market is not balanced. A lot of that cash that's flowing into the market would be wasted. As a founder, you have to pick your financing partners more wisely. The numbers and the probabilities are not working in your favor. They're working against you and it's just getting worse and worse over time.

• 10:13Harry Stebbings?

  Can I interrupt you and say, I can say this because we know each other and you know there's so much love and respect for you. Do you think you're being a boomer? And what I mean by being a boomer is the alternative argument would be, Gilly, we are seeing labor displacement like we've never seen before. We're seeing outcome sizes expand like we've never seen before. We're seeing crowds strike and Palo Alto Networks reach sizes of market cap that were never before thought possible. Of course, we can pay more on entry because the outcome sizes are so much bigger.

• 10:43Speaker 00

  You can say that. That would be a legitimate argument and I would accept it with all humbleness. It would not change the probability facts around this game. And venture is a game. You know, we know very little when we get into into investments. We, if we analyze product ideas and and markets, mostly we we analyze smoke because, you know, the founders would change their mind in in just few weeks and it. Would be a different product, different market, many different things. So, so we know so little. And you're right, some of the outcome definitely in cybersecurity became very massive.

• 11:26Speaker 00

  Because the pain points in cybersecurity are massive. This is not an argument why we should invest less in innovation in cybersecurity. The contrary, we should invest more in innovation in cybersecurity for reasons we can, we can discuss in a minute. But we should be super realistic as investors and limited partners about the ongoing and lasting impact of entry prices when we invest in innovative technologies and emerging teams.

• 11:58Harry Stebbings?

  What we haven't discussed correlated to that increasing entry price is the increasing fund size that has been associated and correlated to that. Fund sizes have ballooned. I mean, now we have ten, we both love, you know, your Sequoias and your Andreessen's and we have ten billion dollar funds. Andreessen and I know it's combined, that's a little bit misleading, but you know, David George has a six, seven billion dollar pool. It's a lot of money. Do you think the mega funds will be able to return venture-like economics in this generation of venture, given what we just discussed?

• 12:28Speaker 00

  Overall, I think that the funds that have the tradition, the textbook, the guardrails to make great investments, they would continue to do well. Would I invest in those funds personally? Yes. Again, in a way, we should admit that we are looking at a massive opportunity ahead of us. So it's not any criticism of the opportunity. The opportunity is here, it's real. The investment in innovation is justified. And those companies, especially those companies that are growing very, very fast, they need a lot of cash, more cash than before.

• 13:05Speaker 00

  I don't think that the cloud, code and AI, which at least in the next few years would not change that materially. And it takes a lot of money to build large companies. So yes, I encourage founders to raise a lot of money if they like to continue and build significant companies. You can correlate fund sizes to that. My concern is around entry prices and whether that would limit innovation at some point in time because disappointment would show up.

• 13:40Harry Stebbings?

  What did you turn down because of price that you later regret? And what did you not see if you do a post-mortem?

• 13:47Speaker 00

  It's a complicated question to answer because, you know, we are exercising the science of greed almost by by design. We need to be selfish and we need to be greedy. Those are good traits for an early-stage investor. Those are not bad, negative traits for anybody who's dealing with early stage. Price is an important consideration. And whenever I see an inflated price, see the deal where essentially it's a bet on a team, I get more skeptic now. Whether I turn it down or not, it depends on many other factors.

• 14:24Harry Stebbings?

  I think one challenging thing about where we are today is so many of our prior assumptions or beliefs are questioned. And one of them is around growth. The growth of companies today is so much more significant than it has been in the past. How do we value companies when the growth trajectory and pathways are so very different?

• 14:45Speaker 00

  First of all, I believe that trajectory, velocity, growth rates are the most important indicators for a healthy business. I think that part of our job is to look at that growth and try to sense whether it's been engineered or it's being organically achieved. And there are ways to engineer growth. But, you know, whenever you see a business that's growing very, very fast, it's a good company, as a general statement, I mean, because that's the best predictor for a company that does well. And over time, I learned that whenever a business is getting to a point, it's growing

• 15:30Speaker 00

  super fast, year over year, it becomes part of their DNA. So it would not slow down just because, you know, averages and things like that. There need to be a significant external event to slow them down. So if a company grows Fast, it would continue to grow fast. It's part of the DNA. They probably do something very right at that company. Now we can go and analyze that and backtrack that and attribute that to all kinds of founder traits and market dynamics and things like that. But it doesn't change. You know, if you look at the way companies like Wees

• 16:14Speaker 00

  or Sierra have grown. At Cyberstarts, we do the same type of exercise, product market fit exercise with all our companies. It's an attempt to get into some sort of alignment between the pain point in the market and the solution you have. So you really sell something that people would use and love and buy more and recommend to their friends and colleagues. That's product market fit. And at Wees, when you look at the first year of selling software, their first quarter was a million dollar. And then second quarter of selling software was two million dollars. And then eight, and then twenty four. That's an amazing year. That's in twenty twenty. When you see that level of growth, this is not a one-time event.

• 16:59Speaker 00

  And we had the records of companies like Palo Alto Networks or ServiceNow, who are part of the Sequoia Capital portfolio. So I had access to the numbers. And, you know, this is insane pace, what Wees demonstrated.

• 17:15Harry Stebbings?

  Do you think great companies are up and to the right there? Because I was always of the belief that actually companies zig and zag and they cluster.

• 17:22Speaker 00

  I'll give you the other. So Sierra, they had an amazing start. You know, they sold probably half a million dollars in their first quarter and then a million dollar. And then they sold zero for two quarters, literally zero. It was, okay, what's going on? As an investor, you look at yourself and say, okay, I really fucked up. And then we, you know, the, the team, and I, I really attribute that to, to the founders. They really analyzed what's going on. They made some modifications. And the next 12 months, they sold 12 million dollars of new business. So they went two to 12. And then it continued to grow extremely fast because when you see a company that grows that fast,

• 18:04Speaker 00

  it's part of the DNA. There's something about the company that make them grow fast. It may be amazing execution on go to market. It may be weakness on the competitive side. It may be perfect timing with market. It's probably product market fit. But there's reasons that you can analyze, but that thing that makes them move so fast, typically, most of the cases would not simply fade away.

• 18:33Harry Stebbings?

  So one of my biggest lessons is the importance of market size and just having mega, mega markets. Because to your point online up and like if, if you hit target and you continue to hit target, I honestly, I was like, yes, but so many companies plateau, they hit 20, 30 and then and the markets are just not as deep as we thought. They're more crowded and we thought what, the market is not what we thought it was. Am I wrong? And does great quarter compound to next great quarter? And how do you think about that? The majority do plateau.

• 19:02Speaker 00

  I don't think you are wrong. I, I'll give you two contrary examples and, you know, that's the beauty of our profession, that it's made up of the exceptions. Because the rules, who cares about the rules? So take a company that focused early on, one of my portfolio companies in Fund One called No Name. It was focused on, on API security. Amazing company. You know, they did first year, I believe it was three million dollars or so. Second year, 15. Amazing. And they, they slowed down. Why? The market for API security, you know, it wasn't a market. It was a niche segment within application security.

• 19:45Speaker 00

  And the company in order to really sustain that growth had to really reinvent itself.

• 19:52Speaker 00

  Into a much bigger product vision, market vision. And it was super hard and eventually we we sold the business to Akamai for half a billion dollars or so and, you know, that was the end of story. On the other hand, another company in our portfolio, you know, same year, founded on the same year, twenty nineteen, company called Island. Amazing founders, Mike Fa is the CEO, Dan Amiga is the CTO. And the company is is basically selling browsers. And their idea is enterprise browser. Now, believe me, in twenty nineteen, the number of customers, number of seesaws, number of chief information security officers that told told us that they need an enterprise

• 20:37Speaker 00

  browser equals the number of CIOs or users that told the market in two thousand and six that they need an iPhone. It's a market that doesn't exist. And still, the company is growing super fast. You know, it's a five billion dollar company today in valuation, growing very, very fast in a market that it it actually they defined the market. And the market is growing. I can't talk about the specific customers they have, but they have tons of financial services and Fortune one hundred customers. Think about a bank that's using an Island browser instead of Google or Microsoft browsers.

• 21:19Speaker 00

  That's that's unbelievable, because you're essentially competing with three, which is a tough competition. The conclusion, again, in my mind, is that we are exercising the science of exceptions. It's good that we share that those lessons, but if you just take those lessons and apply them linearly, I think that it would be very hard for you.

• 21:43Harry Stebbings?

  You mentioned two incredible businesses there with Sire and Islands. I am interested, because when companies are on a trajectory like they are, and I'm not choosing them, so I'm kind of just saying a trajectory that's amazing and fast-growing companies that are clearly looking like winners, capital concentrates. What happens often is the foie gras. You know, foie gras, funnel explodes. Do you worry that too much money goes in too quickly and the founders are defocused and distracted?

• 22:10Speaker 00

  I'm never worried about that.

• 22:11Harry Stebbings?

  Why?

• 22:12Speaker 00

  Because it takes a lot of money to to really build those companies. And if we don't need the cash this year, we need it next year. So I'm not worried about that. The contrary example of engineering growth, if you're taking good money and your magic number is horrible, and you know, for every dollar you spent on sales and marketing, you generate 10 cents in new ARR, you're in a horrible business. And yes, you can take that money, throw it, and and your efficacy, your yield is so low that you you'd not be able to sustain it. But if you've built a product that fits what the market needs, product market fit,

• 22:54Speaker 00

  you've got a team, a go to marketing that executes in a decent way, decent plus way, your yield would be significantly higher. Now, it may not be as you'd like it to be to be, I don't know, 140 cents on the dollar. Maybe it's going to be because it's early, it's going to be 65 cents, growing into 80 cents on the dollar, but the yield would be decent. You can see how you can turn it into a profitable business. And and then why would you care that you you have, you know, another extra 200 million dollars in the bank?

• 23:27Harry Stebbings?

  I think the concern is that you have a brilliant but young founder who suddenly brings forward a product roadmap, does four things, not one, becomes defocused, opens up new geographies too soon, hires too aggressively and poorly, and then suddenly the core business that we liked, we loved, is now all over the place, and we need to rein it back in.

• 23:48Speaker 00

  Intellectually, I get it. I don't have that concern. I'm not in a business of babysitting founders. And for me, this is like babysitting the founder. If we trust them to build, in my case, an important cybersecurity company that's critical to all the major banks in the US, and you you put in their hands the safety of our nation's most sensitive information, and then you tell them, okay, and you can't handle the idea of that you have some extra cushion in the bank, and you're going to get sloppy and lazy. Okay, I don't buy into that.

• 24:23Harry Stebbings?

  You mentioned engineering growth. One way that you can engineer growth today is actually in your cogs and spending on inference, allowing for a reduction in margin. Now, I was always taught that margin mattered. But we're seeing margins denigrate in a wave of AI as more and more is spent on inference. Do we just appreciate that margins will come good eventually? Or do we appreciate that AI is just a different margin profile that we have to get used to?

• 24:49Speaker 00

  I'm not sure what's the right answer. Because I don't think that we have seen enough of healthy, profitable AI businesses to really drive back the important vital signs for a healthy AI company. Who knows? I can tell you for sure that the vital signs for a healthy cybersecurity company involves high, healthy gross margins. So my instincts are that, you know, gross margins matter. Now, are they important? How much I discuss, how often I discuss gross margins with my early-stage companies? Never. Part of the journey and part of our job as investors is to really help the founders

• 25:33Speaker 00

  realize what challenges, what problems they need to tackle right now, this year, 2026, and what are the challenges and problems that they would tackle in 2027 and 2028. So I would be lucky enough and you become a founder of a young cybersecurity company in the Cyberstarts portfolio. I would tell you, you know, gross margins are important. Let's talk about it in 2029. And let's build the foundations of healthy business, assuming that we would get to deal with gross margins.

• 26:07Harry Stebbings?

  Has your expectation on the growth rate of companies changed? Before, going from three to 10 was good. Now, with a Lovable, with a Lagora, a Harvey, you need to go to 50, and 50 to 200 in two years. The growth rates are so different. Have what you expect changed?

• 26:28Speaker 00

  I think that exceptional companies traditionally went in

• 26:33Speaker 00

  Extremely high pace and extremely high pace for me is let's say in the first five years, the moment you start to sell till the fifth year afterwards, if you go four X, four X, three X and three X on new ARR, not ARR, new ARR, in the second year you do four times the new ARR that you have done in the first year. I'll save you the math, that's hundred and forty four X after five years, which means that in the first year, even if you have booked a million dollar of new ARR, in the fifth year you'll book hundred and forty four million dollars of new ARR. That's a nice, nice company. Now,

• 27:15Speaker 00

  if you've done two million dollars in the first year and you follow the same velocity, you'll do two hundred and eighty eight million dollars of new ARR. That's even a better company. So I don't think there's a limit on what great is. I just gave you the amazing numbers of Wiz and I'm confident that five years from now, I, I, I'll be able to, to show you, I'll, I'll be able to demonstrate another team showing that actually Wiz was a slug and they can move much faster and they've done whatever it is. But the bar for real greatness for companies, I think pretty much to stay the same. Now you can do higher than the bar, that's great. Good for you. Do that. You know, you can grow

• 28:00Speaker 00

  from five to fifty to two hundred, please do that. But even if you do, I don't know, in, in, in new ARR, one, four, sixteen, forty eight, those are terrific numbers. You'll do, you'll do well. You may not be the most iconic company ever, but you'll do, you'll be a very, very nice company.

• 28:21Harry Stebbings?

  They're terrific numbers and they're even more exciting if the multiples on them that we value those companies are good. I look at my public market book and I used to think I was so good. It used to just be green, green. And now I look at it and it's all red, Google and Nvidia aside. And I look at it and I'm like, oh, maybe I wasn't so good. And the multiples are so low. You have Monday trading at like one and a half X, you have Wix trading at two and a half X, they just announced a buyback, which is enormous at their four billion dollar market cap. What do we do in a world where these multiples are so low and public markets don't value what we always sold?

• 28:59Speaker 00

  I'm not always sure I understand public markets. I'm confused and baffled exactly as you are. My guess, markets have expectations about growth rates. Exactly as we have discussed. And for whatever reason, if they believe that the growth rate of a company would decline because of whatever reasons, my guess is there is an expectation that autonomous programs would displace and would eat part of the business of those companies. But I'm not sure and I'm not confident about what I'm saying. But that's my assumption. Then you'd see the multiplier declining.

• 29:39Speaker 00

  But if those companies would continue, regardless of the market, would continue to grow at incredible pace, the multipliers would rebound back to where they are. The multiplier is just the market anticipation for your growth rate.

• 29:57Harry Stebbings?

  Cast with the extension of private markets, because I think so many people are so baffled by the public markets, that they don't want to go there, like your Stripes or your Canvas of the world. Do you think the extension of private markets in the way that we're seeing is fundamentally good?

• 30:11Speaker 00

  I think it's functional and I think it's sustainable. For me, you know, going public is not a financial event. It's a branding event. It's an occasion where you tell your customers, your partners, your employees, your future employees, I'm here to stay. That's IPO, because typically it's not a financial event. It's not a liquidity event. It's contrary, it's the opposite of liquidity event. You get shackles on your hand, you cannot sell stock, you've got all kinds of limitations. It's hell for liquidity, but it's an important marketing event. I believe that still many founders and many companies would choose to go through that

• 30:50Speaker 00

  exercise and pay the price, lack of flexibility and lack of liquidity, to gain the value, the long-term value of that marketing event. But IPO by itself is not a financial event. It's not liquidity, it's the contrary of that.

• 31:04Harry Stebbings?

  With that extension, we have the ability to sell in secondaries, let me sell into much higher priced rounds. How do you think about your responsibility or the importance of selling in secondaries much later on and providing mega returns to LPs in these very highly priced rounds?

• 31:20Speaker 00

  I think about secondaries, first of all, in a context of retaining talent. That's, I think, the most important consideration I have in mind when I think about secondary. Because it doesn't just take a lot of cash to build important companies and specifically important cybersecurity companies in our case. It takes longer time. With the current market, you typically grant employees, you know, stock for four, maybe five years. And yes, you can do some new refill and new allocation, but typically those are fractions of the original allocation. Because the company is bigger, there are more employees, it's in a different stage. So you get to situations where your best employees,

• 32:05Speaker 00

  your most important employees, your best engineers, your best product managers, your best salespeople are already fully vested. Structurally, you are unable to allocate them equally large or equally tempting grants. You actually force them out of the company. Because for those employees, assuming they are not, they were not born super wealthy, that equity, they are lucky enough, they are happy enough to be part of a company that's doing extremely well. They are fully vested. Now, most of the wealth of their family is actually attached to that one company. So it's actually very, very logical for them to consider diversification,

• 32:48Speaker 00

  exactly as we diversify our portfolio by going and joining another team and hoping to build a diversified portfolio. Now, the antidote for that market built-in weakness is the secondary. So that's the reason, by the way, that at Cyberstarts, we created a vehicle. We call it Employee Liquidity Fund, which is focused not on one-off type of secondary deals, but creating a program, a recurring program with a portfolio company where we provide liquidity to their employees every year.

• 33:31Speaker 00

  And what we do is that we underwrite a tender offer every year. So the employee of that company know that they are getting liquidity. The very same type of liquidity they would get in a public market, they would get it in a in a private company. And that would help our portfolio companies retain talent.

• 33:51Harry Stebbings?

  How does the rest of the cap table feel about that? You have, obviously, right of first refusals.

• 33:56Speaker 00

  Well, I'm happy, you know, I'm happy to let other participate with me. I do not object that. And we just announced that we've done our first type of secondary program with Sayera. I think that we are buying, probably not mention the exact number, but it's a many, many millions of dollars of few hundred employees of Sayera.

• 34:20Harry Stebbings?

  How do you do the valuation setting on those? Is it like a premium to last round and you just have a kind of blanket valuation mechanism? Is it?

• 34:27Speaker 00

  It's an ongoing process with management. You have to price around. So liquidity is, you know, back to the topic. I gave you the example just to show how we we practice this, you know, theoretical argument about it takes more time for companies to to mature and to get to the public market. If they get to the public market, it becomes a strain on their talent pool and how secondaries are actually the solution for that. So the story I just told you is, or the example I just gave you is as a way to solve it. I'm sure there are other ways to do it. But secondaries can be also a way for early stage firms like cyberstarts to return capital to limited partners.

• 35:12Speaker 00

  You know, it makes the systems, it make the markets more sophisticated. And with that extra sophistication, you can create better solutions, first of all, for employees, for founders and for limited partners. And overall, I think that's that's a highly positive element in a business.

• 35:31Harry Stebbings?

  So you will lean into liquidating some parts of positions and providing cash back in earlier situations?

• 35:37Speaker 00

  Look, it's not a secret that at Cyberstarts, we have sold secondary shares at companies like Wiz early on. By the way, I regret I sold every single share at Wiz. I regret it because, you know, if I sold it right now, I would show better performance for my limited partners. But at the time, it looks like the right thing and the responsible thing for us to do, and we did it.

• 36:00Harry Stebbings?

  What did you get wrong? I mean, obviously, you made millions and millions, incredible. When you sit up, do a postmortem on that, what did you not see that you would like to have seen?

• 36:09Speaker 00

  It were the early days for Cyberstarts and, you know, we talk about startups, you know, Cyberstarts or, you know, 20 VC and, you know, those are startups. Those are businesses with business plan, with teams, with clients. Early on, I thought that it's a good thing for us to show our limited partners that not all, you know, we had an incredible, super high paper value of portfolio. And I wanted to demonstrate to them that we can actually drive some liquidity to them.

• 36:40Harry Stebbings?

  Do you think there are core misalignments between GP and LP? And so we can take that as an example, where it's like, an early GP will want to distribute, show great DPI because they want to go and rate, and I'm not saying you here at all, but in most cases, because they want to go and raise a bigger fund sooner. And actually, if I'm in a holding LP, I want you to retain that position. I don't want you to do that. There's a misalignment there. Do you think there are other misalignments that we don't talk about?

• 37:05Speaker 00

  Potentially, but even for that quote-unquote misalignment, you know, it's always easier to look at it over time. But back in the early days, when I made a mistake and sold Wiz stock that if I knew where it's going, I would, I would hold on to that. The reaction from, from my limited partners, and I have still a very sophisticated, smart set of investors, was overwhelmingly positive. They were cheering for that because for them, it was, it's a new GP and that was a a a positive event. I had only one or two super smart LPs. I remember one, you know,

• 37:49Speaker 00

  one of them called me and say, hey, I'm not investing here to hedge my risks. I actually like to take more risks. And and I appreciated that. And by the way, I still believe it it was for cyber starts back then. It was the right decision.

• 38:03Harry Stebbings?

  When you look back at the investors that you were and that you are today, have you changed much?

• 38:07Speaker 00

  I think I changed a lot. I probably went zero to one, meaning no business, seed investment, no idea to a real business, probably close to fifty times. That's a lot. And I hope that, you know, if you do that type of journey fifty times, you learn something. And I think I'm learning every day. I think that, you know, what's the only constant in our business is the diversity and the change of the people I I meet and and partner with. And I think that that what makes this profession, in many ways, it's a terrible profession, you know.

• 38:49Speaker 00

  It's it's a profession where you you don't know if you're good in what you're doing for five or six years. Show me another profession where you show up to work every day for five years. You have no idea if you're doing any good. So in that sense, it's a terrible profession. But I I really think it's a one of the most exciting professions in the world just because it gives you the opportunity to share your life with so many amazing individuals. And you can gain just a little bit from from every team you partner with. But cumulatively, I think that we are gaining a lot and we have to listen better. We we have to become better listeners over time.

• 39:33Speaker 00

  And that by itself makes us better people, better parents, better partners. So you're going through a change and and it's not like. One-time change, it's a gradual change and the more you do that, the more teams you go with to the journey, the more ups and downs you experience in the business, you change and I think you become a better version of yourself.

• 39:59Harry Stebbings?

  What would you say to me and to many people in the industry who are looking at frameworks that we used to use and they're kind of out the window, whether it's your rule of forties or your triple, triple, double, doubles or your focus on margins in the early days or whatever these are and the world seems to be less secure or obvious than it was in a prior generation. What would you say to that younger generation of investor feeling insecure about their skills in this new world?

• 40:24Speaker 00

  Learn as much as you can from old farts like myself, but at the end of the day, use your guts to make decisions. Nobody knows better than you do.

• 40:34Harry Stebbings?

  Do you have a monopoly on the Israeli cyber market?

• 40:38Speaker 00

  I don't know. I don't know and I don't think about it.

• 40:41Harry Stebbings?

  Do you ever have a company though, and I don't mean this arrogantly at all and you don't sound arrogant because I'm asking you, do you ever have a cyber company in Israel where their seed round is announced and you're like, hmm, I didn't see that?

• 40:52Speaker 00

  Maybe once or twice over the past eight years, but there are deals that I'm telling myself, okay, I should have done it. That was a mistake.

• 41:01Harry Stebbings?

  Which one most resonates?

• 41:02Speaker 00

  It really doesn't matter and I probably don't regret the right one and I regret the wrong ones. You know, one thing I learned about the business is that I focus on the deals I've done and the teams I've partnered with. That's where I put my focus and energy. You know, you can't cover everything and you can't get everything. You are not going to win every battle and if you are stressed about winning every battle, I need to be in every important AI company. I can predict that you are not going to be in every important AI company. I need to be in every important cybersecurity company. I'm not going to be in every cybersecurity company. So I focus on my portfolio companies and I try to do the best with the

• 41:46Speaker 00

  teams that put their faith in cyberstarts and work with us.

• 41:51Harry Stebbings?

  So funny, I remember speaking to Pat Grady about the great companies that Sequoia invested in, and I was saying about, oh god, you're such great pickers, and I was kind of being very kind, as is deserved. And he said, you don't understand, dude. Every single public company that doesn't have Sequoia as an investor is a miss. This is not okay. You understand that. And I really hit home on like market share for them as being a core driver, and it is for Andreessen. Have you lost a deal in the last five years?

• 42:21Speaker 00

  Yes.

• 42:21Harry Stebbings?

  You have?

• 42:22Speaker 00

  Yeah.

• 42:22Harry Stebbings?

  Who did you lose to?

• 42:24Speaker 00

  Some amazing, other amazing investors.

• 42:26Harry Stebbings?

  Is there anything else you could have done? Like, I always think, like, I never want to leave anything on the field. That's what I say to the team. We could have done more. I could have done another customer call, sent them another intro, hired someone else for them, paid more. Is there anything else you could have done to win it?

• 42:42Speaker 00

  Absolutely. There are always things you can, you know. If I look at the cyber starts business, we are improving it all the time. I'm telling my partners all the time, we are always as good as our next investment. But why, it really doesn't matter. Because if all our investments would be amazing, and we've lost one or two companies, that's doesn't matter. Again, everything leads me to the conclusion that let's focus on our own thing. We typically get what we want to get. We can always improve, and I'm very, very happy with the progress.

• 43:22Harry Stebbings?

  Before we do a quick fire, as we think about building teams, you have an amazing partnership, and you have great people in your team. What would you advise me on how to build a great venture partnership with incredible dynamics, relationships between partners? What should I know that you've learned?

• 43:40Speaker 00

  Lots of lessons. One example, which might be non-trivial, I learned that people are very different, and they bring different talents with them. As a manager, as an executive, as a managing partner. Very easy mistake you can make is to try and create some sort of guardrails and textbook and bring everyone into the same mode of operation. You do that typically because you think, okay, this is what worked for me. Now here's a new partner. Let's map the gaps between the way he or she performs and that recipe. And let's bridge the gap.

• 44:23Speaker 00

  My view on that is that I would let each team member play on their relative strengths and would not require them to focus on improving their weaknesses, but actually play more often and stronger on their relative advantages. Because on their weaknesses, at the best case, they can be as good as the market. But on the things that are exceptional, they are creating real advantage, real better, you know, real greatness. And that leaves cyberstars with a team of people that really enjoy working with each

• 45:04Speaker 00

  other, but each of us is operating in a different way and we respect that.

• 45:09Harry Stebbings?

  You learn that through mistakes. I think I've put guardrails on people before where I constrain them to my way of thinking. And then actually I realized that that's a negative for them where it was a positive for me.

• 45:19Speaker 00

  Exactly.

• 45:20Harry Stebbings?

  Okay, quick fire round, my friend. What have you changed your mind on most in the last 12 months?

• 45:25Speaker 00

  Founder's chemistry, how important that is. You know, I always thought that, you know, chemistry with the founder is important, but founders are brought to life in all shapes and forms. You know, focus on the teams that you have the most chemistry with.

• 45:40Harry Stebbings?

  Are the best founding teams not often broken up eventually? We always say like, ah, the CEO is amazing, but the CTO, and I was like, don't worry, just focus on the spikiest element being the CEO. The CTO will probably fall away. They might leave, they might be ahead of Ange, whatever that is. Just focus on the spikiest person. Does a founding relationship matter?

• 46:02Speaker 00

  Extremely, extremely matter, yes.

• 46:05Harry Stebbings?

  How do you test it?

• 46:06Speaker 00

  Simple tests, do they know each other? Were they, I don't know, roommates for a long period of time? Did they work together and went through some challenges? And sometimes you don't know, that's the truth.

• 46:19Harry Stebbings?

  Who do you learn the most from as an investor? If I'm fortunate to have people like you or Neil Major or Pat Grady as my mentors, who are yours?

• 46:28Speaker 00

  I think the decade I spent with Sequoia Capital was formation, you know, for me. And it wasn't easy period. You know, I couldn't do what I'm doing today without learning from Doug Leone and Michael Moritz and Jim Getz and Pat Grady. But it wasn't easy, you know, as I told you, it took me a long time to mature as investor. And it's crazy hard. You show up to the office every day. You're surrounded by super achievers and who are building amazing companies. And you look yourself in a mirror and said, okay, I'm the shittiest investor in this room.

• 47:11Speaker 00

  I don't, 10 guys around me, I'm the worst. And the next day, I'm still the shittiest investor. And you go like that every day. It's really hard. It's really hard. You have really bad days sometimes. It takes a lot of greed and determination to keep, to keep going and believe that you're going to figure it out.

• 47:31Harry Stebbings?

  What was your hardest day as an investor?

• 47:33Speaker 00

  When the first company I invested in shut down, I had to shut it down. That was super hard. That was, because it's a very public failure. It's a failure that you cannot cover. It's a failure that you have to deal with.

• 47:49Harry Stebbings?

  What motivates you more? The thrill of winning or the fear of losing?

• 47:54Speaker 00

  Thrill of winning.

• 47:55Harry Stebbings?

  What's the most memorable founder meeting, first founder meeting that you think of when I say that? It's not the best founder, it's not, but just like the most memorable first founder meeting?

• 48:04Speaker 00

  I had a really fun first meeting with a founder where during the meeting, the founder start to shout, "I'm the best. I'm the best motherfucker. I'm the best." And it's like, okay. And he's like, it goes on and on, like 10 minutes with this, like praising himself. And it was his way, I don't know, his crazy way to demonstrate self-confidence.

• 48:32Harry Stebbings?

  Did you invest?

• 48:33Speaker 00

  No.

• 48:36Harry Stebbings?

  Did it turn out to be an interesting company?

• 48:38Speaker 00

  Public company.

• 48:39Harry Stebbings?

  Wow, that's amazing. Okay, final one. What are you most excited about when you look forward to the next 10 years?

• 48:46Speaker 00

  Working with my team, growing, you know, amazing investors that can keep on making impact on cybersecurity.

• 48:55Harry Stebbings?

  Get it, I so appreciate you, I so appreciate the friendship, I so appreciate the honesty, you've been fantastic.

• 49:01Speaker 00

  Really enjoyed it and thank you so much, you should invite me more often.

• 49:09Harry Stebbings?

  But before we leave you today, you know what's wild? It's 2026 and so many product teams are still flying blind, buried in spreadsheets, chasing feedback across 10 different tools, trying to figure out what actually will move the needle. I've spoken with hundreds of product leaders and the best teams all do one thing differently. They build a system to capture ideas, validate them with real data and focus their roadmap on the right things. That's why product teams at Canva, Deliveroo, Toast, Decathlon use Jira Product Discovery. It pulls ideas and feedback into one place with built-in tools to prioritize what will actually have the biggest impact. That's when a roadmap stops being an endless list of ideas and becomes a plan people actually believe in.

• 49:51Harry Stebbings?

  Join more than 20,000 teams already using Jira Product Discovery. Head to atlassian.com/harry, oh I like it, I get my name in there, atlassian.com/harry and start building the right thing today. After Atlassian helps your team build and ship great products, Intercom helps you support the customers using them. If you're looking for a way to transform your customer service, let me introduce you to Finn, baby. Finn is the number one AI agent for customer service, resolving up to 93% of customer queries automatically. There is no other agent that can do that, not 93% of customer queries, okay? No other agent can do that. So why choose Finn? Finn is the best performing AI agent for CS.

• 50:34Harry Stebbings?

  Finn doesn't just answer questions, it takes actions. It automates the most complex customer queries like refunds, transaction disputes, technical troubleshooting with speed and reliability. I wish my team was speedy and reliable, beats every competitor in every head-to-head bake-off, completely configurable and code-optional setup. My word. I mean, the benefits just go on and on. It's easy and efficient implementation. It works on any help desk with no tedious migration needs. It's trusted by over 6,000 customer service leaders, including top AI companies like Anthropic, Lovable, Synthesia, Clay, Vanta. So if you're ready to transform your customer service team, scale your support, and give team members time to focus on the really high-level strategic work,

• 51:19Harry Stebbings?

  learn more about Finn at fin.ai/20vc. While Finn scales your support without losing speed, Reforg shows you how to translate that scale into durable product-led growth. Everyone's shipping faster than ever. Cursor, Claude Code, Codex, AI is making code and writing code faster than ever. But here's the problem: speed means nothing if nobody uses what you ship. That's where Reforg comes in. Reforg is building a product discovery engine that sits upstream of your coding agents. Not another prototyping tool, Research Repo, or AI Interviewer, but a product that will ingest your customer data, generate variations of product solutions, validate the solutions before code is written,

• 52:04Harry Stebbings?

  and hand off winning directions to your team. Reforg kills product debt before it starts, because every unused feature you ship isn't just wasted engineering time, it's a maintenance burden, complexity tax, and surface area that you cannot shrink. Used by product teams at companies like Toast, Vimeo, Klavio, and many more, Reforg helps teams ship more features than actually get used. Try Reforg at reforg.com/build and use the code 20vc, that's 20vc, for one month free of Pro.