# Venture Market Imbalance, Growth DNA, and Strategic Secondaries

**Podcast:** The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
**Published:** 2026-03-28

## Transcript

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.
The market is not balanced.
A lot of that cash that's flowing into the market would be wasted.
Venture is a game.
You know, we know very little when we get into investments.
We need to be selfish and we need to be greedy.
Those are good trades 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.
This is 20VC with me, Harry Stebbings.
And what a guest we have in the hot seat for you today.
Gilly Renan, founder of Cyberstops and one of the most successful seed investors.
ever in his 19 company portfolio of fun 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 CyberStars, Gilly spent over 15 years as a general partner at Sequoia, where he invested in some of the world's best cybersecurity companies.
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, 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, 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 20,000 teams already using Chira Product Discovery.
Head to Atlassian.com forward slash Harry.
Oh, I like it.
I get my name in there.
Atlassian.com forward slash 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.
Finn doesn't just answer questions.
It takes actions.
It automates the most complex customer query.
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, learn more about Fin at fin.ai forward slash 20VC.
While Fin scales your support without losing speed, ReFord shows you how to translate that scale into durable product-led growth.
Everyone's shipping faster than ever.
Cursor, claw 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 Reforge comes in.
Reforge is building the 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.
Reforge 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, Klaviyo, and many more, Reforge helps teams ship more features that actually get used.
Try Reforge at reforge.com.
You have now arrived at your destination.
Gilly, we've 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.
Happy to join.
And if I knew that you are coming with shorts to the interview, I would come, I would show up earlier.
Dude, do you not realize that we have the table so I can hide them?
I look professional from above.
Oh, I didn't mean to disclose any state secrets.
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?
So you could say that there are multiple answers to that.
First of all, the venture business as a whole 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.
You know, let's take our favorite friends from Sequoia Capital or Andreessen, Benchmark, Greylock, Lightspeed, probably.
That number of players is super small.
And if you look at...
All 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 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, 20 years.
You know, you're looking at around 350, 400 new teams that get funded every year across U.S., Israel, a little bit in Europe, unfortunately.
You know, it should be more.
That number, that's 100% of the cybersecurity universe.
So think about it like the past decade, there were about 4,000 new cybersecurity startups.
And in the next decade, there'll be probably four to five, maybe 1,000 cybersecurity startups in the world, a large number.
And over the past few years, the enterprise, as you...
rightfully mentioned, is going up.
When I wrote the first check to Asaf Rappaport at Adalom, the first company they started in 2012, it was done at $15 million post, $5 million check.
At Twiz in 2019, I wrote a $6 million seed check at $66 million post money.
Today, you can see, you know, watching deals done at $100, $150 million 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 40% of the market.
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, 2025?
Six to eight.
Two.
2024.
Go five.
One.
That was bad, yeah.
So it's two or one till 2022.
The only year which was an outlier, which was an exception, was 2021.
2021, there were like seven companies that turned unicorn, but that changed the mindset of investors.
The fact is that out of around 150...
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 150, maybe two out of 150.
And the prices, the entry prices where you buy stock at the seed stage is going significantly 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.
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 CrowdStrike 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.
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 investments.
If we analyze product ideas and markets, mostly we analyze smoke because, you know, the founders would change their mind in just a few weeks and it would be a different product, different market, many different things.
So we know so little.
And you're right, some of the outcome definitely in cybersecurity became very massive 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 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.
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 10 we both love you know your sequoias and your andresans and we have 10 billion dollar funds i mean andres 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 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.
I don't think that 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.
What did you turn down because of price that you later regret and what did you not see if you do a post-mortem?
It's a complicated question to answer because, you know, we are exercising the science of greed.
Almost 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 seed 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.
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?
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 being engineered or it's being organically achieved.
And there are ways to engineer growth.
But 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 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 needs 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 trades and market dynamics and things like that.
But it doesn't change.
If you look at the way companies like Weez 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 Weez, when you look at the first year of selling software, the first quarter was a million dollars.
And then second quarter of selling software was two million dollars.
And then eight and then 24.
That's an amazing year.
That's in 2020.
When you see that level of growth, this is not a one-time event.
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 we've demonstrated.
Do you think great companies are up and to the right, though?
Because I was always of the belief that actually companies zig and zag and they pass up.
I'll give you the other.
So Sierra, they had an amazing start.
You know, they sold probably half a million dollars in the first quarter and then a million dollar.
And then they sold zero for two quarters, literally zero.
It was, OK, what's going on?
As an investor, you look at yourself and say, OK, I really fucked up.
And then, you know, the team and I really attribute that to the founders.
They really analyzed what's going on.
They made some modifications.
And the next 12 months, they sold.
$12 million of new business.
So they went 2 to 12.
And then it continued to grow extremely fast.
Because when you see a company that grows that fast, 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 so one of my biggest lessons is the importance of market size and just having mega mega markets because to your point on like up and like 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 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.
I don't think you are wrong.
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 API security.
Amazing company.
You know, they did first year, I believe it was $3 million or so.
Second year, 15.
Amazing.
And they did slow down.
Why?
The market for API security, you know, it wasn't a market.
It was a niche segment within application security.
And a company in order to really...
sustain that growth had to really reinvent itself into a much bigger product vision, market vision.
And it was super hard.
And eventually 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, 2019, a company called Island.
Amazing founders, Mike Fay is the CEO, Dan Amiga is the CTO, and the company is basically selling browsers.
And their idea is enterprise browser.
Now, believe me, in 2019, the number of customers, number of CISOs, number of chief information security officers that told us that they need an enterprise browser equals the number of CIOs or users that...
told the market in 2006 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 $5 billion company today in valuation, growing very, very fast in a market that it actually, they define 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 100 customers.
Think about a bank that's using an island browser instead of Google or Microsoft browsers.
That's unbelievable because you're essentially competing with free, 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 those lessons, but if you just take those lessons and apply them linearly, I think that it would be very hard for you.
You mentioned two incredible businesses there with Sierra 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 grasing.
You know foie gras?
funnel explodes.
Do you worry that too much money goes in too quickly and the founders are defocused and distracted?
I'm never worried about that.
Why?
Because it takes a lot of money 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 are 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 a new ARR, you're in a horrible business.
And yes, you can take that money, throw it, and your efficacy, your yield is so low that you would not be able to sustain it.
But if you've built a product that fits what the market needs, product market fit, 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 then why would you care that you have, you know, another extra $200 million in the bank?
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.
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 U.S., and 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 that you have some extra cushion in a bank, and you are going to get sloppy and lazy?
Okay, I don't buy into that.
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?
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 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 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.
Has your expectation on the growth rate of companies changed?
Before, going from 3 to 10 was good.
Now, with a Lovable, with a Legora, 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?
I think that exceptional companies traditionally went in.
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 4x, 4x, 3x, and 3x 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 144x after five years.
Which means that in the first year, even if you have booked a million dollars of new ARR, in the fifth year, you'll book $144 million of new ARR.
That's a nice company.
Now, if you've done $2 million in the first year and you follow the same velocity, you'll do $288 million 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 Wheeze and I'm confident that five years from now, I'll be able to show you.
I'll be able to demonstrate another team showing that actually Wheeze was a slog 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 just stay the same.
Now you can do higher than the bar.
That's great.
Good for you.
Do that.
You know, you can grow from 5 to 50 to 200.
Please do that.
But even if you do, I don't know, in UARR, 1, 4, 16, 48, those are terrific numbers.
You'll do well.
You may not be the most iconic company ever, but you'll be a very, very nice company.
They're terrific numbers, and they're even more exciting if the multiples on them that we value those companies at 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 1.5x.
You have Wix trading at 2.5x.
They just announced a buyback, which is enormous, at their $4 billion 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?
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 it is an expectation that autonomous programs would displace and would eat part of the business of those companies.
But I'm not sure.
I'm not confident about what I'm saying, but that's my assumption.
Then you'd see the multiplier declining.
But if those companies would continue, regardless of the market, would continue to grow at an incredible pace, the multipliers would rebound back to where they are.
The multiplier is just the market anticipation for your growth rate.
Can I ask, 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 that 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?
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 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 IP offer by itself is not a financial event.
It's not liquidity.
It's the contrary of that.
With that extension, we have the ability to sell in secondaries, bluntly 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?
I think about secondaries, first of all, in the 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 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, 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 were not born super wealthy, that equity, they are lucky enough, they are happy enough to be part of a company that is 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 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.
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 private company.
And that would help our portfolio companies retain talent.
How does the rest of the cap table feel about that?
You have right of first refusals.
I'm happy to let others participate with me.
I do not object that.
We just announced that we've done our first type of secondary program with Sierra.
I think that we are buying, probably not mentioned the exact number, but it's many, many millions of dollars of a few hundred employees of Sierra.
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?
It's an ongoing process with management.
You have to price the round.
So liquidity is, you know, back to the topic, I gave you the example just to show how we practice this, you know, theoretical argument about it takes more time for companies 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.
You know, it makes these systems, it makes 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 a highly positive element in the business.
So you will lean into liquidating some parts of positions and providing cash back in earlier situations.
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.
What did you get wrong?
Obviously, you made millions and millions.
It's incredible.
When you sort of do a post-mortem on that, what did you not see that you would like to have seen?
It were the early days for cyber starts.
And, you know, we talk about startups, you know, cyber starts 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 pay per value of portfolio.
And I wanted to demonstrate to them that we can actually drive some liquidity to them.
Do you think there are core misalignments between GP and LP?
And so we can take that as an example where I say an early GP will want to distribute, show great DPI because they want to go and raise, 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?
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 with stock that if I knew where it's going, I would hold on to that.
The reaction 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 positive event.
I had only one or two super smart LPs.
I remember one, you know.
One of them called me and said, hey, I'm not investing here to hedge my risks.
I actually like to take more risks.
And I appreciated that.
And by the way, I still believe it was for cyber starts back then, it was the right decision.
When you look back at the investors that you were and that you are today, have you changed much?
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 50 times.
That's a lot.
And I hope that if you do that type of journey 50 times, you learn something.
And I think I'm learning every day.
I think that what's the only constant in our business is the diversity and the change of the people I meet.
and partner with.
And I think that's what makes this profession, in many ways, it's a terrible profession.
It's a profession where 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 really think it's 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 every team you partner with.
But cumulatively, I think that we are gaining a lot and we have to listen better.
We have to become better listeners over time.
And that by itself makes us better people, better parents, better partners.
So you're going through a change.
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.
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 are kind of out the window, whether it's your rule of 40s 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?
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.
Do you have a monopoly on the Israeli cyber market?
I don't know.
I don't know.
And I don't think about it.
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, I didn't see that?
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.
Which one most resonates?
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 teams that...
put their faith in cyber starts and work with us.
So funny, I remember speaking to Pat Grady about the great companies that Sequoia invest 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 market share for them as being a core driver, and it is for Andreessen.
Have you lost a deal in the last five years?
Yes.
You have?
Yeah.
Who did you lose to?
Some amazing, other amazing investors.
Is there anything else you could have done?
I always think 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?
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 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.
Can we do a quick fire?
As we think about building teams, you have an amazing partnership.
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?
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.
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 the relative advantages.
Because on the 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 cyber starts with a team of people that really enjoy working with each other.
Each of us is operating in a different way.
And we respect that.
You learn that through mistakes.
I think I put guardrails on people before where I like constrain them to my way of thinking.
And then actually I realized that that's a net negative for them where it was a positive for me.
Exactly.
Okay.
Quickfire round, my friend.
What have you changed your mind on most in the last 12 months?
Founders 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.
Focus on the teams that you have the most chemistry with.
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 eng, whatever that is, just focus on the spikiest person.
Does the founding relationship matter?
Extremely, extremely mental.
Yes.
How do you test it?
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.
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?
i think the 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 from doug leone and michael moritz and and jim getz and pet grady but it wasn't easy you know you as i told you is it took me a long time to mature as investor and it's crazy hard you 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 say, OK, I'm the shittiest investor in this room.
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.
What was your hardest day as an investor?
When the first company I invested in shut down, I had to shut it down.
That was super hard.
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.
What motivates you more, the thrill of winning or the fear of losing?
Thrill of winning.
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 i had a really fun first meeting with a founder where during the the meeting the founder start to shout i'm the best i'm the best 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.
Did you invest?
No.
Did it turn out to be an interesting company?
Public company.
Wow.
That's amazing.
Okay, final one.
What are you most excited about when you look forward to the next 10 years?
Working with my team.
growing, you know, amazing investors that can keep on making impact on cybersecurity.
Gede, I so appreciate you.
I so appreciate the friendship.
I so appreciate the honesty.
You've been fantastic.
Really enjoyed it.
And Harry, thank you so much.
You should invite me more often.
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.
Join more than 20,000 teams already using Chira Product Discovery.
Head to Atlassian.com forward slash Harry.
Oh, I like it.
I get my name in there.
Atlassian.com forward slash 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.
Finn doesn't just answer questions.
It takes actions.
It automates the most complex customer query.
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, learn more about Fin at fin.ai forward slash 20VC.
While Fin scales your support without losing speed, ReFord shows you how to translate that scale into durable product-led growth.
Everyone's shipping faster than ever.
Cursor, claw 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 Reforge comes in.
Reforge is building the 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.
Reforge 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, Klaviyo, and many more, Reforge helps teams ship more features that actually get used.
Try Reforge at reforge.com.
dot com forward slash build and use the code 20vc that's 20vc for one month free of pro