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Gili Raanan: One of the Best Seed Investor of All Time: 1 Decacon, 7 Unicorns, 4 Acquisitions| E1128

Gili Raanan is the Founder of Cyberstarts and one of the most successful seed investors ever. In his 19 company portfolio, Gili has invested in a decacorn (Wiz), seven unicorns and had three others acquired. Prior to Cyberstarts, Gili spent over 15 years as a General Partner at Sequoia Capital investing in some of the world’s best cyber security companies. ----------------------------------------------- Timestamps: (0:00) Intro (00:50) Gili’s Background (05:28) Joining Sequoia (08:25) Lessons from Sequoia (27:23) Evaluating Founders & Ideas (31:00) Importance of Market Timing (35:43) Interaction with Founders (41:22) Getting Back Up After Failure (42:45) Learning from Losses (44:22) Focus on What Works (45:25) Challenges in Matchmaking Between Founders (46:06) Prepared Mind’s Movement (49:04) Role of Price Sensitivity in Deals (49:56) Right Amount to Raise & How Much to Raise For (51:38) Speed of Execution vs. Being First to Market (53:39) Cash as a Weapon & Importance of Liquidity (54:58) State of the Market (59:08) Distinction Between Seed Funds & Opportunity Funds (01:03:45) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Gili Raanan We Discuss: 1. From Founder to World’s Best Seed Investor: How did Gili make the move into the world of venture with Sequoia? How did Mike Moritz and Doug Leone recruit him? What was that process like? What are 1-2 of Gili’s biggest takeaways from working with Doug and Mike? 2. How to Find and Pick the Best Founders: What did Mike Moritz teach Gili about getting to know founders? Why does Gili look for the pain in the eyes of the founder? What questions does he ask? What are the most common signals of truly exceptional founders, having backed 7 unicorns? Why does Gili believe that both market and product is BS? Why are the founders all that matters? Why does Gili believe that the founder does not have to be a domain expert in a market to create a massive company in that market? 3. What it Takes to be the Best Seed Investor: Why does Gili believe that the best seed investors do not have theses? How important does Gili feel the brand of the VC firm is? What were his biggest lessons on brand from spending 15 years as a General Partner @ Sequoia? Why does Gili believe that the best investors are never happy? When you are happy, you lose. 4. 2021 is Back: Pricing, Uprounds and more Why does Gili believe that the best companies are always expensive and will always be expensive at every round? Why does Gili believe that 2021 pricing and funding is back? Is this a good thing? How does Gili advise founders on how much to raise and what valuation to set with investors? What does Gili believe are the single biggest sins from the zero interest rate environment? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Gili Raanan on Twitter: https://twitter.com/giliraanan Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #venturecapital #founder #giliraanan #cyberstarts #hiring #startup #investmentstrategy #sequoia #growth #investing #dougleone #mikemoritz #seed

Gili RaananguestHarry Stebbingshost
Mar 17, 20241h 9mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Inside Cyberstarts: Gili Raanan’s ruthless focus on people over products

  1. Gili Raanan, one of the most successful seed investors in cybersecurity, explains why he invests almost exclusively based on people rather than markets, products, or technology. Drawing on lessons from Sequoia, he emphasizes relentless hunger, brand power, and an obsession with understanding founders’ life stories, motivations, and hardships. He details Cyberstarts’ distinctive “Sunrise” process, a deeply customer-driven validation method that precedes building product and has yielded a decacorn, multiple unicorns, and several major exits. Raanan also discusses pricing, bull-market valuations, liquidity, the role of capital, and why he remains emotionally unsentimental about selling—even while being intensely emotionally invested in founders.

IDEAS WORTH REMEMBERING

5 ideas

Prioritize people over products, especially at seed stage.

Raanan no longer evaluates early-stage startups on TAM slides or product specs; he focuses almost entirely on the founding team’s character, motivations, and trajectory, assuming the idea will evolve dramatically every few months.

Probe founders’ life stories and real hardship to predict behavior.

He spends first meetings on childhood, parents, and life transitions, looking for early excellence and genuine adversity (e.g., divorce, illness, isolation) as signals of resilience and depth—rather than just polished resumes.

Use structured customer discovery to solve market-timing risk.

The Cyberstarts ‘Sunrise’ process runs 60–70 CISO conversations on “If we gave you $100M in engineering, what one pain would you fix?” then iterates solution theses and validation, compressing years of objections into months and ensuring current, urgent demand.

Relentless self-critique is a feature, not a bug, for top investors.

Borrowing from Sequoia, Raanan believes the moment you’re happy with your success is the moment you begin losing; he continually questions his decisions and refuses to see any win (even a $50B IPO) as a stopping point.

Capital is necessary fuel, but discipline must be independent of cash levels.

He accepts that building large, enduring companies is expensive and supports big raises—especially in a bull market—but insists spending discipline, systematization, and product-market fit work should not change just because more money is available.

WORDS WORTH SAVING

5 quotes

We are always as good as our next investment. The moment you’re happy with where you are, that’s the moment you start to lose.

— Gili Raanan

I decided that I would not even ask them about market or technology or product. We spend an hour speaking about their childhood and their mother.

— Gili Raanan

All my companies are for sale at the right price. I’m not a collector, I’m an investor.

— Gili Raanan

You get to know someone not by the inventory of their accomplishments, but by understanding why they picked to do those things.

— Gili Raanan

If you focus on doing the things you do well and a little bit less on the things you don’t do well, over 10, 20, 30 years you’ll be like a god.

— Gili Raanan

Early life, laziness as efficiency, and discovery of technologyLessons from Sequoia: brand, performance, and relentless hungerFounder evaluation: investing in people, not products or marketsThe Cyberstarts ‘Sunrise’ process for product-market fit and timingHandling setbacks, founder psychology, and the role of hardshipCapital, valuations, liquidity, and the current bull market in private techCyberstarts’ fund structure, follow-on strategy, and views on marketing and growth

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