Executive Summary
Gili Raanan controls what he describes as the 'only remaining monopoly in venture'—Israeli cybersecurity dealflow—providing unique insight into venture market structure breakdown. His data reveals a catastrophic mismatch: 350-400 new cybersecurity startups receive funding annually, yet only 1-2 achieve unicorn status per year outside of the anomalous 2021. Entry prices have exploded from $15M post-money (Adalome, 2012) to $150M+ today, while exit probabilities remain static at 1-2%. This creates a mathematical impossibility for most funds. Raanan's portfolio demonstrates the power law in action: Wiz grew from $1M to $24M ARR in their first year of selling (2020), displaying the 4x-4x-3x-3x new ARR velocity that creates 144x growth over five years. His Employee Liquidity Fund addresses the structural talent retention problem as companies stay private longer, creating recurring secondary programs rather than one-off transactions. The venture model works for exceptional operators with monopolistic deal access, but fails systematically for the broader market. Public market multiples (Monday at 1.5x, Wix at 2.5x) reflect AI displacement fears, yet Raanan maintains that growth velocity, not margins, determines early-stage value creation. His contrarian view: founders with exceptional chemistry and organic growth trajectories will compound regardless of macro headwinds, but the mathematical reality suggests widespread fund failure ahead.
Key Insights
what Gili Raanan said“Do you have any guess what's the number of companies that became unicorns in cybersecurity last year? 2025... Two. 2024... One.”
what Gili Raanan said“When you see a business that's growing very, very fast, year over year, it becomes part of their DNA. So, it would not slow down just because averages and things like that.”
what Gili Raanan said“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”
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