On this episode of Invested, Michael Eisenberg sits down with Gili Raanan, Founder of Cyberstarts, inventor of the CAPTCHA, and chairman of Wiz - whose $32 billion acquisition by Google ranks among the largest venture-backed exits of all time.
When Gili left Sequoia in 2018, he made two decisions he now calls "idiotic": to invest only in cybersecurity, at a time when no one believed cyber could produce big outcomes, and to never ask founders a single question about their technology, product, or business idea. Instead, he asks about their mothers and their childhoods - looking for people who faced real hardship, overcame it, and showed early signs of greatness.
In this candid conversation, Michael and Gili unpack how Gili decides to invest after a single conversation, what made Assaf Rappaport special (starting with the meeting he never showed up to), and why Gili has zero concern that cyber has run its course. They also go deep on the catastrophic risks of AI, the race toward a zero-vulnerability world, why governments must adapt or fall behind, and what CAPTCHA looks like in the age of AI agents.
They discuss:
Why Gili bet everything on cybersecurity when investors stayed away
Why he never asks founders about their technology or product
The childhood signals that point to great founders
The Wiz founder who stood him up - and why he never forgot it
Letting founders make the call on a multibillion-dollar decision
Why cyber is far from running its course
The "very dark decade" of AI-driven cyber risk
AI that refuses to shut itself down, and the race to zero vulnerabilities
Why governments that don't adopt AI risk falling behind
Inventing CAPTCHA - and why it never found a business model
What makes us uniquely human in the age of AI
How October 7th changed his investing and led him to Hapoel Tel Aviv
Gili Raanan is a distinguished cybersecurity expert who has proudly invested and mentored many of the most successful cybersecurity companies in the world, including Wiz, Armis, Fireblocks, Island, Cyera & Upwind among many others. In 2018, he founded Cyberstarts, an early-stage venture investing fund, with a clear vision: to accelerate the development and delivery of the best solutions in the cybersecurity industry.
Cybersecurity has been Gili's life's work since he served in Unit 8200, where he won the Israel Defense Presidential Prize in 1996 and the Israeli Intelligence Forces Innovation Award in 1992. An engineer by training, Gili is widely recognized as the inventor of the CAPTCHA, helped build the first WAF (web application firewall), and holds 10 other US patents in the fields of security and application management. After his military service, he built two enterprise software companies that were acquired by EMC and IBM. In 2009, he joined Sequoia Capital, where he led the firm's cybersecurity, internet, mobile and technology investing in Israel for nearly nine years as a General Partner before leaving to build Cyberstarts.
Under Gili's leadership, Cyberstarts has raised more than $720 million across 5 funds and made 28 investments to date with a combined company valuation of $55 billion, with notable exits including Noname, Axis, Bionic, Dazz, and Avalor. Gili currently sits on 10 company Boards and is a minority owner in Hapoel Tel Aviv, his favorite basketball team.
If you want to understand how one of the world's most successful venture investors picks founders, why Israel has become the global brand for cybersecurity, and what AI means for the future of security, this episode is essential viewing.
Please rate this episode 5 stars wherever you stream your podcasts!
KEY TOPICS
00:00 - Intro
02:26 - Two "Idiotic" Decisions
06:14 - Why He Skips the Smartest Kid
09:39 - Investing After 10 Minutes
10:54 - Founders Are a Gift Box
14:14 - Growing Up Misunderstood in Kfar Saba
16:23 - Assaf Rappaport: The Wiz Founder Who Stood Him Up
20:06 - Passing on a $23B Offer
21:41 - Zero to One, 50 Times
23:53 - Has Cyber Run Its Course?
27:07 - A Dark Decade for Cybersecurity
28:24 - The AI That Won't Shut Down
32:13 - Governments Must Adapt or Fall Behind
36:24 - Inventing CAPTCHA
38:07 - Why CAPTCHA Never Made Money
41:35 - How October 7th Changed Him
43:21 - Why He Bought Into Hapoel Tel Aviv
RESOURCES
Follow Gili on LinkedIn - https://www.linkedin.com/in/giliraanan/
Follow Gili on X - https://x.com/giliraanan
Subscribe to Invested: https://content.aleph.vc/invested
Learn more about Aleph: aleph.vc
Sign up for Aleph’s monthly email newsletter: https://newsletter.aleph.vc/
Subscribe to Aleph’s YouTube channel: https://www.youtube.com/@aleph-vc/
Follow Michael on Twitter: twitter.com/mikeeisenberg
Follow Michael on LinkedIn: https://www.linkedin.com/in/mieisenberg/
Follow Aleph on Twitter: https://x.com/aleph?s=20
Follow Aleph on LinkedIn: https://www.linkedin.com/company/aleph-vc/
Follow Aleph on Instagram: https://www.instagram.com/aleph.vc/
CREDITS
Executive Producer: Erica Marom
Producer: Sofi Levak, Dalit Merenfeld
Video and Editing: Nadav Elovic
Music and Creative Direction: Uri Ar
Content and Editorial: Jackie Goldberg
Design: Nimrod Sapir
