When venture capitalist Izhar Armony plotted a path to success for three Israeli entrepreneurs who had launched a cyber security company, he delivered a tough recommendation: Sacrifice the beaches of Tel Aviv and move to the winter snows of Boston.
Armony, a general partner at CRV, formerly known as Charles River Ventures, felt the founders of Cybereason needed to move to the U.S. to realize their goal of growing their company. For most Israeli high-tech startups, the domestic market is not large enough to turn a profit.
Lior Div, Yossi Naar and Yonatan Amit, veterans of an Israeli Defense Forces elite unit, in 2012 founded Cybereason, which provides customers with software that detects and responds to cyber attacks. They turned to Armony and CRV for funding.
“The question that they asked was what would it take to build a really big company, to really give it a go,” Armony said during a presentation last week at the Israel Dealmakers Summit at the Pullman San Francisco Bay Hotel in Redwood City. “You move from a yellow couch in Yossi’s living room to a company that has raised hundreds of millions and has hundreds of employees.”
The summit was a three-day event at which business executives from the U.S., Israel, Europe and Asia discussed innovations and trends in technology. Global companies, such as GE, Microsoft, Bosch and Nasdaq, along with Israel’s Ministry of Economy and Industry, partnered to present the summit.
Armony, 53, told the Cybereason founders that it was important “to be with customers, to speak the same language, eat the same food.”
“You really want to be where your customers are. It’s hard to develop the language in which your customers think,” said Armony, who was vice president of marketing at computer-based training company Onyx Interactive in Tel Aviv before joining CRV in 1997. “And it’s very hard for someone from another culture to assess the qualities of an executive in a short interview. Many Israeli startups had lots of false hires, and that cost them a lot of time and money.”
Armony’s 10-minute talk at the Dealmakers conference was entitled “A Case Study in Helping Israeli Startups Succeed in the U.S.” Other sessions focused on topics ranging from artificial intelligence to crowdfunding and from autonomous vehicles to food tech.
Armony and CRV, based in Cambridge, Massachusetts, and Menlo Park, helped Cybereason through some growing pains, the hiring of key executives and a second round of funding. Cybereason now has 260 employees worldwide and had revenue increase more than 300 percent in 2016, according to public relations director Bill Keeler.
“Had that been possible if the founders had chosen to stay in Israel?” Armony asked at the end of his presentation. “I don’t think there are hard and fast answers to that, but I will leave that as an open question to ponder.”