Tzakhi (00:01.282)
And on.
Alon Cinamon (Ibex Investors) (00:02.835)
Hi, how are you?
Tzakhi (00:04.206)
I'm great. Thanks for being here. We're at the Meet That Capital Startup podcast with Alon Siniman, an associate at Ibex Ventures, a very excellent VC firm operating in Israel and investing in Israeli startups. And Alon, you're also a very active member of the startup and VC community. You have your own podcast. You founded VC Club, which you'll tell us about in a bit. So thanks for being here.
Alon Cinamon (Ibex Investors) (00:33.057)
Thanks for inviting me and thanks for the very kind introduction.
Tzakhi (00:38.074)
You want to tell us just a couple words about yourself and your background before we dive in?
Alon Cinamon (Ibex Investors) (00:41.631)
Yeah, absolutely. So as you mentioned, I work at Ivex Investors. We are a US-based fund that invests much in Israel in many different strategies. I joined early this year to Nicole Priel, who's the partner who also opened the Israeli office to lead our early stage investments in Israel. Therefore, I'm based in Tel Aviv and currently in our office.
In Israel, as I'm sure that most of your listeners know already that in Israel, most of the industry is kind of like centered into kind of like a very, I don't know, two or three blocks and all the startups and the VCs are right in the center of Tel Aviv and I'm currently here. So yeah, I do some more activities beyond IBEX that goes hand in hand with my day-to-day job. So I'm kind of like used to being on your side.
leading the ecosystem podcast that is in Hebrew. So obviously if you have any Hebrew speaking listeners, they're more than welcome to pay a visit. And I found it together with amazing group of people, an NGO and nonprofit called the VC club that runs within the leading academic institutions in Israel, basically providing to excellent students and extracurricular in which they can dive into the world of venture capital and startups.
I founded it back in my undergrad and been managing it since then. Yeah, before joining ibex, I was working in another VC in Israel called Reload Capital. I was there for a few years. Before that, I was working in a startup, kind of like being a jack of all trades called BlueMail. I've been working in a product and support and QA. Kind of like I always make jokes about the fact that I also
We're running dishes and cleaning the office when it's needed. Kind of like being, you know, that's how it works when you're working on a startup, that it's very, very, very young. My undergrad, as I mentioned, is from Reichman University. I took the data science course. And before that, I was spending several years in the Israeli Air Force and obviously as the very challenging.
Alon Cinamon (Ibex Investors) (03:04.179)
times in Israel in the past year have been. I've been involved in some capacities and reserve duty as well. So yeah, that's a little bit about me and kind of like my background and what led me to join iVixx early this year and be involved in investments of a wonderful selected group of companies that we've been invested in just in the past few months and joined forces with the whole team here supporting the existing portfolio that I've already been deployed.
Tzakhi (03:33.134)
Awesome, yeah, we won't get into that too deeply because it's kind of off topic, but this is obviously a very unusual year in Israel, a very difficult year. And also it's an amazing job that you guys are doing, investing in Israeli startups. are a lot of opportunities. The startups here haven't stopped at all and everything is moving forward and I'm a very big believer in that. So that in itself is great.
Alon Cinamon (Ibex Investors) (03:41.279)
Mm-hmm.
Alon Cinamon (Ibex Investors) (03:54.837)
Mm-hmm.
Tzakhi (04:02.124)
I wanted to talk to you about approaching VCs, which is something which I think a lot of my listeners are interested in. Meet.Capitol helps early-stage startups. And there's always a question of how to approach a VC. And specifically, from your position as an associate, what is the right way to reach you? Should people reach out to you, or should they try to reach out to the general partners in the VCs? What is the right way to connect with you guys?
Alon Cinamon (Ibex Investors) (04:31.553)
So I think that the easiest and probably the best way to approach it is to actually break it down. You're kind of like, first of all, I think by the end of the day, founders need to understand in my perspective, at least that speaking to VCs, I think it's good early, early, early on, even before fully deciding on going completely fundraising. I think by the end of the day, it's really a matter of relationship, building trust, mutual trust.
and those things take time much more than several weeks. And I think that like founders that I really kind of like look up to, I think they're really, really good in kind of like maintaining relationships, kind of like always being fundraising in a way. So this is kind of like a general point I wanted to make. And I think it's important for every founder, even an early stage one, and even a first time one kind of like to make sure that they keep an ongoing relationship with.
a selected group of VCs they want at some point to partner with. And I think it's important to take it as a guideline in a way early, early on. A little bit more tactically, as you mentioned yourself, by the end of the day, I'm not the partner here at ibex. And I think there are many ways a founder could and should
approach of VC. I'll speak specifically about ibex because they mentioned kind of like how should someone reach out to me and then I can kind of like generalize it a little bit in kind of like a more, I don't know, something that is a little bit one size fits all in a way. So specifically about me, I'm very active on LinkedIn and other social media platforms. And I think that for me, it's relatively easy.
to get to me, my email is out there. And I think most VCs, at least the ones that want founders to approach them because they want to deploy Capito, they need. And most of them are somewhat open to cold reach out. It's kind of like just someone lands on my LinkedIn page and they can add me and send a message. And most of the time, at least I'll try to do my best to reply back. But I would say that
Alon Cinamon (Ibex Investors) (06:48.511)
This is not the most favorable way I would recommend, let's say a friend that decides now to go and fundraise. Cause I think back to the first point in terms of like relationship building, they want the first meeting, like the founders want the first meeting to be, to take it the best way they can. And now, let's put this, thought exercise into work in terms of like, even assuming that, you and I have been speaking, we have many different ways for us.
to start a conversation. And I would claim that the best way to start a conversation is by having someone who's close to both of us to make us talk. So what I would say and what I would highly recommend is that founders assuming that they want to, let's say, start a process with IBEX, for instance, and IBEX just as in placeholders, any VC, I would highly recommend them finding someone who knows someone within the organization or the VC they're trying to approach and have them
directly introducing one another. When I'm getting introductions to founders from people I trust, I trust their judgment, I trust their relationships and their own network, I would always approach those types of conversation kind of like a little bit more open than conversations that start solely out of cold outreach. Sometimes it could work as well. But again, VCs take...
the process that is being led by the founders. And maybe that's another point to make that in my perspective, and I would claim that most VCs see it the same way. The founders are the champions of the process and not the VCs. I'll explain founders by the end of the day need to lead their companies. They need to lead their boards. They need to lead their fundraising and
VCs take those types of processes that founders do with them to kind of like proxy estimate how would this founder operate in a sales cycle, for instance, or in a hiring process, for instance. So I would say here that the best way to start a sale process is to find someone within an organization that you can somewhat have a close relationship with, someone who could help you within the organization to kind of like succeed the sales cycle.
Alon Cinamon (Ibex Investors) (09:16.939)
So I think it's relatively the same way. And it goes to the second question you asked about the different positions. It could be sometimes confusing when you want to approach a new fund that you haven't spoken with yet. Like, who should I reach out to within the fund? It's very, very hard to understand the inner powers or the different influencers within the organization from an
an outlook perspective. So I wouldn't try to analyze so much, would this person have leverage or should I reach out to this person because he's stronger in a way than the other one rather than try to analyze to reach of the people within the fund. Can I get to not in a cold manner? This one aspect I would try to think and specifically about kind of like the
should I reach out to source? So now let's assume that you have, let's say, potential connections to either an associate or a partner. It's not necessarily the right thing to approach a partner, even though this is kind of like the white thinking. Because by the end of the day, like any organization, VCs that at least have employees, right? They work as organizations, and you need to have
supporters in the process and you need to have champions in the process and if you have let's say an associate or a principal someone who doesn't have let's say the mandate to deploy capital themselves let's say it doesn't matter if it's a junior partner principal associate I would say that having them as your champions within the organization could help
a company, a founder to succeed the process rather than to stall it. Because the partners have much of limited resources to make the investigations. They don't have much time because they need to split their time between sourcing and evaluating of new opportunities and sitting on boards and maintaining relationships with LPs and many, many different things. And I think that's kind of like collecting and associate
Alon Cinamon (Ibex Investors) (11:40.961)
to be kind of like on your sidelines, to kind of like root for you in the internal process within the potential firm you're exploring partnering with could actually be pretty beneficial for a founder to explore. So even though it's kind of like almost as, I think it's kind of like the, if you would ask a founder that way, kind of like the same question, would bet he would say, or she would say, no, go straight to the partner.
I would say not necessarily, it depends on relationship. And if you're able to convey the message good enough, you might find yourself an internal champion, so to speak, within the potential VC that you're trying to explore this partnership for.
Tzakhi (12:29.55)
Yeah, think it's probably there are a few, there are a few parameters here. one is, partners are not all the same. So in some VCs, some partners are really focused on getting LPs for the fund and others are more focused on deal flow and some. Every partner does both. so sometimes it's about reaching the right partner and also the partner that is most relevant to your domain because.
Alon Cinamon (Ibex Investors) (12:57.195)
That's true. That's very true.
Tzakhi (12:58.19)
Each partner has been leading different types. Let's say the VC has a very broad agenda, but the different partners have their own specific agenda or their own specialties or domain expertise. And then you want to reach out to right founder. Yeah.
Alon Cinamon (Ibex Investors) (13:13.725)
I would say one thing here, just as a comment, again, it's back to relationship. In my perspective, even though let's say, and there are VCs of kind of like, you could easily learn kind of like the different focus areas and the split between the different partners. It's not always the case. Sometimes it is. And yet I would claim that if you have a potential close relationship to one partner, even though they're not in the domain that you currently work in it.
I would highly suggest you approaching first the partner or the employee or just the persona within the VC that you have potential closer relationship with. Have them root for you, have them be on your sideline, and then they'll make the introduction, a very warm introduction to the right person within the VC, assuming it's the right fit. So again, optimize on relationships and human beings rather than analytical thinking.
When it's applicable, obviously if you don't have any relationship with anyone within the VC and you know that certain people are responsible for certain domains, you sit in them. So obviously you should reach out to the people that are relevant to your domain rather than others, because you don't want to waste your time or anyone's else.
Tzakhi (14:29.758)
I really like what you're saying, and we didn't coordinate this, but it really fits exactly to the methodology that I teach at my course on Meet.Capitol, which is when you reach out to VCs, you first look at the different partners, try to find a way to get a warm introduction. If you can't get a warm introduction, try to see if you can kind of create a warm introduction by finding mutual connections or by meeting them in an event or any way that will create some kind of warm
relationship building and only if you can't within reasonable, with a reasonable amount of effort, then you can reach out code through LinkedIn, which is also what you said. So perfectly fits what, thanks, yeah. You don't know yet, of course, because they haven't taken it, but I'll take the compliment anyway. All right.
Alon Cinamon (Ibex Investors) (15:12.139)
So you have a great course, if that's okay.
Alon Cinamon (Ibex Investors) (15:21.492)
Hahaha
Tzakhi (15:24.418)
I also think maybe you can tell us a bit about that because you've been at Glielot, which is a very big VC. Is there difference in process or in how to approach a VC when you're thinking about a big venture capital fund versus a small venture capital fund?
Alon Cinamon (Ibex Investors) (15:40.609)
That's a good question. Just to make things kind of like a little bit clearer, Glilot is much more focused on being an early stage VC rather than ibex that has an early stage strategy as part of a whole lots of strategies. This is kind of like why it's the same. So the early stage capital that is dedicated to work at Glilot is higher than ibex, but it's vice versa when you kind of like compare the...
Tzakhi (16:06.35)
Okay.
Alon Cinamon (Ibex Investors) (16:08.671)
the whole assets compared to the whole assets. So just as a side note, I would say that it really, really depends less of the, let's say the size of the VC rather on its stage of deployment. There are funds that are very aggressive, really, really want to deploy as much capital as possible because they recognize certain things and there are funds that
actually aren't able to deploy any further. And they will keep taking meetings just in the terms or the sense to kind of like stay on top of everything. And maybe they have another bet that they want to make. Somehow they would be able to kind of like clear some allocation towards it, but they are much less active than others. So I think the vision here should be more like active or eager to deploy rather than not.
as opposed to the size of the fund, because there are funds who are large and don't have much capital to deploy currently because of different reasons. And we wouldn't get into the reasons I think right now, because it feels a little bit out of the scope, but it could be either they're not able to raise their follow-on funds because of many reasons, because of performance or whatever. Their LPs aren't able to wire any capital right now.
They kind of like slowing it down a little bit. It depends on many different things. I would say that I would assume that there is a very high correlation between the funds that have recently declared new funds, meaning that let's say a firm now announces that they just closed another fund that is dedicated to something. I would say that those would be the ones that supposedly more active than others.
But again, it really depends on more being active and have a location to deploy rather than the size in my perspective, in my humble opinion. So that's one. And the second, perhaps another consideration to take into account, and you mentioned it as well, I think, in terms of like, are those funds are thematic, meaning are they domain specific or not? That's another consideration that I think not always is being taken into consideration when
Alon Cinamon (Ibex Investors) (18:31.627)
founders, mostly first time founders, start their fundraising process. I think that there are specific funds that are, let's say, special, that specializes in specific domains. And you'd know if you are from this domain, you'd know if they've been active or not. It's kind of like it's almost a known thing. But this goes back to kind of like the hustle that needs to be
integrated to the fundraisers process. It's not solely just LinkedIn or emails rather than speak to people, ask people, see who's just announced on a new fundraise, who just announced on new companies that they backed. Those would be the ones most probably that will be more active and more kind of like prone to take more meetings and kind of like handle more processes rather than just remain on their existing portfolio and just support it.
Tzakhi (19:30.22)
Okay, yeah, very interesting stuff. I wonder if you could tell us just a bit more about the inside workings of AVC with the different stakeholders inside. So what I'm really curious to hear from you is what is your incentive as an associate, other than doing a good job, which we all want to do a good job at whatever we're doing, but...
Alon Cinamon (Ibex Investors) (19:58.261)
Yeah.
Tzakhi (19:58.592)
As an associate in VC, what are your incentives towards bringing a good deal to the table?
Alon Cinamon (Ibex Investors) (20:06.305)
So that's a very good question, a very direct one even I would say, and I appreciate it. Yeah, that's true. So a couple of things, I'll speak about myself specifically, and then I'm not sure that everything I'll say here is applicable to others. So I'll stay kind of like specific and then I'll try to generalize it as much as I can. For me specifically, my trajectory at iBix is a long-term thing. I'm planning to stay here for the long run. So for me,
Tzakhi (20:11.362)
both Israel and they just go for it.
Alon Cinamon (Ibex Investors) (20:35.837)
it'll have a very direct impact on my future, let's say, progress and even success within the firm. So it's very important for me and I'm very, very motivated to choose well and to be very active and to kind of like to be involved in many, many of the deal making from many different perspectives that it's not necessarily associate related.
from legal to negotiations, to boards, to everything. So I specifically try to be very involved in all the deal making and then also the support of the existing portfolio. But I think by the end of the day, and I think most at least, let's say, not junior employees within VCs should be also compensated on good, let's say, choosing in a way. It could be the different, even the compensation.
be breakdown into kind of like there's a carry and VCs. mean, I don't know how far or how deep you want to go into kind of like the economics behind the rewards and being a good VC. But basically, let's say not junior employees will be at some point involved in the reward of choosing well, let's put it this way. So this also motivates obviously.
Tzakhi (21:58.99)
and there's alignment of incentives across the partners.
Alon Cinamon (Ibex Investors) (22:01.063)
Exactly, exactly. Like the partners themselves, by the end of the day, why would the partners that are not the owners of the firm would be incentivized to deploy well? It's because they have skin in the game and they're incentivized to choose well, because if they have chosen well, they'll be compensated accordingly. So that's kind of like one aspect to it. And the second one, I think that for me specifically, I'm very, very passionate about startups.
And for me to be able to be very, very involved in the deployment is for me as important as I see it almost as being a Zionist and it's a new gen of Zionism in my perspective. know it could be even some people could be cynical about it, but I'm completely serious. I'm seeing this industry as kind of like the head start of the whole tech industry in Israel. And I think it goes without saying kind of like how imperative and how important the tech industry.
in Israel to its whole economy, needless and regardless, like even the current, you know, very, challenging times. And, so for me, it's, it's kind of like how I'm being involved in this, very, important doing of, of kind of like deploying capital into innovation, into the most promising teams and working hand in hand with them. it's something I enjoy very much. so for me.
You know, career is something that takes a few decades. The better I do now, the better I'll be in the next few years. So this is kind of like what incentivized me. And I think most people that work in a VC, not in a partner level, rather than kind of like supporting the partners to choose well, mainly this is kind of like your question. I think they have this as well. If they don't have it, I think they're in the wrong profession. I think if you're not passionate about startups, about technology, about innovation, about business,
I don't think those people chose well their career pursuits and perhaps they need to reconsider, but those who have, I think we have this in common. So this is kind of like the second aspect of the motivation. The one is kind of like straightforward, economical one. And the second one is kind of like, it's really what I'm passionate about.
Tzakhi (24:18.818)
I know I'm 100 % with you on everything that you said, both in terms of what's going on here in Israel and in general. And this has been really great. Before we go, I want your five best tips for startup founders.
Alon Cinamon (Ibex Investors) (24:34.411)
For sure. So I came prepared and I prepared a few tips. So let's start with the first one. The first one I wrote focus, focus, focus, three times focus. Mainly, I think it goes without saying, I saw it so many times, like an early stage, like a startup that doesn't even have one single employee beyond its founding team.
goes on and tells me how they're going to do this and this and this and this and this without any traction, without any validation, without anything. What would I say is what would I highly recommend to the teams I'm working with? And in general, I would say that early stage startups need to find a very, very painful, specific, even niche problem and to solve it really, really, really, really well before they start to expand into more offerings.
would eventually potentially happen is that they confine themselves, spending themselves too thin and not being able to really, really solve any meaningful problem. So first one is focus, focus, focus. The second one is how important is the validation phase and then ongoing conversation with the market.
I see startups that potentially, let's say a VPR and D or VP marketing from this very successful startup decides to go and found his or her own startup. And they think they know a problem really, really well because they face it when they were working on, on, on in a previous company. But they need to make sure and they need to validate and document and to almost prove it that what they think is a problem.
It's actually a problem and it's problem that is meaningful enough and painful enough and people are willing already yesterday to deploy budgets to solve it. So validation with the market, even though if you think as a founder that you know the market really, really well, you don't know it until you speak dozens of dozens of conversations with non-Israeli or non-local, let's put it this way, non-local validation calls, not people that will confirm something that you forced them
Alon Cinamon (Ibex Investors) (26:50.881)
into a conversation to confirm rather than just ask big questions and see over and over again that the problem that you think you recognize is really there. So this is kind of like the second tip. The third tip would be to build a company in a global way already in the very first day. And I'll explain. I'm sure that at least part of the listeners are Israeli based.
But what I have seen in the past few years is that Israeli founders tend to use Israel as a sandbox in a way to validate their assumptions and start building the technology. Sometimes it works, sometimes it's not. And I'll explain as companies are deferred also geographically, meaning that things that you see in Israeli companies, even though if there are...
global facing startups, tech companies, like let's say more innovative ones. And you start building your product and kind of like confirming your assumptions upon tips or inputs that you're receiving from local companies is something that could be harmful later on. And I would highly recommend founders to steer away from their local markets, even though it's easier and already early, early on start.
at least the commercial side to build on the global scale in the global manner rather than on local ones. So this would be the third one. The fourth one, and I think we touched upon it quickly, is how I perceive startup founders as the champions of the fundraising processes. Sometimes I hear some criticism that is supposedly justified.
from startup founders saying that they've been ghosted by a VC. heard it many, many times. Maybe, and maybe that's the case, and yet they'll be ghosted over and over again by a potential customer. It means that they'll stop pursuing after this customer or they'll try to get to this customer from the window or from the door or from the ceiling or from the floor. I'd rather to hear the latter rather than the former. They are the champions of these processes.
Alon Cinamon (Ibex Investors) (29:09.451)
Those processes are being used as a proxy to estimate how they handle other processes. So they need to see themselves as such and they need to lead them all the way. And if they haven't heard from a VC they've spoken with, they can follow up with them. It's not a matter of respect, it's a matter of how you conduct business, how you do well to your own. So that would be the fourth and the final one would be hiring.
sometimes mostly in startups, obviously early, early, early days, what will happen is usually the founders would bring on their friends, so to speak, people they know, which makes sense. And this is one of the reasons VCs, this is actually a consideration when you invest in a new company, would they be able to bring on the right talent to execute upon the premise?
First hires are the capital T, capital H, capital E. The most important thing for an early stage startup. there's no room for any slacking or any kind of like discounts on this regards. You need to understand what positions you need in terms of hiring and you need to hire the best persona for them to make the job done rather than bring on friends because it's easier or they might do...
80 % of what you need, but you can trust them. I'm sure that's a consideration that some founders have. In my perspective, it's very wrongful. You need to make sure that you bring the best talent early on. The core team of a startup is the most important thing, at least in the early days. And you need to build it in a very cautious and a very kind of like not conservative, but
when you paid attention and thinking towards it. So those would be kind of like the five. I know they're very spread around, but it was important for me to kind of like convey them to you.
Tzakhi (31:17.556)
Awesome. Anand, thank you very much. It was great. And it was great talking to you. Yeah. Who should reach out to you and how?
Alon Cinamon (Ibex Investors) (31:20.437)
Thank you for the opportunity.
Alon Cinamon (Ibex Investors) (31:27.233)
So my email is out there on our website and on my LinkedIn. I'd be happy to speak with any startup founder that has any sort of Israeli-related, related, We, my job at IBEX is basically to invest in early stage founders that have some Israeli, that are Israeli-related. I'd be happy to speak to everyone who finds this useful and interesting just to exchange notes and.
to get to know each other. I'm very, very open and very looking to meet new people and exchange ideas and notes.
Tzakhi (32:06.735)
Thank you so much, and bye bye.
Alon Cinamon (Ibex Investors) (32:08.245)
Thank you, Sakhi.
