Yuval Ariav, Solo GP of Symbol Capital, on Pre-Consensus Investing, Why NextSilicon Could Be Israel's NVIDIA, and the $1.1 Trillion Market Hiding in Plain Sight

Speaker A: Decided to do a deal that I diligenced for 10 weeks and I had less than 12 hours to make up my mind.

Speaker B: Did you do it?

Speaker A: We want to make Symbol into the go to first check fund for the weird Israeli venture opportunities. Been somewhat active in theater production in New York, which also has helped me a great ton.

Speaker B: I didn't know that actors and backstage people were active investors. How has that helped you?

Speaker A: Uh, uh, you would be surprised. Really? You would be surprised. I think it can become one of the biggest Israeli companies ever. Ever.

Speaker B: In history.

Speaker A: In history.

Speaker B: That big is big.

Speaker A: I think it could be as real as Nvidia.

Speaker B: Welcome back to another episode of Invested. I'm thrilled to be here with Yuval Ariev of Symbol Capital. Welcome, Yuval.

Speaker A: Thank you. Good to see you.

Speaker B: We're continuing our, uh, custom of introducing Olive's competitors into the whole world so that they can pick up LPs and promote their portfolio companies. Now, uh, Symbol is actually a great collaborator and you've always been a great, uh, collaborator here in Israel. The venture system is still very collaborative. It's not as, uh, competitive as perhaps other places in the world. So it's great to have you. Yeah.

Speaker A: And it's been great working with you guys.

Speaker B: Yuval, I want to jump right in. And so in Olive, one of the things we always provided, uh, prided ourselves on, uh, was being non consensus. And the firm is designed around non consensus decision making. You define symbols kind of ethos as pre consensus.

Speaker A: What does that mean? When you talk about consensus, you usually mean in the VC community.

Speaker B: Right.

Speaker A: Um, and for us, uh, and for me, I think the best things that the best investments that I've made were investments where that were non consensus when they started. But then once they prove something or a couple of things that are very fundamental to business, everybody immediately understands them. And I think that stems from, um, if you think kind of the average vc, how they think about what can be big. A lot of it is just looking at comps. They're looking at other companies that grew very, very big and say, okay, does this look like that? And I think a lot of non consensus, pre consensus. And I think this is something we share is trying to imagine what this could be, despite not necessarily having that comp to point to. Uh, but once the business proves something, then everybody can imagine it.

Speaker B: So is this just a question of timing? Like, okay, at some point this will be consensus, but right now it's not?

Speaker A: I think there are definitely things that definitely pre consensus, uh, investments that have to do with timing. But a lot of it, whether it's timing, whether it's timing the company makes, has to do with proving something that folks don't think that the company can prove. Whether it's because uh, of past kind of common knowledge, common wisdom in the VC community that was maybe true for companies that started in 20, 20, 10, but does not yet hold now. And so you kind of need this refresher to the market of saying, oh, everybody thought that consumer fintech is X, but this was because a lot of folks today, they have the scars on their backs from companies that started maybe seven, eight, nine years ago. But then for companies today you say, well I'm kind of diving into this and I have a thesis for why these lessons don't hold anymore. And so a lot of pre consensus is the company having you betting on a company that has enough, two, three years to prove something that basically invalidates a lot of the common wisdom. And then once investors see that their imagination start coming kind of resets and they're thinking about what it could become.

Speaker B: So uh, Howard Marks is famous for his four quadrants, which you can have a good investment and the bad investment. You never make money on the bad investment, but even the good investment, you don't make money if you're in the consensus because it's priced in. I think that's not the point you're trying to make. The point you're trying to make is, I think is that people have frames of reference that are born of experience. And because their frame of reference is born of experience, they wouldn't understand that. Actually some of those things that might have been true 10 years or didn't work out 10 years ago, actually today could work out. Is that pre consensus?

Speaker A: I think that's a big part of it. I think what follows from there, and this is kind of going back to the Howard Marks thing, is that in today's VC landscape, which I think is generally very bifurcated, what does that mean? I mean that um, as opposed to maybe 15 years ago where um, if you looked at players in vc, I'm talking very, very early stage, to me it feels like there's two categories of VC now, um, which is a lot of it is like very obvious, momentum driven kind of very consensus stuff where tons of pools of capital, it's like they're very legible for them and they

Speaker B: kind of, you know, open AI anthropic.

Speaker A: Yes, but even, but, but even in our own, you know, market, you know, I think there are very, you know, classic central casting types of opportunities.

Speaker B: Cyber.

Speaker A: Yeah.

Speaker B: Okay.

Speaker A: Um, and then there's, and then there's things, uh, that are, that are not that. And I think one of the things that flows from pre consensus is that the deals are largely, um, they don't have the competitive dynamics. Um, and more importantly, as a vc, uh, I can tell you, uh, an anecdote that I think about six months ago or nine months ago, and in the same week, um, I decided to do a deal that I diligenced for 10 weeks, which is not something you tend to do in Israel for, like, very hot deals. You don't have that time. Um, and that deal was, you know, kind of sub 10m, uh, million valuation. And at the same week, a friend of mine just raised his seed 20 on an 80. Um, and I had less than 12 hours to make up my mind.

Speaker B: Did you do it?

Speaker A: No, not. Because I don't think it's going to be an amazing investment. I think it is going to be an amazing investment, but that's not the model that I do. My model is super high conviction, um, higher ownership than what I would get putting in half a million into that kind of round.

Speaker B: Um, so pre consensus in your mind then means it also gives you time to look at the deal and competition's not around because it's really out there. Right?

Speaker A: Yeah, that's a big part of it. Um, it's not that it's not about the competition per se. It's about that I like to go in with, for lack of a better term, co founder conviction. I want to feel that if I wasn't doing what I'm doing today, I would want to join these folks and to do what they're doing. As a co founder. Right. I think that makes me a good partner for the long run. I think that helps you, um, mitigate a lot of the, kind of the risk and a lot of the friction that might. Might arrive later on. Um, and I'm a. I'm. I'm a solo player. Right.

Speaker B: Say that you're a solo GP will come back to that.

Speaker A: I know, but also, like, I'm a. I'm a solo player or soul.

Speaker B: Like S O U L. Yes. O L. Right.

Speaker A: Correct, correct. Right.

Speaker B: You play from the heart.

Speaker A: Exactly, exactly.

Speaker B: Yeah. Ah. Um, part of my job on this is to translate like Hebrew slang into English. That's really why this one, because I host a podcast.

Speaker A: It's super important how to do a little cultural translation.

Speaker B: Yeah.

Speaker A: And so I think. And that's a big part of it. And I think for me it's important to know the people. It's important to really get conviction on the market. Uh, I don't look at the product as much initially because, you know, nine times out of 10, the product you see when they pitch you is, you know, maybe graft one of five. What's actually going to, uh, you know, we kind of mentioned, we kind of talked about Jiga earlier. That's a really good example of this.

Speaker B: Yeah, we'll come back to that.

Speaker A: So we'll come back to that.

Speaker B: But let me ask you this now. So when you say you want to be the co founder, what you've I think basically says the way you make decisions is based on the team and not on anything else. Is that a fair comment?

Speaker A: Um, not only. Uh, so first of all, just to put a finer point on it, I don't want to be the co founder. Right. I want to go in knowing that if I didn't do what I am doing today, I have the level of conviction that this is what I want to spend. I would want to spend my time.

Speaker B: You want to have conviction, but I

Speaker A: don't want to work that hard. Exactly. That's why I'm a vc.

Speaker B: Right.

Speaker A: I think uh, the team is a big part of it, but also the market opportunity is a big part of it.

Speaker B: Right.

Speaker A: Because you want to know that where you're working with these folks, you do something that's actually going to be meaningful both in terms of impact and financially. Um, and you want to make sure that you're spending your time on the right things.

Speaker B: So you're a solo gp. Correct? Correct. Okay. How big is the fundamental?

Speaker A: Uh, so our fund one was 50, our fund two, we're just raising it now. It's probably going to end up being 75.

Speaker B: 75 million. Why is that the right size? So one of these you mentioned earlier was like this. The venture market's bifurcated. Correct. Which I kind of agree with. Um, and you've got these giant pools of capital then call it. You've got these funds. Although we're a dying breed, like olive, which is in the 2 to 300 range. M. There's true and fear of them and people raising growth funds and whatnot. Ah. And then there's your 50, $75 million. Why is that the right size fund

Speaker A: for what you're trying to.

Speaker B: Right.

Speaker A: So for me everything flows from a strategy which is I want symbol to become. We're not an early stage fund. We're a first check fund.

Speaker B: Mhm.

Speaker A: By definition, we do the first Price ground or first safe in a company. We have obviously reserves or follow ons, but we will not first invest in a company that's. Mhm. Mm. And then we want to make Symbol into the go to first check fund for the weird Israeli venture opportunities. Right. The non consensus, pre consensus stuff.

Speaker B: We now have non consensus, pre consensus and weird. I'm um, collecting.

Speaker A: Correct? Yes, it's a collecting synonyms. Amazing. And I think what that means is again what we tend to do is we are, the way we construct our portfolio is we have you know, 16 to 18 investments. We for most of them we lead or co lead. So we want to buy you know, reasonably high ownership upfront. We believe that in Israel generally, you know, smaller portfolios with higher ownership tend to pay off better. Can talk about why that is. Um, and so if you look at the type of deal that we do at Precedent Seed, if you look at the checks we want to write, if you look at the uh, uh, valuations that were in the market and the ownership target targets, it comes out to about you know, an average, let's say $2 million on average or an initial check, you know, factor in you know, X percent reserves, you come up to about these numbers. So in fund one, our average, um, our average ownership at entry was uh, we targeted 15%, ended um, up being 16%. Uh, fund two, the reason why it's larger, it's probably going to be maybe two more investments and we're gonna, we wanna up the 15 to about 20. That comes out to about 75.

Speaker B: You're not changing the check size?

Speaker A: I think check sizes are going to be slightly larger. I can tell you in fund one there were uh, investments that we've made that we led. We didn't co lead. We led. But then because we didn't want to put in large enough checks up front, we put maybe our cap was like three and a half. Right. Million, but the round maybe was five. I would have wanted to put four and a half if I could. Right. And so I think the, the average will is actually going to increase by a bit and the size of the portfolio is going to increase.

Speaker B: You're moving up soon enough you'll have a growth fund.

Speaker A: Exactly. Tomorrow. Yes, yes, yes, yes.

Speaker B: Why is the fund called Symbol?

Speaker A: Um, so in line with the strategy. This is. It's based on uh, it's based on a lot of things and part of it is uh. So what I was looking at a fund name is I wanted a name that was working in English and in Hebrew. Mm. Um, I Wanted a name that can stand by itself. It doesn't have to be Symbol Ventures or it can be just that name, kind of like Olive. Um, I wanted a name where the domain was, was, was, was there.

Speaker B: And then I wanted Symbol Dot.

Speaker A: Well, Symbol dot vc. I actually almost got the dot com. There is a very, very interesting domain negotiation story. We can go into.

Speaker B: No, do it right now.

Speaker A: All right. So I, uh, really wanted to buy symbol.com. apparently, uh, it's one of the first 50 domains ever to be written in the world, which added about a million and a half dollars to the asking price.

Speaker B: However, that's over one year's management fee.

Speaker A: However, I actually almost got it for $10,000. So I did a whole history, uh, dissertation on this domain. So it was uh, it was initially registered by a British company that did, um, fast barcode scanner. That company was acquired by a company called Zebra, which is still up until this day. And that company sold its IP portfolio to Motorola. And so when I did this, this is like geology, not his, uh, geology of, uh, internal geology. And so when I finished all of this, I figured out who, the person who is the IP portfolio manager within Motorola, who, who owns this, and I wrote him directly. And we started negotiating and I didn't under, I didn't. We kind of started throwing numbers. It was like, maybe it's 20, maybe it's 10. And I did not believe that I was going to make this deal. It was like. Because I knew today it's if you, if you uh, look at how much it's uh, it's value, it's like two and a half million dollars. Um, and then he went cold on me, or she went cold on me. Um, and apparently at some point she wrote me back saying something like, oh, we decided to reevaluate our assets and we're not in position to sell now on to our channel.

Speaker B: We discovered it's worth more than the clamshell.

Speaker A: Exactly. Exactly.

Speaker B: If you're interested in finding out ahead of time what's going on in Israeli tech, what the latest trends are, who's breaking not only news, but breaking the trend lines, then you want to subscribe to Alif's newsletter and you can sign up right in the show notes in the description of the show. Please subscribe to the newsletter. So you Symbol vc.

Speaker A: So it's Symbol vc. And so the reason why I went with Symbol, besides all the things I said is based on a very kind of very personal story. I didn't grow up in Israel, I grew up in Brazil. And in Spain. And Spain. And grew up in an international school. And uh, when I was, I think in 10th grade, maybe 9th grade, um, one of the things they taught us in every class was critical, uh, thinking, which I wish they would do more of today in school.

Speaker B: Yeah, Spain. Oh, I was gonna say Spain's not very good at critical thinking.

Speaker A: Yeah, yeah. But this was, yeah, yes. This was actually the reason why I found myself in that school because it was not a Spanish education system. Um, but one day she gave us homework and she said, uh, your homework is to write a critical thinking essay, pick one truth that everybody believes and write an essay convincing us why that's not the truth.

Speaker B: Mhm.

Speaker A: Um, and the truth that I picked at the time was that the wheel was the greatest invention in the history of humanity. Um, and I said that I thought that was actually not true. I thought what was true is that symbols were the greatest invention. So that ability not just to memorialize knowledge, but the ability to take something that's a very abstract, maybe complicated, uh, concept and denote it in a way that streamlines communication and compresses it, I thought was a very big thing. Um, and when I thought about the, the pre. Consensus stuff, which a lot of it, as you know, is taking a lot of things that a ton of people believe is true and kind of being a bit of a heretic and say maybe that does not hold anymore, that felt like a very, uh, apt name.

Speaker B: Before we come back to your portfolio, I need to ask you, you're also a professor at Columbia, correct? How do you juggle being a professor and being a venture capitalist? And by the way, aren't those two very different skills? The only guy I think I know who was like a professor for real and a venture capitalist intel is Phil de Hardiman at Bessemer. Andy Ratcliffe went off and did it afterwards when he was finished. A benchmark. Um, obviously people have taught along the way classes, but I think they are almost a full time professor. The only acronym has fell to heart of me.

Speaker A: Interesting. So first off, I'm not a full time professor. So the way I do it today, this is actually going to be my 11th year teaching is I teach once, sometimes twice a year. Um, and I teach what's called term A at Columbia, which means that instead of uh, teaching one academic hour a week for 12 weeks, teach twice back to back for six weeks. And so what I will usually do is I will move to New York for six to eight weeks, but that will happen once, maybe twice a year. I'm Very passionate about what I teach. And I think it informs a lot of my investment decisions can go into that, uh, uh, soon. And basically I teach the way in which the spread of data and AI and technology changes the way both, um, traditional industries, but also societies behave, which I think obviously when you're trying to underwrite something decade in advance, two decades in advance, that helps. But moreover, I'm putting conveniently the Israeli part of it, which we'll get to in a minute, to the side. Um, the Columbia experience has allowed me to introduce a ton of mutations into my network that would never have done otherwise. An example, um, just as an example, out of my $50 million fund, one $9 million came from, uh, investor, uh, management, family offices and other investors that my students went to work at later. Uh, one of my.

Speaker B: You're educating the cotter of LPs.

Speaker A: Exactly, exactly. And you know what? Uh, uh, it's not even what, uh, I aim to do, but is there

Speaker B: any correlation between the grades you give them and the fact they invest in the fund and I.

Speaker A: Of course. That's how I have the grading curve.

Speaker B: Yeah.

Speaker A: I'll give you another example. I think in my first or second year teaching, one of my students is now the guy who manages all of the financial services groups for all of the Amazon vendors at Amazon. Right. I invest a ton in, um, financial services for. In general and also for supply chain. Obviously a very good contact. I can go on and on. But my obviously being a VC and being any type of businessman today is a very networked endeavor. And I feel like when you're here in Israel, the people you'll be able to network into are largely the people that Israelis will be able to network into because you're getting those interests from Israelis. And so I'm always looking for opportunities to what I call introduce mutations into my network. So trying to get to people at random or to places where I will meet people in random. Just expand my network into places I've never been to.

Speaker B: Where other places do you randomly meet people other than Columbia University?

Speaker A: So that's been very, uh, that's been very good. Um, I, in the last, uh, five years have been somewhat active in theater production in New York, which also has helped me a great ton.

Speaker B: Um, I didn't know that actors and backstage people were active investors. How has that helped you?

Speaker A: Uh, uh, you would be surprised.

Speaker B: Really?

Speaker A: You would be surprised. And maybe not the, Maybe not the, uh, maybe not the actors, but there is a whole, um, um, uh, industry that is very similar to VC in Terms of thinking, outcome, distribution, um, trying to get an edge due to, uh, with information that attracts very, very smart people.

Speaker B: Hits in theater even, I think, less frequent than hits in venture capital.

Speaker A: Correct. And their upside is not as big as. Yeah, yeah.

Speaker B: It's a. It's a highly, uh, uh, asymmetric industry. Or it's the wrong way. It's got. It's got a T. It's not even that asymmetric at the end of the day, but it's, uh.

Speaker A: Yeah. The other thing.

Speaker B: One Hamilton in a lifetime.

Speaker A: Correct. And also, if you're talking about any. Any, uh, uh, market, uh, that matters, both in London and in New York, um, but also in other places, it is the case that out of the dozens per market, viable commercial theaters.

Speaker B: Yeah.

Speaker A: Uh, they're all controlled by maybe three or four, uh, families, production companies. And so the bottleneck you have a lot of. They have a lot of pricing power.

Speaker B: So who's the most interesting person you met in theater that was helpful to your venture career?

Speaker A: I met. So I met, uh, the director of Hadestown, which is, uh. Which is one of my favorite. My, uh, favorite pieces of art over the last, uh, 10, 15 years.

Speaker B: What is your favorite Broadway show?

Speaker A: Probably Hadestown.

Speaker B: Okay. Yeah.

Speaker A: I think from m. From an artistic perspective, it's probably my favorite. Um, it's, uh. I don't know if. I don't know if you've seen it, but it's. It's a. I, uh, love how I. I love words and writing. I think there was a lot of. A lot of power and a lot of intelligence in taking very complex. Yes.

Speaker B: Symbol.

Speaker A: Yes. Very complex, um, themes and. And truths and putting them into very small, you know, into very, uh, succinct way of communicating. Um, and I think that play does excellent work, exploring a ton of different themes and overlaying them in a way that kind of feels like almost invisible. In a good way.

Speaker B: Given the fact that you like Succinct Communications, is podcast a good medium?

Speaker A: I think there is a more interesting question, which is one of the things I'm struggling with is, you know, we're living in a world that has more and more complexity.

Speaker B: Right.

Speaker A: Because time goes on. We're building on top of the things we've built and perfected. And I think the thing that, for me is a question. It's a question when I teach at Columbia as well, is are we as people collectively, uh, losing our attention span and what that does. And that's part of why I like Very Succinct communication.

Speaker B: Yes. This Is a question. You don't think this is true? No, it's true. Okay.

Speaker A: Yeah. Uh, but part of the reason why I liked communication, why I think it's so important, it's the ability to cut

Speaker B: through

Speaker A: a ton of noise that exists out there that only goes, uh, up and up.

Speaker B: Do you write investment memos that simple?

Speaker A: Yes, but they're very. Do you know, smart, uh, brevity.

Speaker B: I mean, I know the term smart

Speaker A: brevity, but do you know the format? You read Axios, right?

Speaker B: I do read Access.

Speaker A: You know, Axios has, have their format.

Speaker B: I try. I shouldn't say I read Axios when it's sent to me. I read Access.

Speaker A: Okay, but you know that they have a very, like a very. Right, that's. There is a format.

Speaker B: Four bullets. Yeah.

Speaker A: So I, so I try to write it in that, in that way.

Speaker B: Um, how long is your investment memo?

Speaker A: Depends, but it's a few pages.

Speaker B: Have you gone back and looked at your investment memos? And how, how good are you at it?

Speaker A: Um, is it accurate? Do you identify the right issues for the large parts? I think my mistakes were something that I didn't even think about, uh, versus something that I thought about and I got wrong.

Speaker B: So you're always right if you think about it, but if you don't think about it.

Speaker A: I try, yes. So every investment memo I try to, it ends with, um, a risk analysis. Right. Like, here are the risks I'm seeing. What are the likelihood, what is the severity? What do you do to mitigate when down the road, can you catch it? So you can decide on a follow on investment or something like that. Right. But most things were not, you know, it's things you couldn't even think about.

Speaker B: Like, do you have a similar section in the memo on upsides?

Speaker A: The whole memo is based on upsides.

Speaker B: Got it.

Speaker A: So I, I always take the very maximalist view of. I try to take the maximalist view because to me that's, that's, that's the business. That's how I think about investments.

Speaker B: Right.

Speaker A: You gotta, you know, I'm, I try to identify all the places where I think this could fail and then see if I believe that you can cross them in terms of belief. But then I try to be very optimistic about that, try to say, okay, if all this goes wrong, this could be $100 million company.

Speaker B: Give us the TLDR, the smart brevity.

Speaker A: On your course at Columbia, what technology has done in the last 50 years, you could give countless examples of how it's changed business but at least one of the models that I, uh, teach, uh, and I believe in is that each and every one of these advancements, what it ultimately leads to is that you can just compound things faster.

Speaker B: Mm.

Speaker A: Okay. Once you look at that through that framework, you can then ask yourself, well, how does hiring impact that compounding? How does better data impact the compounding? How does the way you store data impact compounding? How does fitting your data to the business model, all that. And then the logical next thing that you were talking about is historically a lot of that compounding has been, um, either held back or controlled by regulators.

Speaker B: Mhm.

Speaker A: Not necessarily by the way, regulators who are, uh, government entities. Today the biggest data regulator in the world is Apple. M. But at least in the past, because compounding was uh, less profound and less stronger than it is today, what that meant is that regulators had way more time to react. Uh, and so basically what the course is, is trying to take this framework and then, uh, uh, first look at the last 20, 25 years through that lens and then look at things that are happening now and trying to say, well, if you buy into this framework and you buy into all of these assumptions about the businesses today, do you think is going to happen?

Speaker B: Uh, so how to think about a world in which compounding, for argument's sake, is not 5% a year, but 8% a year. It's like what Elon Musk said the other day, that he thinks that the economy can 10x itself in the next 10 years. Um, just because the rate of change is getting that much faster. What happens when the rate of change gets this fast?

Speaker A: I think that's more of a sociological problem because I think my sense is that the rate of compounding doesn't work for everybody.

Speaker B: Mhm.

Speaker A: Right. It works for very increasingly smaller number of people more than it does to others.

Speaker B: What does it mean? It works for a small number of people. What does that mean?

Speaker A: Um, what is compounding? Compounding is you have something, you have an asset, right? And you can make that asset more valuable by doing transactions with the market. M. And that asset could be wealth, it could be stock, it could be your opinion, could be your political power. Right. It's not just in financial, uh, domain. Um, and the more today at least, the more your pre existing asset, uh, is larger, is more diversified, the more you can compound, the faster you can compound and the yield you can get is better.

Speaker B: Say this again,

Speaker A: the more you have now, the faster you can compound. The more I have, the more I have. Yes, yes. If you have $100 million that you can deploy. You can probably compound that faster. Not just because you have more transactions than you could with the market. And so, uh, the base is higher. Um, but also the rate is higher.

Speaker B: The rate of compounding. Yes. And that's not just true of financial assets in your business.

Speaker A: It's not, it's not.

Speaker B: It's true of social capital.

Speaker A: Social capital. It's true of uh, what I, it's true of um, what I call opinion capital, which is if you have a million follower, um, uh, account on Twitter, you're going to compound that way quicker. Mhm. Because that's how the algorithm works, that's how psychology works. Mhm. Than if you have a thousand.

Speaker B: Right. This is just true. The world is more networked today. It was true. Viruses too. Right.

Speaker A: Think about it is because of two

Speaker B: things of IQ as well. Right. You know, the Flint, the Flynn effect of on iq that IQ is compounding increasing.

Speaker A: Yes.

Speaker B: Because you have just more Internet works, more people can find some more people. Correct theory? Correct.

Speaker A: Correct. Um, yeah, but, but I, I don't think people think that because of compounding of iq in a hundred years you're going to have people with 10,000 IQ.

Speaker B: Right.

Speaker A: Right. So I think the rate is much lower. But, and, and so what happens is you get um, uh, what that just means is that yes, maybe the economy is going to like Elon says, uh, grow 10x 10,000x in the next. However many that's probably going to disproportionately serve, you know, obviously. And so that's what the course is

Speaker B: kind of on um, uh, network effects and kind of how advantage will centralize over time due to compounding.

Speaker A: Correct. And whether. What are some things that could cause it to, could cause that to break.

Speaker B: So what are some examples of something that would cause that to break?

Speaker A: Historically, uh, that's been, you know, uh, uh, uh, masses, uh, that are rising. It's been social unrest. Yes, yes.

Speaker B: Regulation.

Speaker A: Yes, yes. These are things.

Speaker B: Standard Oil.

Speaker A: Correct, correct.

Speaker B: What else?

Speaker A: Um, war. I think war is a byproduct of that. It's not a direct byproduct, but it is definitely a byproduct.

Speaker B: Right.

Speaker A: Whenever you think the system can't work for you anymore, you can't get to not even the top. But uh, then my sense is if enough people think that they can mobilize their collective power and do something about it.

Speaker B: And when's that happening? Are we already in it?

Speaker A: I think to an extent we're already in it.

Speaker B: We're already in it. Yeah. So give us some examples of that happening already right now.

Speaker A: Um, Mamdani in New York, I think is one. If you're looking across, um,

Speaker B: he is a reaction, in your opinion, to other people enjoying exponential outcomes, or he is able to mobilize exponentially because of his charisma. Both.

Speaker A: Both.

Speaker B: Okay.

Speaker A: Yes. Um, and I think on the right, uh, side of the U.S. uh, political, uh, you have, um, people who would, in no other normal situation would have the following that they have because they were able to compound a lot of their opinion, uh, capital, um, through these networked, um, Tucker Carlson is the example. You think they're an example? That's kind of so many. Yeah.

Speaker B: Okay.

Speaker A: Yeah.

Speaker B: Um, but is social unrest. Are we here already for social unrest against this?

Speaker A: It's hard to say, um, what happens

Speaker B: when the masses rise up against this exponentialization of us.

Speaker A: Look, I think in democracy, the natural outlet of that will be elections. It will be a swing in which you can argue we've seen some. In Trump, you can argue we're going to see maybe with. If they're on Democratic, they're going to advance some DSA folks. You can argue that. Um, and I think if enough time passes where even through democracy, you don't think you can have that, then maybe it's something that's more political. More political violence, more. Yeah.

Speaker B: Future Columbia. Do you think what happened to Colombia's reaction to that? Or is that something else?

Speaker A: No, I don't think. I think.

Speaker B: Look what happened in Colombia. There you're on ground zero of Colombia. What happened? Tell us about that.

Speaker A: So about a year ago I remembered that I never watched the Sopranos and I started watching it.

Speaker B: I didn't remember. I didn't watch the Sopranos because, uh, that's something I ever wanted to remember. Yeah, I've watched.

Speaker A: I had like, I had like a list of, uh, uh, shows that I wanted to watch or like really good shows. And, um. And I kind of went through the

Speaker B: list and I binge watched the Sopranos.

Speaker A: I binge watched the Sopranos.

Speaker B: Okay.

Speaker A: There is an episode called Columbus Day.

Speaker B: Mhm.

Speaker A: Which in this episode aired in mid-1999. Okay, okay.

Speaker B: 27 years ago.

Speaker A: Yes. Where his daughter goes to Colombia and, um, she comes back and they talk about Columbus Day and she tells them she doesn't want to call it Columbus Day. It's indigenous people day. Um, and they get into, uh, a ton of, uh, discussion about how Columbus killed the indigenous and he was a colonizer. And you could see things that are being said today that have Existed you know, back then, you know, 27 years ago. And so I think. And Colombia has always been I think ah, you know, kind of like ah. M on the very extreme of. Of uh. Of uh um. Social.

Speaker B: Uh.

Speaker A: Social movements.

Speaker B: Yeah.

Speaker A: I think fundamentally what happened at Columbia and I'm not one of these folks who say we lost the US Campuses because we lost we meaning we Israelis.

Speaker B: Right.

Speaker A: Yeah. Because look, we lost the Ivy Leagues.

Speaker B: Right.

Speaker A: But I have people that I work with in the US Whose kids go to you know, universities in Texas and then you know, Vanderbilt. Yeah. And you know, they either between, you know, the campus doesn't care. Mhm. Or, or you know, they're slightly uh, uh, pro Israel. But I gotta tell you, even at Colombia. Right. If you look at the, if I'm not mistaken, the distribution of political opinion at Colombia is roughly um. It's Roughly I think 65% liberal, non progressive liberal. Mhm. Clinton Democrat. Mhm. Type, um. 20% uh, conservative and 15% um, progressive.

Speaker B: Mhm. Right.

Speaker A: You wouldn't know it from what you've read about Columbia.

Speaker B: Right.

Speaker A: I teach at the business school.

Speaker B: Yeah.

Speaker A: Most people are.

Speaker B: But the problem actually find all 20% of the conservatives are probably at the business school and the stem.

Speaker A: Correct.

Speaker B: Liberal arts is focused.

Speaker A: Correct. Although a ton of um. A ton of uh, uh. The folks at a business school are first generation. They're not necessarily conservative. The folks who are second, third or kind of uh. Us forever. Yeah, you're right. But a ton of them are not.

Speaker B: So what happened in Colombia? You were there.

Speaker A: I think it's a combination of um, I would say neglect of the academic duty.

Speaker B: What does that mean?

Speaker A: For me? I think a lot of the responsibility for what the academy needs to do. Mhm.

Speaker B: Um.

Speaker A: Is teach people how to think. Right. And I don't think you can teach people how to think without repeatedly showing them uh, competing views m And training them on how to think critically and how to change your opinion and how to steelman yourself. And generally speaking, I don't think it's not all the academia. I think in these schools which are largely social sciences, um, that they became

Speaker B: communist or socialist indoctrination systems instead of free thinking institutions.

Speaker A: Even if not that, the fact that you're. Even if you don't have uh, uh, um. A professor that actively preaches a specific viewpoint every time, every class. The fact that you are selecting a very narrow subset of uh, uh, uh, reading materials. The fact that the course reacts to only a very narrow subset of recent historical events. That matters.

Speaker B: Why do you Think the serpent.

Speaker A: As I said, I think generally speaking the university has lost that e thought. I think a big part of it is in terms of who you picked for tenure and how you pick them for tenure. Um, and I think kind of like this, I think happened in academia sooner than it happened, um, or earlier than it happened in uh, media and news media. People donned an activist costume, they went into an activist Persona. Right. Um, and they prioritized that Persona over their um, let's call it professional, uh, reason for being.

Speaker B: Why would they do that?

Speaker A: Because I think that gives you more identity and I think people needed identity. Yeah.

Speaker B: Why are they so lost?

Speaker A: I think generally in the west we've somehow. So I. Okay, uh, I'll tell you in the past, largely because I think when we were as a society, our view to the world was more editorialized through a very small number of uh, media outlets.

Speaker B: Mhm.

Speaker A: Um, you had taste makers which generally could nudge us into identity. And I think part of that is the sense of the importance of community. Part of that is in the things that you read and saw. There was an echo of the general values of society. You were holding people in power and in business and government to account over these values. Um, and I think a big part of that was lost when we decided that we don't want any middlemen. Um, for me at least, and this has some guest appearance on my course. When we talk about um, uh, kind of data and people segmentation and what that's doing. Identity is. I'm not going to say anything that's too novel here but obviously identity corresponds to what we feel about what we feel is good or evil. Because identity is values and ton of value, not all of them, but a lot of them have um, a moral dimension to them. But I think the opposite is also true. Which is when our identity is weak, either our community identity or national identity or whatever, sometimes perceived evil can very easily hijack our identity. And I think to your question earlier, I think that is a lot of what's going on. That's definitely what's going on today with the younger generations. Right. I think in Israel, I wouldn't say we're immune from it, but the fact that we are living in a very uh, tough neighborhood and that our history has been, you know, Israeli society is on the very, very low, uh, like low bottom rung of the Maslow's pyramid of needs. And I think that grounds you in identity. It grounds you in, you know, an actual reason for living. And I think, you know, I keep Telling people, I think if you're. If you're my age, right. Or if you're, let's say, 10 years younger, you're in your 30s in the U.S. you probably don't. You were probably not terribly scarred by 9, 11. Right. And so you kind of lived your life not really understanding that there is real evil in the world. Um, and I think what that does over time, especially with what's happening with social media today to one's sense of identity, it causes it to fracture. To fracture, sorry. Um, and then you get culture wars, you get identity politics, you get all that.

Speaker B: I was thinking, uh, earlier this week, we're talking now, as the talks are going on between Iran and the United States and Lucerne. So on Saturday, Shabbat, I was sitting around in my house and I was thinking about this topic. Literally, I was asking myself, growing up in New York, what were the incidents that seared some of my conscience? And one of them was, um, the marching of 51. I think it was American employees of the embassy out blindfolded.

Speaker A: I remember in 1979.

Speaker B: 1979, out of the, uh, U.S. embassy in Iran. I think as an American, that was a humiliating, uh, um, scene. And then I think about, like a year later, the United States winning the Olympic hockey game against, you know, all odds of Russia, the Miracle team. Um, and that was also a searing event. But it was, it was in context of Ronald Reagan fighting the Russians and Ayatollah Khomeini, these evil Iranians marching out American civilians, you know, blindfolded. Um, and those are steering ranch. But nobody today remembers these things. And 9, 11, obviously, is another one, uh, for Americans. But to your point, in Israel, I don't think we have that confusion.

Speaker A: Do you remember as a kid when you, when you saw that on TV or on read the news, but do you remember the channel you watched? Do you remember the network you watch it on?

Speaker B: I don't know if I remember the network I watched it on, but I definitely remember the network I watched, uh, the shooting of Ronald Reagan on.

Speaker A: Yeah.

Speaker B: And it was cbs. I remember that.

Speaker A: And, uh, so the interesting thing to what I said earlier, which is take yourself back to that time. There must have been maybe 10 networks you could have consumed that data, that information on, and they wouldn't say two different things from each other.

Speaker B: Not terribly.

Speaker A: Right. Not terribly. Which is not the case today. You look at, you look at Charlie Kirk, you look at the Trump trial assassination, you know, the. What happened just now with Vance in, uh, in, uh, in Switzerland. Yeah, right. You could get, you know, just completely different narratives.

Speaker B: So you think, you think identity is downstream of media?

Speaker A: Absolutely, yeah. Interesting.

Speaker B: Yeah. Give, um, us your background. I know we're like 45 minutes in this podcast and. Sure, sure. But give us your like full background and I want to talk about a few portfolio companies. Sure. Before we wrap.

Speaker A: Sure. So, um, I had what I now realize is the fortune of being, uh, born here in Israel, but actually not spending all of my early life here. My parents are both agronomists. Um, and when I was a kid they got a job working in Brazil in the jungle. Uh, that's where I grew up until I was six. Went back to Israel to do primary school. Um, my dad got a job in Madrid in Spain. His uh, um, uh, condition was that in Spain, um, they don't teach you English. And so my dad's condition was that if we're gonna move, um, his kids are gonna go to an English speaking school, of which there were two. There was a British school and American school. And so I ended up in an American school. International. Amazing, amazing, amazing, uh, uh, experience. I think it shaped a lot of what I do today. M, uh, went back to Israel to finish bad Ruyot.

Speaker B: That's matriculation exams. Yes.

Speaker A: Joined, um, the army. Um, initially I really wanted to be a fighter pilot because I was an 80s kid. Ended up, uh, being taken, uh, to an intelligence unit as a translator because I spoke a ton of languages at that point. Two days later my CO came to me and said, oh, by the way, uh, we're canceling the translation post. And this was. I was supposed to be a translator in a unit that was full of um, um, math and computer science with us. And they said, well, you're here, we don't really know what to do with you, um, but you can stay. Um, and then, you know, I was great. And two weeks later I found myself being horribly bored. I started teaching myself, uh, programming and reverse engineering. At some point Elad, the CEO of Nexilicon, came into uh, my room with a giant book of uh, Windows nt, uh, internals reference. He said, here, study this. And so I ended up staying. Ten years was, uh, an incredible time. Uh, both from just a mission perspective, but you get to work with some of the brightest minds, the toughest problems.

Speaker B: Um,

Speaker A: it was until today the most intellectually exhilarating time of my life. Um, left the service at 27, joined up a couple of friends who started Onavo, which was a mobile data analytics company. One of the first one was started as a B2C company. Then uh, ended up being hybrid B2B. B2C. Uh, ran product engineering there for a while, left before the acquisition started Fundbox.

Speaker B: The acquisition by Facebook.

Speaker A: By Facebook, yes.

Speaker B: Many people say that's a Facebook fear. I had to get in the app store. You should say that also. I won't ask you.

Speaker A: Yes. Uh, it's funny because when I started teaching at Columbia, which was 2016, uh, I taught fall semesters which started at September and like clockwork for like five years straight. Every last week of August the Wall Street Journal did an expose on Facebook and Onavo and some other thing that did, which was a great segue into the. It was incredible. Um, then I started Fundbox. Ah. Um, which was uh, a very, very fast growing Israeli fintech company. Still private Breakeven, kind of doing quite well. Ran product engineering for both these companies. Also ran marketing um, for Fundbox. Basically. Um, uh, uh, our team invented Embedded Finance in 2014 or we took the Fundbox, uh, the Fundbox product and sold it as an API to intuit QuickBooks. Just an introgradient that's live until today. And then in the last eight years I've been investing. Um, I started as an angel investor and a general partner in a fund called Lion Bird. Um, and then five years ago I set up Symbol.

Speaker B: So you mentioned it a lot from Next Silicon. So let's talk about a couple of portfolio companies. So why did you invest in Next? First of all, a lot was on the podcast.

Speaker A: Yeah.

Speaker B: So uh, why'd you invest in Next Silicon? What about it? As pre. Consensus.

Speaker A: All right, so Next Silicon was a, uh, was an interesting investment. So originally, um, Elad asked me to be the CEO of the company and to be his co founder.

Speaker B: There you go again. What, it's that co founder thing.

Speaker A: I was kind of tempted, but at the time I had just committed to be a GP at Landberg and committed to LPs. And I'm not a type of person to, you know, kind of commit to that and then uh, and then say uh, well I have something else going. But um, at the time, I don't know if you remember that time, there was a really interesting. There was a bunch of companies started, all of which um, wanted to do AI, but not AI in the LLM sense, but kind of like AI inference M in the 2018, 2019 sense. Um, and the thesis back then was that uh, if that's what you did, um, you had a very, very small number of companies who could be potential buyers, uh, for Product, potential customers. Right. And basically just the hyperscalers. And they were very over uh, being pitched by you know, asic, uh, uh, companies to um, do that. And so we said we need a way to prove this technology. And also that technology is very, very specific. We can kind of talk about that, but we need a way to prove that in a way that's not dependent on um, uh, on the hyperscalers. Very few investors got that approach.

Speaker B: Right.

Speaker A: And I think that if the company went ahead and did AI first it probably wouldn't have existed today. Um, the other thing is that the technical approach there is very difficult to get your head around. Right. Most hardware investors really understand taking a specific computational challenge and then dedicating all of your R and D to specifically and drastically optimizing that and then saying well if you do that then your chip is going to be this much better. Um, because that's the way everybody does. Right. The next silicon architecture is. Architecture is something that no other to my knowledge besides maybe one uh, startup is doing. And so that was also a. So the risk that investors took wasn't just a strategy risk, it was also a technical risk. And I think once kind of rough circuit a series A, which is when Aleph invested, when we built the um, uh, uh, the simulator, um, and it was slightly derisk the tech then um, everybody started to get it.

Speaker B: Elad said I should ask you by the way, um, why did you turn down his offer to be the CEO? Like what were you thinking?

Speaker A: Yeah, to be honest I think that if I hadn't turned him down, I think it's hard for me to imagine doing a better job than him,

Speaker B: um,

Speaker A: that company in terms of the details that you have to be able to attend to.

Speaker B: Yeah.

Speaker A: Um, not of the technology, not just of the technology, but how that technology relates to the business needs of the customers is something that I know I can probably count on, you know like single hand the people who I know and I've worked with some very, very clever people who will be able to contain all of that complexity and mobilize a team of hundreds of people around.

Speaker B: Dan Loeb was also an investor in the company. Wrote to me like a week ago, he thinks this could become the next Cerebras. Do you agree?

Speaker A: Yes, I think it can become one of the biggest Israeli companies ever.

Speaker B: Ever. In history.

Speaker A: In history.

Speaker B: How big is big?

Speaker A: I think it could be as real as Nvidia.

Speaker B: What's exponential about it? You think next silicon could be Israel's Nvidia. What's instead of what's exponential, what's the catalyst for that?

Speaker A: When, when I say Israel is Nvidia, I don't mean it can be like uh, however many trillion dollar company tomorrow.

Speaker B: Right? That's the expectation you just created. I just want to point that out. It is.

Speaker A: You know what I mean is he's

Speaker B: neck and neck with Elon now, I think.

Speaker A: Well, yes, obviously. And, and, and I think you can take him. Um, I think that if you look at the big semi companies, right, none of them are a one ASIC company, right. They're platform companies. And so you know, uh, what a CPU and what a GPU is and why they're different and why each one is good for different use assets. Right. And I think the very exciting thing for me about NextSilicon is that it's a platform company.

Speaker B: Mhm.

Speaker A: Right. And I think it's a platform company that is uniquely, whose architecture is uniquely built for the challenges that we face today. Uh, let me be specific about it. Let me be specific about it. If you look at what's happening today in the world of compute, there are two competing timelines. Uh, m. All right, there is the timeline of how long, once you've made a decision that you want to build a chip to optimize a specific algorithm or computational building block of an algorithm, how long from that decision to the fact that you can have something back and you can start working on it, how long that takes? Mhm. If you look at the length of that process, it does not materially move in the last 25 years. Mhm. Still takes a few years. You have to move a lot of atoms, a lot of. If you look at how many new computational building blocks and algorithms we are thinking up and we are using, that looks like exponential growth. And so the problem is that if today you decide that you want to, um, optimize a computational, uh, building block in the latest, uh, OpenAI sub algorithm sub model, by the time, in three, four years that that's going to be back in your hands, that could have been completely relevant.

Speaker B: Right.

Speaker A: And so it's not only that Next silicon is a different architecture as it's an architecture with zero time to market in terms of you don't need to build a new chip every time you have a new algorithm. Right. And I think. And if you look at the other,

Speaker B: the chip matches itself to the software.

Speaker A: Yeah, exactly. And that to me is a. If you look at all the platforms that exist, there are not that many. It's the only platform that has that.

Speaker B: Right.

Speaker A: And so I think we're going to be uh, uh, uh, as time goes on, more hard pressed to future proof our hardware. And I think to my knowledge Next Silicon is the only platform that allows that.

Speaker B: So I guess after you talk about Next Silicon Israel's Nvidia multitrillion dollar company, it's hard to answer the next question. Which, what's another company you want to talk about? Your portfolio or the next best or the one that will.

Speaker A: Yes.

Speaker B: Outrun that.

Speaker A: So another one that we're uh, that we're uh, uh, investing uh, together is Jigga.

Speaker B: Yeah.

Speaker A: Which um, which to me I think it's a very special company. Yeah.

Speaker B: Why don't you tell everyone what it does. Sure. And then explain what was pre consensus about it.

Speaker A: Sure, sure, sure. That that's actually a very, very good um, It's a very good uh, uh, initial story. So what you could does basically is um, every time you need to buy hardware, uh, as an organization that's not off the shelf, you're not buying it with SKU needs somebody to manufacture it for you. Um, that procurement process is very, very uh, difficult, long and it takes a ton of resources. And why? Because uh, it's a very technical procurement process. At the end of the day, your mechanical engineers have to sit with the mechanical engineers on the factory that makes it for you and they have to talk. And what's that done traditionally? Is that done that um, for a lot of these companies, the people who actually run the procurement process are the engineers and that takes a ton of their time. They become procurement bureaucrats. They don't like that. What Jiga does is it basically goes to these folks and it says we're going to streamline all of that. We're going to run the awarding process, the vetting, we're going to check certification, we're going to give you a few quotes and we're going to make sure that the delivery and the fulfillment works. Wherever there is hardware, uh, products, whether it's medical devices or defense or aerospace or wherever there are automotive everywhere, people can use Jiga. Now usually when I tell people about Jigga, their initial reaction is yeah, but how big is that? Right. Because it's not something we consider. You look in this room, there's probably tons of things here that have been custom manufactured, but it's not something we notice in the day to day. It's invisible. And so if you look at that market and you ask yourself how much spend worldwide is for that type of uh, hardware procurement, I believe in 2025 was something close to $1.1 trillion. Um, I believe the equivalent global spend for all of advertising and marketing combined is not that much more than that.

Speaker B: Right.

Speaker A: Um, and while everybody, I think in tech can name a bunch of really great companies that kind of are managing that budget, the advertising in custom manufacturing, there isn't. And so for me, kind of talking about what could go right when I met them, um, I was struck by uh, the opportunity. Um, at Symbol, we have like, we joke about having like the symbol index, which is how much money flows through the market divided by how much VC market is flowing through the market. And the larger that number is, the more we're excited and looking at that market. It had like a huge, uh, very high descriptive.

Speaker B: Uh.

Speaker A: Yeah, exactly, exactly.

Speaker B: Inverse ratio.

Speaker A: Yes. However, when they started, and by the way, they were one of the first Israeli companies on yc, this was because of COVID Covid opened yc, uh, to be an online. They were one of the first there. And so they had a ton of visibility here in the market. When they finished, they finished YC with, with a product, with um, uh, with revenue referenceable customers that you could talk to. And yet I think, uh, both because the market is very niche and so if you want to diligence it, you have to do a lot of work. And it feels small.

Speaker B: Mhm.

Speaker A: But also because it's so far removed from the Israeli mainstream, I think a lot of people, nobody told them, nobody said no, we don't think it's a good investment. What they told is, oh, this is great, come back to us in the next round.

Speaker B: And these guys also aren't out of central casting and they're not. Yes, absolutely.

Speaker A: They're on out of central procurement guys. So yeah, they're, they're, yes, they're very, they're very, uh, eclectic background.

Speaker B: Yes.

Speaker A: Um, and yeah, but absolutely, they're not your average. Uh, yeah. And so, and so for, for m. You know, we probably spent I think two and a half months with them. We actually sent them a term sheet before we did the first close on the first fund.

Speaker B: Oh, wow.

Speaker A: Yeah, um, it was pre consensus even in your fund. Exactly, exactly. I almost didn't approve it for myself. Uh, and I'm very happy to have made that investment. Not just because, you know, growth's exponential. Yeah, the growth is incredible. But because it's, you know, it's. If that company becomes as large as we think it can become, these are folks who I'll be honored to have helped to be the next role models of funders.

Speaker B: In Israel. Yeah, I agree with that. Right. Incredible. Just incredible people. Salt of the earth. Yeah.

Speaker A: Resilience. Smart, you know, humble in the right way, but, like, not, ah, uh, you know, kind of downplaying themselves.

Speaker B: Um, amazing.

Speaker A: Yeah.

Speaker B: Final question for you.

Speaker A: Yeah.

Speaker B: Who's somebody that should get some more attention around us that's not giddy enough that you want to give a shout out to?

Speaker A: Ooh, anyone in the ecosystem.

Speaker B: Anyone you want.

Speaker A: I have one in mind, but I think she'll kill me for.

Speaker B: Don't hesitate.

Speaker A: Yeah. Um, so my partner in the fund is Raeli, um, Kogan, who also, uh, worked a bit here while we were raising our first fund. Yeah, there aren't that many people in the ecosystem who have quite the same combination of the caliber of both heart and brain that you have.

Speaker B: Yeah. She has incredibly high eq.

Speaker A: Yes. And incredibly high iq.

Speaker B: I like you too.

Speaker A: Yes. Um, we will sit together. You know, with founders, it kind of like she has X rays into people's souls. Uh, it's just unbelievable. And then in the same meeting, she'll ask something where she'll ask sometimes, like, okay, this, you know, uh, just on the. Just analyzing the business situation. That is. Oh, wow. Yeah. That is a very, very good question. And I don't think there are that many people, um, who have that quite that combination. Um, and, you know, I feel very lucky to, uh, have her on my team and to work with her. Um, and she is, you know, what, she. In a lot of ways, what I kind of want us to present to the world.

Speaker B: Yuval, thank you and thank you for the opportunity. Yeah, that's great. If you enjoyed this episode of Invested, please rate us five stars on Spotify and Apple podcasts and subscribe to our YouTube channel. And if you want to learn more about Yuval Arayav on X, he is at Y U V A L A R I A V. And the same is true on LinkedIn.

Speaker A: Correct.

Speaker B: Thanks, Yuval.

Speaker A: Thank you very much.