One mistake, and a few learnings.

Lesson 1: When someone makes science fiction real once, bet on them doing it again.

In 2009, PrimeSense published a YouTube demo: full skeletal tracking in real-time. Every engineer bone in my body screamed impossible. A mockup. Certain it was cherry-picked.

That tech became Microsoft Kinect. Aviad Maizels was one of the founders.

Years later, Aviad started Q.ai: What they built? Apple’s not letting me say yet. But when I first saw it, I had the exact same reaction I had to PrimeSense: no fucking way.

This time, I didn’t bet against him.

Lesson 2: The closer the relationship, the less likely founders are to pitch you.

Aviad didn’t call me.

“You’re a friend,” he said. “I didn’t want to let you down. This is most likely not going to work.”

That’s the awkward thing about VC. The closer you are, the less likely founders are to pitch you. So they pitch strangers instead.

I only knew Aviad because TheMarker’s “40 under 40” put us in the same photoshoot. There’s a photo of all of us on stationary bikes, pedaling and going nowhere. We became friends.

But our deal flow pod — Gili Leska, Yedidiah Plescov, and Gilad Zirkel picked up a signal: Aviad, Yonatan Wexler, and Avi Barliya were shareholders in a new company.

So I called him.

Lesson 3: For deep tech, financing risk is existential. Eliminate it.

What I saw wasn’t polished. A POC they’d built themselves. Messy. Early. But there was signal.

I called Liran Tam, previously with Simply and other awesome companies, hands-on builder of DSP and Machine Learning models. If anyone knows signal processing, that’s my guy. “Could this design actually work?”

My next go-to was Yaniv Taigman, my cofounder at face.com. He is one of the OGs (and current!) of AI. “How’s Yoni Wexler?”

“He’s the real deal.” That was the first time I’d ever heard Yaniv say that.

When we invested, I told Aviad something counterintuitive for a VC: “Don’t take financing risk. You’re not just doing the D in R&D — you’re a real research shop. You need the runway. Let me help find you the best co-investor.”

Aviad ran a beauty contest. Three tier-1 partners, warm intros, parallel processes. He chose GV to co-lead the seed round. Tom Hulme is a design thinker with a bias for action. Exactly what deep tech needs. Mamoon Hamid at Kleiner and Nabeel Hyatt at Spark co-led the A and rounded up a financing dream team.

Lesson 4: Sometimes reaching a billion users matters more than staying independent.

Three and a half years later, I’m hiding in the bathroom at 2:24 am, lights off so I don’t wake anyone, on a Zoom call with the other board members. It was happening. The third time I thought it: no fucking way.

Today, Q was acquired by Apple.

In 50 years of reinventing how humans interact with computers, Apple has only made one larger acquisition.

It is the first Aleph investment to exit before we even announced it. No PR, no hype. Just building. From early demos in Tel Aviv to Tim Cook signing off personally.

For founders, independence is sacred. You start a company to build something that is all yours. To call the shots. To see how far you can take it.

Aviad, Yonatan, and Avi chose a different path to realize their vision. Their technology will now ship in devices used by billions of people. That’s a different kind of win.

Some visions are too big for one company to carry alone.

What they built? You’ll find out soon enough.

If you’re building something that makes engineers say “no fucking way” — especially if you think I’d be skeptical — I’d love to hear from you.

No Fucking Way was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

Every startup should run an AI hackathon — yesterday. Here’s why.

For the past six months, I’ve been obsessing over one thing at Aleph: getting our portfolio companies to adopt AI. It’s not just because I’m a tech enthusiast or because VCs are pushing AI (although I am, and as an industry, I guess we are) — it’s because we’re experiencing a tectonic shift that no company can afford to ignore.

During this journey, I’ve learned a ton about how organizations actually start using AI meaningfully, and what makes them “believe” in its potential. I’ve seen companies fall almost neatly into four distinct buckets:

• AI Native: These folks are deeply embedded in the AI scene, understand its capabilities, and have frameworks and processes in place to experiment with new tech. This often comes with a strong top-down push to adopt AI. I even heard the phrase “any engineer who is cynical about coding assistants does not belong with the company.”
• Believers: They know AI is a game-changer since they have experienced real value from AI features implemented in their products or processes, but still lack sufficient internal infrastructure or organizational structure to extract full value.
• AI-Curious: Have a solid understanding that they “should be” doing something with AI, and are experimenting with generic AI tools like ChatGPT, Github Copilot or Claude, but haven’t yet invested enough resources to figure out where it can really move the needle for them.
• AI Deniers: They’re typically so laser-focused on running their business, and they’re drowning in unfiltered AI hype. So they block it all out and tell themselves, “It’s either all marketing noise, or just not relevant for us.” Confession: I used to belong to this group. Sure, I knew all about ChatGPT and Copilot, but kept telling myself, and others, that it was “for juniors” and there’s no need for me to dive in. Boy, was I wrong!

My main focus? Converting the deniers and the curious into believers. (I perceive the shift from believers to AI-native as mostly a matter of maturity, and expect it will happen naturally.)

In my conversations with dozens of companies, a trend emerged: the best way to adopt AI is to experience it first-hand, and an AI hackathon is an incredibly effective tool to do so. It can prove to an entire organization that AI is both valuable and doesn’t require as much effort as one might think.

So we decided to practice what we preach. We organized an AI hackathon at Aleph with two goals: to increase awareness and adoption internally, and to gather practical insights we could share with our portfolio companies.

Think of this post as your backstage pass to what worked, what didn’t, and why your startup should run one ASAP.

The Hackathon That Changed Minds

First thing I learned? AI hackathons are definitely not just for engineers.

This surprised even me — some of our most impressive projects came from the least technical team members. Yoni, a producer at Aleph with no technical background, used Cursor to build a Chrome extension that crawls LinkedIn to find relevant people to interview for our podcast. Erica, our Chief Communications Officer, built a custom GPT that perfectly captures her writing style and can generate social media posts based on our podcast transcripts.

Ron, who filmed everything, used AI tools to create an incredibly creative recap video of the hackathon; he even used an AI replica of me to spare me from filming and re-filming myself (a lifesaver)! See here:

The non-engineers did need some help, though. That’s where having “floating” engineers who can assist with choosing the right tools, debugging, and deployment made a huge difference.

For example….

My Finance Team’s Adventure: A Reality Check

Our Finance team wanted AI to automate emails, bank statements, and legacy systems. Within hours, we hit a wall.

I had one mission during our hackathon: help our Finance team build something real. I promised two hours of my time, but ended up embedding with them for the entire event.

Noa and Shani (both non-technical) came prepared with ideas for coordinating emails, processing bank statements, and updating legacy systems without APIs. Perfect candidates for automation, right? “This is simple,” they thought. “Doesn’t even require any real intelligence.”

Well, turns out these problems are still not realistically solvable within a 24-hour timeframe.

Your first idea is (probably) wrong. AI isn’t magic. Be ready to pivot fast.

By mid-afternoon, we pivoted to something game-changing-yet-achievable: AI agents that monitor Gmail and draft responses automatically based on configurable prompts. The agents could be customized to handle specific types of emails and access our CRM when needed. Specifically, we wanted to automate away the task of handling an investor asking to change their bank details, or their listed address. These are not as rare as you may think, and involve endless back and forth emails to obtain all the necessary documentation required by regulation to facilitate that — such as proof of address, proof of banking, personal details, etc.

The lesson? Most projects fail before they start — because the idea is just not a good fit for a hackathon. Have engineers available to guide non-technical teams toward feasible solutions to problems worth solving.

And on that note: here’s how to run your hackathon.

Your AI Hackathon Playbook

1. Start With the Right “Why”

AI hackathons aren’t about the code — they’re about changing minds.

A successful hackathon proves to your entire organization that AI is:

• Actually useful for real business problems
• Not overly difficult to implement
• Not scary or threatening to jobs
• Far more accessible than most people think

Success metric: People who walked in skeptical walk out saying, “I had no idea we could do this so quickly!”

2. Mix Up the “Who”

The biggest mistake? Limiting your hackathon to engineering.

✅ Must-include departments:

• Engineering & Product (obviously)
• Marketing & Sales
• Operations
• Finance & HR
• Legal & Compliance

Cross-department collaboration creates genius solutions to problems you didn’t know you had.

Secret weapon: Allocate some engineering resources to non-technical teams, even just as part-time advisors.

3. Plan Ahead For the “What”

Finding the right AI project is surprisingly tricky. AI is magically good at things you’d think are hard, and frustratingly bad at things that sound simple.

Pre-hackathon preparation could make the teams much more effective.

• Host ideation forums 2–3 weeks before the hackathon where participants can share their dream AI solutions
• Host idea-sharing sessions with open signups
• Offer technical “office hours” for feasibility checks and brainstorming
• Provide inspiration: overview of model capabilities, effective platforms for building projects, etc.
• Think about unique data you have in your organization, and how you can leverage it (you might need to prepare some data in advance). For example — at Aleph we have a large collection of investment agreements, board decks, pitch decks, and emails of all kinds. Each of those is an unstructured goldmine waiting to be excavated with LLMs.

4. Nail the “How” Logistics

Tools matter more than you think.

Before:

• Test-drive everything. Marketing demos lie. Most of our teams switched platforms at least once
• Address AI anxiety openly. Some people fear it; others are jaded by hype
• Create balanced teams. Technical + business expertise = magic
• Have a no-code workshop. You could either start the day with one, or plan it for the week before

During:

• Have technical “floaters” available to help stuck teams. These could be engineers or well-informed product people
• Schedule regular check-ins to identify pivots early
• Celebrate small wins visibly. First working prototype? Ring a bell!

Judging that matters:

Give some thought to how you judge the projects:

• Business impact: Will it move a meaningful needle?
• Readiness: How close is it to production use?
• Technical innovation: Is the use of AI justified?
• Presentation & lessons learned: How did the team showcase their project, and what did they learn that could help everyone?

Consider a variety of prizes to maintain excitement: Best Business Impact, Most Innovative Use of AI, Most Likely to Ship, etc. And don’t forget some lighthearted ones like “Most Unnecessary Use of Technology.”

5. Don’t Drop the Ball After

The saddest outcome: amazing prototypes that die after the event.

Must-do actions:

• Allocate engineering time to productize the best projects
• Document and share learnings company-wide
• Keep the conversation going. Encourage people to share their ongoing AI journey, learnings and discoveries with the team

There Is No Good Time — Just Do It

Stop debating AI strategy. Just run a hackathon and see for yourself. The companies that build with AI today will leave everyone else behind.

I get it. There’s AI hype everywhere. Marketing promises the moon. It’s easy to become cynical when reality rarely matches the demos.

But here’s the truth: companies that experience AI firsthand develop an intuition that no whitepaper or consultant can provide.

The 5 Tangible Benefits You Can Expect:

1. Cultural transformation: People who were AI-skeptical can became enthusiastic advocates
2. Skill acceleration: Teams gain practical AI experience in just 24 hours
3. Cross-functional collaboration: Departments that rarely interact build lasting bridges
4. Product innovation: Uncover use-cases no brainstorming session can ever find
5. Competitive intelligence: Develop a better radar for where AI actually matters

The gap isn’t knowledge — it’s experience.

From what I’ve seen, there is a strong correlation between use of AI in day-to-day, and success in embedding it into the product in areas that actually move the needle.

A developer who never uses GitHub Copilot or a product manager who hasn’t consulted Claude about architecture simply won’t develop the right intuition for these technologies.

In 30 days, your competitors will have already built something. Will you?

Run an AI hackathon. It doesn’t need to be perfect. You’ll be shocked by what your team can build — and more importantly, how it changes their thinking.

The companies that thrive aren’t the ones reading AI strategy decks. They’re the ones with their sleeves rolled up, building.

Your future competitors already are.

Why Your Startup Should Run an AI Hackathon (Yesterday) was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

Today, I’m thrilled to announce the launch of Aleph AI Team (AI-TEAM), a new initiative designed to help 2 or 3-person founding teams build transformative AI companies from the ground up. At Aleph, we’ve always believed in the power of domain expertise, unique data, and thoughtful distribution strategies. In a world where AI engines and foundational models are rapidly commoditizing, our view is that genuine long-term value lies at the intersection of these pillars.

We are also seeing way too many AI meteors that have insufficient moats. They grow quickly but are not defensible.

We are offering up to a $3,000,000 pre-seed investment (on a standard capped SAFE) to ambitious technical teams who want to move fast and build something remarkable and transformative. Our aim is clear: get from zero to $10 million in revenue within 18 months but at the same time to build a real moat. Contrary to popular wisdom on X, we think it takes up-front capital to build a moat in the AI era and it is actually harder to bootstrap. It is easy to bootstrap ephemeral distribution and revenue growth but harder to secure data and build a true distribution advantage.

We have a particular interest in AI-enabled marketplaces with non-SaaS business models and in founders with unique data advantages. We have already invested in 3 AI-enabled marketplace businesses where the AI has significantly reduced the communication, coordination and work overhead of running the marketplace and delivering the product.

We are also interested in businesses where AI and AI-enabled robotics give you an advantage where continuous work accelerates not just productivity but also the innovation cycles. Laboratories, chemical innovation and semiconductor manufacturing are, perhaps, examples of that.

It’s an aggressive goal, but we believe that with the right focus, unique insights, and network, it’s achievable. We have the network, and we believe we have some unique insights as well. We think you can change the world for the better with AI, and we can build the fastest growing and most defensible AI companies out of Israel. Do not bring us run-of-the-mill AI features. Bring us something different, because, as you know, Aleph’s motto is “Different is better than better.”

Email us at aiteam@aleph.vc

(longer version below)

Why Now?

Over the past year, we’ve all witnessed the meteoric rise of new AI tools and companies, many of which have made headlines for disrupting traditional industries. From generative text models to specialized vision systems, the AI gold rush is in full swing. We are hell-bent on helping Israeli entrepreneurs catch up and get ahead of the world.

At Aleph, we were very early to AI, investing a decade ago in: Lemonade (NYSE $LMND) to transform insurance using bots, not brokers; Windward, recently acquired after going public in London, which transformed Maritime with AI; and Nexar, which has the second largest road and real-world video and telematics data set after Tesla, and very unique distribution. All of these had early investments.

In our view, the real competitive advantages will not come from simply building the “best” model. Instead, advantages will be carved out by those, like Windward, Lemonade and Nexar, who effectively harness proprietary or specialized datasets, and by those who rapidly iterate on product-market fit with superior go-to-market strategies. We also believe that the intersection of AI and the physical sciences (Biology, Chemistry, Physics and Materials) is a great opportunity for Israeli founders.

This aligns with Aleph’s broader thesis: AI engines will become a commodity, but unique data and distribution strategy are true moats. GPT wrappers are not wrappers, but rather competitive advantages consisting of data and distribution. We’ve Tweeted, released founder videos and spoken about this before, referencing how early success stories in AI have often emerged from founders who deeply understood their customers’ pain points, owned critical data assets, and iterated distribution at lightning speed. Our AI-TEAM program is designed to put these insights into action and create reinforced learning among the teams. We also think that atoms will also be easier to monetize than bits.

What We’re Looking For:

1. Deep AI Proficiency
   We want teams who live and breathe AI — people who have worked with cutting-edge models, published relevant research, or built AI products at scale in the military or civilian life. We believe that the fastest path to meaningful breakthroughs comes from individuals who understand the technology inside out.
2. A Unique Data Angle
   Having exclusive access to a dataset or a unique mechanism for data acquisition is critical. Whether it’s domain expertise in healthcare, finance, cybersecurity, retail, chemistry or another industry, we want to see how your data or domain understanding sets you apart. We are open and ready to also transform old stodgy industries, and we are market-geography agnostic.
3. Agile Teams
   This is a pre-seed investment aimed at teams of two. We believe small, focused teams can move with unparalleled speed, and we want to foster a tight-knit environment where decisions are made quickly, pivots happen efficiently, and learning is constant.
4. Distribution Thesis
   How do you plan to reach and serve your customers at scale? Over the years, Aleph has seen that distribution can make or break a startup, especially in AI. We’re looking for teams that have a clear blueprint for growth — whether that’s leveraging developer communities, building strategic partnerships, going direct to customers, self service, or tapping into an underserved market segment.

What We Offer

• Up to $3,000,000 Pre-Seed Investment on a Standard Capped CLA (Convertible Loan Agreement)
  We want to get you started on the right foot, with the capital needed to hire initial team members, build an MVP and an initial moat, gather more data and test the market. We can help you set up your company.
• Space at Aleph & Great Coffee
  We’ll provide office space so that you can focus on execution. Learn from others moving at breakneck speed and reinforce the learning from peers. And yes, our coffee and location in Tel Aviv is fantastic!
• Mentorship & Network
  Aleph has invested in numerous AI startups in the past, and we’ll open up our network of partners, founders, and domain experts. You’ll have direct access to our Ampliphy platform to recruit talent and access expertise and experienced operators who can help you navigate regulatory hurdles, refine your product, or land your first customers.

Strategic Guidance
We’re not just here to write checks. We’re here to help you refine your product strategy, identify the most lucrative verticals, and make those first key hires. You’ll benefit from Aleph’s experience, plus the wisdom we’ve gained by working with innovative AI teams across various industries and our connections to the foundation model companies. We have an AI expert in house who has already been working with our portfolio companies.

We’re actively seeking applications starting now. If you’re interested, email aiteam@aleph.vc. Let’s build the next wave of AI companies together, headquartered out of Tel Aviv. If you live abroad and are very talented, we are certainly open to relocating you. We think Tel Aviv is going to be Mecca in the coming years and are excited to build bigger and better. And yes, the coffee is a lot better in Tel Aviv than in New York or Silicon Valley, as are the beaches and talent.

Introducing the Aleph AI Team: Building the Next Wave of AI Companies was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

Most organizations, whether they realize it or not, are often stuck in wait states — periods where progress stalls due to delayed decisions or inaccessible information. These wait states can be costly, leading to missed opportunities and diminished organizational momentum.

Wait states can be as banal as waiting to act until getting a reply for a message you were previously CC’ed on but the recipient mistakenly didn’t reply-all, or, more specifically to venture capital, finance not calling capital for a deal where the investing partner is progressing faster than initially assumed.

The system described in the following post won’t solve for strategic instances of wait-states; these would be solved by addressing the underlying issues, which are probably: ill-defined ownership, under/over staffing, unclear roles and responsibilities, and teams which are too big. However, it will help with some of the symptoms of such, like lack of (or over) communication of larger teams, or figuring out that multiple teams are working on the same projects.

We uncovered how wait states were affecting Aleph and implemented an AI-driven Email Router to eliminate them, enhancing our organizational velocity and competitive edge. Here’s a short video on what we did, or keep reading for a more in-depth view:

Shout out to fellow productivity geeks that commented on early drafts of this: Eytan Levit (introduced the notion of strategic vs. tactical wait states), Omer Perchik (pushing me on value vs. privacy costs), Jacob Bank (need for culture shift to prefer decision velocity even at some cost to quality).

The Impact of Wait States on Organizational Velocity

Organizational velocity is determined by two key factors:

1. Speed of decision-making: How quickly decisions are made directly affects the ability to seize opportunities.
2. Quality of decisions: The better the decisions, the more effective the outcomes.

However, several obstacles often impede these factors:

• Information bottlenecks: Crucial information gets trapped in individual inboxes, making it the wrong information in the wrong place at the wrong time.
• Fear of mistakes: Individuals afraid of making errors due to fear of not having the information required may delay decisions, further slowing down processes.

In this blog post, I’ll focus on speed of decision making. Decision quality is heavily influenced by the availability of necessary information, but deserves its own series of posts.

How do you make decisions faster?

1. Get the decision to the person who needs to make it immediately.
2. Give them all the surrounding context to mitigate their uncertainty.
3. Create a culture that values speed of decision making, accepting some decisions must be undone.

Real-Life Examples of Wait States

As a founder, you can probably relate to these scenarios:

• Delayed talent referral: Someone seeking a new role emails me. It takes a week for me to forward the email to our talent team, even though there’s an immediate and high priority need in a portfolio company I’m unaware of. By the time I do, that person has already signed up with a high-flying company and is no longer available.
• Missed investor connections: A portfolio CEO asks if we know a particular investor that reached out to them. Not only is one of my partners familiar, they have also helped the specific investor in question and thinks there is a great investor/founder fit. The connection exists, but the information isn’t promptly shared. The founder deferred the meeting to their CFO. No second chance to make a first impression.

These are examples from day-to-day life of a venture capital firm. One might ask whether it makes sense to give up on privacy for such “banal” cases. My answer is absolutely yes. Getting the right talent to the right company at the right time is probably the most important thing a VC can do to influence the success of a portfolio company. Helping make sure the right investors join the cap table is probably the second most important action we could take.

What’s common in these cases?

Someone else at Aleph could have handled the message more efficiently than I did. Either I didn’t get to it in time, or I wasn’t aware that someone else was better suited to handle it. Routing alerts to our talent team and deal flow pods allows them to support talent recruiting and investor referencing without me needing to actively ask them, or even be aware (!).

So, How Do We Get the Right Information to the Right People Quickly?

To eliminate these wait states, we needed a solution that ensured information would be routed to the right people without unnecessary delays. Our answer was to leverage LLMs to democratize access to my inbox.

Everyone at Aleph can now prompt my email. They get alerted when their custom prompt matches an email in my inbox.

How it Works

Let’s say I get an email from a friend recommending top talent that’s just about to leave Meta and would like to jump on a call to discuss which portfolio companies I’d recommend they check out.

• Any team member at Aleph can set up prompts against my email using a Zapier interface-based editor. We use Zapier quite extensively within Aleph, and Zapier Interfaces provide for quick-to-build, simple user interfaces such as this one. This system is entirely under their control, so I don’t need to know what they’re interested in. In this case, Bar of the Talent Pod has set the system to alert her if a talent-related email arrives in my inbox.

• Positive & negative indicators: Subscribers set positive and negative indications to refine which emails are of interest. For example, the Talent Team may choose positive indicators like “hire,” “referral,” etc. Negative indicators are useful to filter out emails that match the positive indicators but that wouldn’t be relevant, like a newsletter or a talent-related conference.
• AI processing: Each incoming email is sent to GPT-4 alongside a prompt created from these indicators. We use gpt-4o-2024–08–06 as it supports Structured Outputs, which makes the JSON output far less error-prone.
• Approval process: A configured alert goes through an approval process, where the initial matching emails are manually reviewed before they are automatically forwarded. This ensures privacy and security are maintained. More on this below.
• Relevance filtering: If the AI deems the email relevant, it gets forwarded to the subscriber over Slack. One cool recent addition was that following a thumbs-down emoji, we forward subsequent prompts to the email router. Through this, subscribers can have the system adjust the positive and negative indicators, or include different elements in the forwarded summary.

• Public collaboration: The forwarded messages go to a shared Slack channel, allowing us to continue discussions publicly and collaboratively.

Company Culture Impediments

One significant hurdle in many organizations is the political power that comes from keeping knowledge to oneself. Information hoarding can create silos, slow down processes, and breed mistrust.

At Aleph, we operate on complete trust and an extreme transparency policy. By making information accessible and allowing everyone to participate, we dismantle traditional power structures that rely on information gatekeeping.

We do understand the sensitivity of accessing emails and the importance of confidentiality. That’s why any configured alert undergoes an approval process. Initial matching emails are manually reviewed before automatic forwarding is enabled. This safeguards sensitive information while still allowing for efficient information flow.

One more subtle issue in implementing such a system is the culture component of velocity, and that leaders have to make it clear how much they value velocity by accepting that quality may go down when they democratize decision-making within the organization. Otherwise if a leader just says, “Let’s make better decisions, faster,” it’s as if they’re saying nothing. I love the story about Steven Sinofsky instituting a “same-day decision” policy at Microsoft after the Vista debacle, and the resulting snail pace of making decisions. (Side note: I couldn’t find a reference to it when researching. If you have one, please comment!)

The Outcome: No More Wait States

This system doesn’t make decisions for us, but it ensures that the right information reaches the right people promptly. By eliminating wait states, we’re able to:

• Accelerate decision-making: Decisions are made faster because the information is readily available to those who need it.
• Improve decision quality: With better access to relevant information, the quality of decisions improves.
• Foster a collaborative culture: Public discussions in shared Slack channels encourage transparency and collective problem-solving.

Consider Getting Rid of Wait States Within Your Organization

Eliminating wait states isn’t just about implementing new technology; it’s about shifting culture. By trusting our team and embracing transparency, we’ve created an environment where information flows freely, decisions are swift, and everyone is empowered to act. The political power of keeping knowledge to oneself diminishes, and the organization moves forward with greater agility and cohesion.

How to Eliminate Wait States, in a Nutshell:

• Empower your team: Allow team members to set up custom prompts and alerts based on their needs.
• Leverage AI thoughtfully: Use AI to facilitate information flow, not replace human decision-making.
• Maintain privacy and security: Implement approval processes to safeguard sensitive information.
• Cultivate transparency: Open communication channels break down silos and reduce wait times.
• Foster collaboration: Shared platforms encourage collective problem-solving and innovation.

If you’re interested in eliminating wait states in your organization, think about leveraging AI to improve information flow. I’m considering open-sourcing our prompts and workflows in the future. If you’re interested in getting a copy or learning more about how we’ve implemented this system, feel free to reach out to me.

From Wait to Great: Leveraging LLMs to Boost Aleph’s Organizational Velocity was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

October 7th comes out this year right after Rosh Hashana, the Jewish new year. Last year it was on Simchat Torah, a day of rejoicing. This year it lands in the ten days of repentance, how fitting.

The eve of Rosh Hashana feels like a good time to take stock, reflect and re-energize.

What did we learn this year?

There is real evil in this world. Hamas, Hezbollah and Iran are evil. There is no forgiveness for what they did on October 7th and then on October 8th. College protesters straddle the line between clueless and evil. The line should not be as fuzzy as their brains are. From where I sit, Ivy League presidents are…well…confused and contemptibly craven. But you know, maybe that depends on context.

We mourned a lot this year. It was painful. We are angry at the moral vacuousness of so many people, purported leaders who turned out to be DEI shills or just plain anti-semites.

What else did we learn?

The world is going through a paroxysm. We are at a moment in history that will forever be looked at as a turning point.

Global super power competition returned. Kinetic wars erupted. Cyber wars came of age. Democracy is flailing, globally. The welfare state is on the verge of bankruptcy. Government bureaucracy is killing all of us while civilian initiative and resilience is the best way to succeed and even leapfrog. Israel has that in spades.

Of course, AI burst into all of our lives and livelihoods. Israel has a chance to lead here as well. It will, of course, come from civilians. The government right now is in AI amateur hour.

We also learned that despite the wars, the in-fighting and the horrors of October 7th, Israel is ready for this new era in history. We discovered what I have called the “Defining Generation.” Israeli kids that people misjudged. They turned out to be the insta-hero generation and not the Instagram generation. They stood up where leaders failed. Our kids showed moral clarity where Tiktok, talking heads and title-rich university presidents fumbled (or just screwed up, depending, of course, on the context).

Israeli society is resilient. Israeli tech is resilient. Investment in Israel is more than resilient. It turns out that the Abraham Accords are resilient as well. This was a cursed year. But it had hidden blessings.

This same defining generation of warriors and hackers, tank commanders and technologists, pager innovators and battle-hardened leaders are now starting companies, leading the next generation of Israeli innovation to global superiority. They have taken up the mantle to fix the country as well. In an insta generation, everyone will see that political, technological, startup innovation and success does not happen overnight. You cannot microwave it. But this generation will deliver on it. I am certain of that. It is coming.

Why have Sequoia, Greylock and Accel all opened offices in Israel this year? Why did we at Aleph increase our investment pace this year? Because we see resilience. We see innovation. We see aspiration. We signed on our investment in Dream on the Gaza border on November 7, while the CEO served in reserve duty. We continued to back fintech, deep tech, defense tech and even biology inspired chemicals, and other companies started by resilient founders throughout the year, committing almost $100 million to Israeli tech. We are bullish on Israeli resilience and as I wrote exactly one decade ago, the two most important traits for a founder are optimism and resilience, and we have that in spades in Israel.

The world is re-orienting, and Israel alongside our Abrahamic partners will become an ever more important part of it. As Europe declines and the East and South rise, Israel and our Abrahamic partners are perfectly placed as the innovation ecosystem that will help drive their economies and drive an AI future in this region and for a realigned world. Our citizen first democracy will help show the way forward as sclerotic governments struggle to keep up.

In a recent podcast, the interviewer asked me if I had a parting line for listeners. I said “Be Optimistic. I am.”

There are some who look around in despair about the future. They believe the grass is greener on the other side. We are building grit and resilience, a society that people want to move to. When asked where he wants to raise his kids, Sequoia Capital’s Shaun Maguire told Harry Stebbings on the 20VC podcast: “In Israel.” He is right. The future will be bright here. Be a part of building it!

Shana Tova and blessings to the Defining Generation of Israelis who continue to inspire us all through selflessness, responsibility, resilience and innovation!

Am Yisrael Chai!

If you missed my interview on Fox, link is here.

Almost One Year Since October 7th — Why I’m More Optimistic about Israel was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

There’s a pervasive belief that building a dedicated AI group is the path to leveraging the power of artificial intelligence. My experience, however, points to another conclusion. Since Large Language Models (LLMs) are able to perform better than most, if not all use-case specific machine learning models, dedicated AI teams often slow down progress rather than accelerate it.

Why are LLMs different? Unlike previous machine learning techniques that required deep, specialized knowledge to implement, LLMs are more accessible and can be leveraged for basic use cases with simpler techniques like prompting. This lowers the barrier to entry for many companies, making a centralized, specialized AI team less critical for initial adoption.

I explain more in this short video, or you can keep reading.

Why Your AI Org Structure Matters

Organizational design might not be the most exciting topic, but I’m passionate about its impact. It is more than just a chart on a wall; it’s the very structure that determines how your company operates.

Org design is all about trade-offs:

• Isolation provides depth and finding a new global maximum (moat)
• Federation provides speed and finding many new local maximums

This isn’t the first time such tradeoffs create challenges. As a co-founder of face.com, I had a front-row seat to Facebook’s “mobile crisis” over a decade ago. They had a dedicated mobile team tasked with replicating desktop features for mobile. Though this seemed like a logical solution for the unique challenges mobile engineering had back in the day, it actually created a significant bottleneck. Unlike the functional teams, like Photos and Timeline, the mobile team did not have visibility into the business impact of their work, leading to inefficient prioritization and lesser impact.

Think about notifications. When tagging was added to the desktop version, “you have been tagged” notifications became one of the key sources of traffic. Not having that in the iOS app until the mobile team had bandwidth to add it was painful.

Today, I see a similar pattern emerging with AI. Companies create separate AI groups that often focus on what’s technically challenging or has easier access to data, losing sight of real business needs. Classic machine learning problems, like matching supply and demand, become the focus, while more impactful opportunities get sidelined.

Consider Windward, a company that tracks global shipping. A typical AI team might have focused on building a container- arrival forecasting model. Windward, however, saw a greater opportunity in calculating contract penalties for delayed arrivals, a solution with a much higher business impact.

How Your Product Team Can Leverage AI

The key observation is that even though LLMs are the bleeding edge of AI, unlike previous AI techniques and capabilities, most teams don’t need deep knowledge of how they work to generate impact. That said, not knowing what they could do beyond prompting limits Product Managers and engineering leaders from taking full advantage of their capabilities.

Integrating AI into existing workflows does pose certain challenges, like:

• Knowledge silos: AI engineers often lack deep understanding of product-specific business problems
• Duplication of effort: Separate teams can lead to redundant work and inconsistent implementation of AI solutions

However, through my experience, I have observed organizational design approaches that effectively address these challenges to gain the speed associated with federating the knowledge. These include integrating AI-informed engineers and product managers into product groups, fostering direct collaboration, and facilitating knowledge transfer. Additionally, establishing an AI guild promotes knowledge sharing, standardizes best practices, and supports infrastructure development.

Why You Should Embed AI Engineers Into Product Teams

By embedding AI-informed engineers within product groups, companies can achieve significant advantages:

• Faster response: Direct collaboration and aligned priorities lead to quicker development and implementation of AI solutions
• Increased velocity: Organizations can implement AI solutions more efficiently and at a faster pace, driving quicker time-to-value
• Better focus: AI-informed engineers gain deeper understanding of the specific business problems they need to solve, becoming a great interface with the AI-specific group for problems requiring deeper AI knowhow

Now, it’s important to acknowledge that some highly complex AI projects might still require dedicated, specialized teams. You should have an AI team if the purpose is to create a differentiator on top of LLM that will become an unfair advantage for the company. This requires internal learning cycles and expertise to figure out what that means and how to approach it.

You want to give them quiet and focus to understand the technological edge, rather than investing in company-wide education.

If your company is developing foundation models, fine-tuning to a unique dataset or has unique AI cost structure needs, it makes sense to have a team focused entirely on that. However, even in these cases, close collaboration with embedded AI engineers within the guild structure is crucial to ensure alignment with business needs and efficient implementation.

Empower Your Product Teams

It’s clear that LLMs offer companies a unique opportunity to embrace AI. Instead of defaulting to dedicated AI teams, which can create silos and slow down adoption, companies should focus on empowering their existing product groups with the knowledge and tools to leverage LLMs effectively. This integrated approach will lead to faster, more impactful AI implementation and ultimately, a more successful AI-driven future.

— — —

Shout out to Uri Eliabayev and Oren Ellenbogen who read & commented on the early drafts of this post. Fun to collaborate with org structure and AI geeks in the eco-system. Thank you!

Your AI Team is Slowing Down Your Company was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

Over the last 25+ years that I have been investing in Israeli startups, Israeli entrepreneurs have faced a dilemma from the moment they start their company: Should I incorporate in Israel, or in Delaware?

Sometimes the decision is influenced by well-meaning accountants and lawyers, either based on the latest developments in tax regulations, or other legal minutiae in Israel or the US. Six years ago, President Donald Trump’s tax policies caused many investors and advisors to push Israeli entrepreneurs to incorporate in the US. Oftentimes, they ask the entrepreneur where the company’s critical mass of management and decision making will sit. Recently, the now-halted judicial reform in Israel caused some entrepreneurs to do a tax inversion and re-incorporate the parent company in the USA, and others to decide categorically to incorporate in the US and specifically in Delaware.

I have always been a proponent of incorporating in Israel. I think it is simpler from an operational perspective. I think it helps you focus on your business and not the need to do things for tax or permanent status reasons. Moreover, Israel’s 102 plan for stock options is best in class on a global basis and, candidly, I think entrepreneurs should incorporate in their home market for patriotic reasons, if all other issues are roughly equal.

However, there are now even more reasons to incorporate in Israel. Tesla founder and CEO Elon Musk recently had his pay package stripped by the Delaware court. Court overreach years in arrears to strip an executive of his compensation that was legally approved by a company’s board of directors is, candidly, astonishing. While one should question whether Israel needed the Judicial Reform the politicians put forward, it is now clear that Delaware needs some judicial reform. Why would you want to incorporate in a state where the court can just overturn a decision of the board of directors with no rhyme or reason?

I think entrepreneurs should prefer the friendliness of Israel’s legal system, especially given the influence some untoward actors are exerting on the American political system. Moreover, large international markets such as India and the GCC are opening up to Israeli innovation, and Israel’s direct trade deals with these partners could become an advantage for Israeli domiciled companies.

Lastly, the Israeli government is about to enable $1B in institutional investments in startups and venture capital in Israel. Personally, I am not in favor of this particular policy initiative. I think all of the incentives to Israeli institutional investors to participate in venture capital have failed in the past, and furthermore it has anti-Darwinian effects, which will cause the Israeli institutional investors to invest our hard earned pension money in less-than-stellar companies and funds.

However, given that the government has decided to create this incentive, I think this $1,000,000,000 investment matching incentive should be conditioned on this money being invested in companies that are registered in Israel. My personal view, which I conveyed to the Ministry of Finance, is that the benchmark should be that 90% of the money goes to companies incorporated in Israel because Israeli incorporated companies pay more taxes in Israel and keeping the IP in Israel is essential. Even if this incentive won’t convince Elon Musk to incorporate in Israel and leave his new home in Texas, this $1,000,000,000 matching grant should give Israeli entrepreneurs extra incentive to incorporate in Israel.

So unless you have a regulatory reason to incorporate in the US, I highly recommend you incorporate your company here in Israel. This will be good for business, good for the founder and good for our country. Be Long Israel!

Incorporate in Israel or Delaware? was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

I am currently traveling in New York, and everywhere I go people ask me whether we at Aleph have been investing during the war. The answer is an emphatic yes. We have completed 5 new investments since October 7th. But that is not all. In the last four months, we have raised over $150M into our portfolio companies from leading foreign venture capitalists.

On Day 30 of the war, we signed our investment in Dream. Led by Shalev Hulio and Sebastian Kurz, Dream provides national-level AI-based solutions for cyber protection against state level threats and has been delivering to customers in both Europe and Israel since October 7th. As I said then to The Wall Street Journal, “Even during wartime disruptions, many Israeli startups continue to deliver products and services, and hit their numbers. Israeli high tech is not only here to stay, but will grow better out of this.”

Of the four other investments, only one was announced. It’s a consumer fintech company called Sequence that’s building a financial routing product and growing extremely quickly. We believe, as we always do when we invest, that the other three are just as magical.

Since the beginning of the war, and even over the past year, we have repeatedly said that any delta in total dollar amounts invested in Israel versus the USA has a lot more to do with mega investment rounds in AI-base models in Silicon Valley than it does with any political or geopolitical events. Israel does not yet have a group of “base model” companies and I am not sure it ever will. Unfortunately, the government’s lack of focus over the last few years on AI and insufficient investment in quantum computing is cause for concern, and a likely cause for the lower dollar investment.

However, we are seeing Israeli entrepreneurs tackling different parts of the AI stack, automating many big, long, paper or form-based processes with AI. The sort that often involves significant labor resources and, in some cases, adherence to regulatory guidelines. We believe Israel can lead here, and we are excited to tell you about some of those investments soon. Moreover, we believe there are real opportunities in the defense area. Israel is due to rebuild its defense tech industry in the area of AI and synthetic biology, and Israel-based companies could grow into global leaders in these fields.

I cannot speak for our colleagues at other venture funds. Future statistics will show whether other investors were on their back heels while the war was ongoing. The gloom and doom narrative does not match our lived experience. At Aleph we saw the resilience of Israeli entrepreneurs, the will to deliver and win that caused many companies to beat their numbers in Q4. We think this will turn out to have been one of the best periods to invest in Israeli innovation. We also see many soldiers coming back from the front with a burning desire to build something big and build a better country.

As suggested above, we were not alone. You will need to wait patiently, but meaningful follow-on rounds were completed between November and January into our portfolio companies, all involving foreign investors. You will recall that a couple of cyber companies were acquired in Q4, another one was announced this week and rumors suggest that a few more acquisitions are coming.

What is the elevator pitch for investing in Israel for the next decade? Israelis are the most resilient, optimistic, responsible, battle-tested and innovative civilian population in the world. In an era where political leadership is waning, invest where creativity is already tested against the challenges of the future. Invest where multidisciplinary innovation will lead to exponential breakthroughs and profits. The horrific tragedy of October 7th created the greatest real-time hackathon in history, bringing together the best and brightest of many generations of Israeli innovators

Be prepared to see science fiction come to life.

Be Long Israel. We Are. was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

Today, I want to share our recent investment in Sequence — a platform that puts people back into the driver’s seat of their financial future.

I first met Gilad Uziely, Sequence’s CEO, at The Junction accelerator, 10+ years ago. He was working on Mekomy, a marketplace for off-the-beaten-path tours and activities. The right founder, the wrong startup. What caught me was his focus on making life better and his ability to create mission-based communities. Something that’s clearly visible in how Gilad, and his Co-Founders Tom and Oren, approach the building of Sequence.

Sequence allows you to visualize your money flow, set smart routing rules and execute complex financial strategies all from one single control center.

To understand Sequence, one should consider the functionality of a typical internet router. Sequence applies this concept to personal finance, acting as your financial router. It allows you to set up rules for managing your money, much like setting a reminder on your phone, or building no-code scripts in Zapier. These rules can be as simple or as complicated as you find fit. It’s a low-floor, high-ceiling product.

For instance, an Airbnb host can automatically divide their rental income, allocating portions for expenses and savings. Similarly, a 1099 worker can automate their tax savings and expense management, and a YouTube influencer can revenue share with their contract video editor.

Here’s how it looks to the end user:

Under the hood, you can find another Aleph portfolio company (of which I’m proudly a board member) called Unit, powering the Sequence wonder. By the way, Unit also powers Aleph portfolio high fliers HoneyBook and Agora, who use it to offer everything from embedded bank accounts to programmable debit cards and automated payments to streamlined accounting.

But, as the old adage goes, there is no free lunch. Getting these frictionless financial experiences comes with a hidden cost to the end user. In the old financial world, you had a single pane of glass: Your bank account. The ease of use offered by having financial capabilities within applications often complicates financial management by fragmenting balances and workflows. Sequence addresses this by providing a unified, streamlined platform that not only provides visibility, but control over your money flow.

The term ‘financial mastery’ is more than a concept; it’s what Sequence enables. It’s about automating the balance of income, expenses, and savings in real-time, tailored to individual needs and objectives. Sequence offers features like minimum balance protection and automated fund transfers based on personalized goals, making financial management intuitive.

Imagine having as much oversight over your finances as you do over your calendar. The focus is no longer just on managing your finances, but on orchestrating them efficiently.

Don’t take my word for it. Remember what I said about community building? The team has set up a Discord where they work with their customers to build the best financial router for their needs. Or you can take back control over your finances right now on Sequence’s website.

Why I Invested: Financial Mastery with Sequence was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.

All companies begin with the joy of starting something new. An idea, a product, a process, a team that is coming together or reuniting after being apart.

But just as companies come to life, they also come to an end. Not every idea reached its audience at the right time or was received with the excitement its founders had expected. In other cases, market indications could be positive, but the fundraising was unsuccessful for all sorts of reasons. Whatever the situation may be, you and the team reached a dead end, and it has become clear that wrapping up is the right step.

What Closing Your Company Means for Your Investors

First of all: don’t worry about us.

From an investor perspective, the venture model always assumed portfolio attrition, and that some of the investments we made in each fund would not come to fruition. It was our good fortune that over the past 10 years we’ve lived in a low-interest-rate environment, that coupled with abundance of cash, created the perfect conditions in which companies don’t die because they can always raise additional money.

Rising inflation required central banks to respond with interest rate hikes, which in turn depressed the capital markets and brought the 10-year streak to an end and sent us back to the original model. Companies will find it harder to raise money, investors’ tolerance will be lower and as a result, more companies will need to shut down operations. That’s just the name of the game.

So if this is what it comes down to, don’t beat yourself up. Instead, focus on the road ahead to steward the process.

The Reasons Why You’re Closing Your Company Matters

I have observed various reasons for companies shutting down, and these underlying reasons can influence the strategy for the shutdown process.

Here are three hypothetical scenarios to help you focus on the different outcomes that will be relevant to your specific circumstances.

1. Money has run out

Company 1 pivoted in 2019 after raising money a couple of years earlier. The new version of the company benefited from the accumulated experience of the founders from the previous attempt, and the beginning was optimistic. Despite the fact that the new product was received well by the market and initial sales showed positive signs, the company was unable to attract investors to put large enough commitments to give the company the fuel power it needed to succeed.

Over a period of a few years, the product improved and the team grew, but sales growth was modest, and the company raised only via SAFE. Fast forward two additional years, and the company became incredibly efficient, and was able to continue to grow at a similar rate but not at venture scale (which is one explanation for the inability to raise funds).

The founders fought tooth and nail to find an investor, but the money started to run out and only a few months of cash remained. It became clear that it was time to prepare for shutdown. The founders timed their decision according to the remaining cash, which they defined as their closing budget.

Takeaway: If the reason for shutdown is lack of resources, it is important to allocate money in advance for salaries and other expenses that I will outline below.

2. “Our product reached a deadend”

Company 2 was a well-funded series seed in the height of the market that began a frantic chase after a product and “land grab”. A long list of regulatory requirements relevant for creating a moat, plus changes in the privacy laws that required complex work-arounds, diverted focus and slowed down progress. Discovering that companies with similar goals were able to raise larger amounts and were moving faster only added pressure.

When the product was finally launched, the market changed, and with it, the opportunity the founders saw when they initially raised; their users–tech companies like themselves–changed their spending habits as the market tightened, which negatively affected sales. A significant amount of money remained in the company’s account, but the team was determined to give it back to investors rather than attempt to pivot. The next step was to prepare for shutdown.

Takeaway: The biggest challenge you’ll face will be to come to the conclusion to close, and to explain to yourself, your co-founders and the team the reason for the decision.

3. Investor fatigue

Company 3 is a fintech startup that boomed in the pre-COVID days. It raised a growth round from a top-tier investor just as we learned to spell “pandemic” and put on facemasks before interacting with people. The pandemic killed the business, and the company did not recover. Several attempts to pivot resulted in a product that yielded slow growth, but nothing that resembled the success of the pre-COVID days.

Thanks to cash conservation actions and US government COVID funds due to the loss of revenue, the company was not about to run out of cash–on the contrary. But financial results continued to be far below expectations. The growing gap between valuation and results as well as board fatigue caused investors to ask that the company fold operations and return the remaining cash to investors.

Takeaway: Your focus here is to conserve cash in order to maximize shareholder value.

What Do You Do Now?

Ideally, the first attempt in all three scenarios is to sell: sell the company as a whole, find a good place for the team, (aka, acquihire), and sell the IP. Though these alternatives require time, founder bandwidth and motivation, they often yield the best outcome when there is no viability to keep running the company.

However, selling isn’t always an option, or can take time that you don’t have. In the meantime, you can still sell other assets such as desks, computers, other hardware, anything, while you focus on closing the company. The cash income from selling equipment will give you breathing room if you are down to the last dollar.

And now, we will go step by step through what needs to be done to close your company.

Cut the burn

Operationally, the first order of business is to cut the burn. In my view, this is the right first step in any case, but certainly if your resources are limited and you need to maintain systems for existing users of the product until they transfer–then this is a must.

Closing a company may take from a few months to a year, or more, if you have subsidiaries or are operating in a highly regulated business or country. Also, the act of closing a company costs money — from paying taxes and fees to employing accountants and lawyers. You’ll need every dollar you have while keeping in mind that you have no additional resources to fund un-budgeted costs.

If your company is closing because you ran out of financial resources, cutting the burn is beyond a recommendation: it’s mandatory. Even if you prepared in advance and created a closing cost fund, you are likely to come across unexpected costs. Your target here is to avoid facing the unpleasant reality of finding resources from investors or founders’ pockets for the unaccounted-for expenses.

We’ll talk more about how to cut the burn shortly.

Unwind the business

We now move to the nitty-gritty process of unwinding the business. Like everything else that I’ve described so far, it is hard, painful and not what you set out to do when you first started. I hear from founders that have gone through it that it is a time of reflection, of processing internally what has gone awry, what they could have done differently, and lessons, mostly personal.

The focus of this phase is to look at the three main commitments you have: employees, customers, and service providers. I recently recorded a short video that goes into this in more depth. You can take a quick look at it here, or keep reading:

1. Employees

Parting ways with the team that was built with effort and attention to capabilities and company culture will be hard. You will need to identify a skeleton team that will be necessary to keep the product going until customers are migrated.

In addition, someone will need to be in charge of the back office finance. It could be a strong office manager, your finance lead or one of the founders. The rest of the team will part ways. If you have subsidiaries in other jurisdictions, find out in advance what is legally required in this case. In Israel, for example, you will need to consider employees on maternity leave and army reservists to ensure they receive due process and fair notice.

When looking at the financial commitments associated with your employees, look into accumulated vacation days or sick days that you will need to pay. Those will increase your employee costs for the final months.

2. Customers

When it comes to winding down your business, your relationship with your customers is governed predominantly by the terms of service (ToS). It should define what happens in the case of separation and the amount of notice that the company committed to. The notice period will determine the length of time the company will need to be operational before servers and support are shut down. If your company provides an essential infrastructure or security service, you may want to assess whether the notice period provided in the ToS is sufficient.

You can follow this link for a helpful guide I created on how to control the messaging around closing your business across different media outlets.

3. Service providers

As you start thinking about cutting down the burn to the minimum required, prepare a list of all software, system products and services the company is paying for.

Stop auto renewals and look into exit clauses of large ticket items, particularly cloud services, Salesforce, Slack, and Gmail. In some cases if there is no exit clause or if it is far away, you’ll need to negotiate early termination with vendors. If that is the case or if there is no exit clause, it may work to your advantage to negotiate pre-payment of the contract in exchange for a discount. For the sake of your closing budget, track any potential penalties.

Talk to your lawyers and accountants to budget this project so you have visibility into their costs, which could be hefty. If your bookkeeping and salary processing is done by an outsourced service provider, do not forget these costs.

Another big item is your insurance policies. Check to see what you can bring to an end immediately (for example, office content and third-party insurance), and what will need to run over for several months or longer, like D&O insurance, omissions insurance, product liability insurance, etc. Some of these may need to be kept alive for a longer time and that, too, will influence your budget.

Don’t forget other liabilities

Your office lease is another huge liability that you want to dive into before you decide when to close. Look into the timeline for ending it and find out:

• Can you sublease?
• How much time would you need in order to find a tenant?
• What is the penalty for breaking the lease early?

You’ll need to time this well in order to prepare a budget for your rent payment during the transition and to provide notice such that you would not lose the deposit, which is a potentially large income for your closing budget.

Pull together expected income and expenses into a monthly tracking spreadsheet that will help you manage the situation and bring you to clearing all your liabilities. Don’t forget the small-ticket items like bank fees, or lease payments on office equipment (e.g. printers, coffee machine, etc.). I created this budget template, which is the basic list of costs and revenue, to help get you started and ensure you have the main items covered.

Deal with debt

Things will get more complicated if your company has venture debt or banking debt. If there are no resources to pay off the outstanding debt, the entire closure process will need to be coordinated with the debt holders, who effectively become the owners of the company at this point since they are likely to have the IP, bank account and/or equipment as collateral. They will be highly motivated to sell assets to recover what they can, and they will likely get involved in managing the cash flow to ensure the excess amounts are used to pay off the outstanding debt.

Take Care of Yourself

One of the founders I spoke to suggested that you try to move efficiently through these tasks and not let the process drag on. He made the point that because closing a company takes a lot of time and energy, as time goes by, you will have less patience for the nitty gritty of these tasks and the burden on you will feel heavier.

You will be riding an emotional rollercoaster during this period. Fear and pain prior to making the decision will be replaced with relief that may again turn into pain and sadness when you send off employees. Find someone who can support you. It could be a co-founder, a coach or therapist, an investor you trust, or a combination of these. Make sure you have someone to lean on and share your emotions with.

Closing a startup is hard. Remember that the biggest asset you are taking from this company is your experience. It’s important to mention that, while we have a lot of repeat entrepreneurs, for many of them, the repeat wasn’t from one success to another but from one failure into a success. And that really is the process; we take our experience from one company, even if we have to shut it down, and learn how to do it better the next time.

As heartbroken and sad as you might be now, you have accumulated unique experience that will serve you in whatever you choose to do next.

How to Close Your Company: A Guide for Founders was originally published in Aleph on Medium, where people are continuing the conversation by highlighting and responding to this story.