Shardul Shah — "I wired the money before knowing what they were building"

**Shardul Shah** (0:00)
Acquisitions to be successful, my view is they should be small or they should be large. Like middle size acquisitions are the most difficult for both sides to be successful. I have drunk the Kool-Aid of Wiz, more than anyone on the planet, right? And so to then say I'm gonna switch to iced tea is super hard, right?

**Eric Newcomer** (0:20)
What's the way for somebody to sort of break into being in your awareness?

**Shardul Shah** (0:25)
Well, I'm not everyone's cup of tea.

**Eric Newcomer** (0:27)
Am I crazy?

**Shardul Shah** (0:28)
Yeah, sort of, I don't know.

**Eric Newcomer** (0:30)
When Google announced it was buying Wiz for $32 billion, one name quietly became the talk of venture capital. Shardul Shah, partner at Index Ventures, was one of the first checks into Wiz, and it wasn't luck, it was pattern recognition. Shardul has spent nearly two decades at Index, building a reputation for finding the right founders before anyone else does. Datadog, Duo Security, Coalition, the list speaks for itself. Today, we get into the Google Wiz deal, his human first approach to spotting, the next generation of great founders, and where he's looking for his next big bet. I'm Eric Newcomer, the author of Newcomer, the subsect that tracks the inner workings of startups and venture capital. Follow me and my team's writing at newcomer.co. And without further ado, here is my conversation with Shardul, one of the top venture capitalists in the business today. All right, super excited. This is a big week for you. I'm here with Shardul Shah on the Newcomer Podcast. Thank you for joining me.

**Shardul Shah** (1:32)
Thanks for having me, man.

**Eric Newcomer** (1:34)
So we're here, you know, in part, I guess we should have like, you know, party hats and stuff. Google's $32 billion acquisition of Wiz, the Israeli cybersecurity startup, cleared, the check cleared this week, is that right?

**Shardul Shah** (1:47)
Yeah, closed on Wednesday.

**Eric Newcomer** (1:48)
Yeah, and Index, and you are, you're the largest investor shareholder, right?

**Shardul Shah** (1:54)
Yeah, and so for the party hat, I'd prefer a cerebral Valley cap. I mean, we could have been matching at least.

**Eric Newcomer** (2:00)
Yeah, so I guess for people just paying attention, like explain, you know, why Google is spending all this money to buy Wiz in the first place.

**Shardul Shah** (2:10)
Yeah, look, the best companies are always bought, not sold, right? And it starts with the founding team.
It's a remarkable run over six years, but it took over 20 for this to happen. The founders have had so much trust. They're such different personalities that when they came together to create Wiz, they created a culture that could move so fast in an existing category and really disrupt the market. So I think ultimately what you're acquiring, whether it's a small, medium or large acquisition, at the core is a group of people and a culture that comes with it.

**Eric Newcomer** (2:49)
One person close to Google when this announcement first came out mentioned to me, it was just in a world of AI, cyber attacks are going to become even more likely, obviously. We need to be very aware of cybersecurity. In some ways, this deal is a sense that Google needs to be ready if there is a major massive cyber attack, if they need to defend their customers. Obviously it's an offering that they can provide cloud customers. I mean, now, you know, since the deal closed, now we're at war with Iran, and that's obviously increasing the risk of cybersecurity. So like, explain, you know, where Wiz sits in terms of cyber defense, why and why Google would want to, what they're really delivering to customers.

**Shardul Shah** (3:28)
I think you nailed it. There's a cloud tailwind, right? More and more workloads are going to the cloud. We've been on this transition for over a decade. Finally, for example, over the last five years, the pharma industry has moved all of their data to the cloud.
Second, there's a security tailwind, right? There's more need to secure against risks for large and small businesses across the world. And the amount of risk is varied. I'll come back to that in a second. And then third is AI, right? Everyone knows we live in an AI era, and with more AI workloads, there is a demand for more security. On the back of those three tailwinds, it just so happens Wiz is at the center. And like that's not by luck, right? They've been intentionally crafting their business to be there. They started with a platform that served large enterprises from the get-go. And so it's really complementary with all of the resources and the AI infrastructure that Google has.