Ezra Gardner serves as the Chief Investment Officer (CIO) for Varana Capital. He is involved in the investment team’s research and due diligence, which is broad-based and encompasses financial, market, and competitive analysis, management quality, investor base, and much more. While some CIOs might describe their role as “leading” the research process, Gardner acts as a strategic analyst, asking questions and trying to learn more about the businesses and sectors the team invests in.
Balancing Risk and Vision
I take the classic approach of monitoring concentration and correlation risk across our portfolios. But more prosaically, I adhere to the mantra that risk means “more things can happen than will.” This drives my thinking to explore more risks than most think are possible. At the deal-construction level, we leverage privatemarket flexibility to craft bespoke, win-win structures that protect our downside and ensure our companies have the capital they need to grow. Once we have done this, the real risk management begins—HELP YOUR PORTFOLIO COMPANIES SUCCEED! What does this mean on a practical level? Do not just show up to board meetings and worry about the money you invested; think of yourself as a founder and business owner. Ask questions that can help the company grow revenues, manage expenses, hire properly, and think differently than the competition.
“Ask questions that can help the company grow revenues, manage expenses, hire properly, and think differently than the competition”
Culture Shapes Startup Growth Globally
Over the years, I’ve never ceased to be amazed by how the best entrepreneurs attract top talent and rapidly grow their teams. I call this the “Pied Piper Principle.” This is the literal definition of culture: getting others to follow you into battle and investors to commit their capital to the mission. So, to answer your question: culture is everything. Without it, the PPP fails.
Driving a Truly Transformative Tech Ecosystem
We are primarily deep tech hardware investors (yes, I know hardware is hard and takes a really—really—long time—but maybe that’s why we like it). So, we always start by asking ourselves two questions:
1. Can this actually be built?! AND
2. If it could, would it be important?
The first question is the signal, and the second question eliminates the noise. You might wonder how that can be if my second question is so open-ended. Perhaps we can save the full answer for a longer interview—but I won’t leave you hanging. So, think about it this way: if the answer to the second question is that this solution costs the same or less than the current bestin-class market solution and uses less water or power (the two most precious resources we have), then it’s important, and you’ve eliminated the noise.
The Sage Advice for Aspiring Entrepreneurs
We predominantly invest in Israeli startups that are primarily B2B-focused and looking to do business in the United States, so we think about this question—and this advice—all the time. What we tell entrepreneurs is this: from the very, very beginning of your journey, think of yourself as an international company, since that’s what you must become. It sounds like a small thing, but it isn't. If the attitude of your team from birth is ultimately to open an office in the United States and to sell to U.S. customers, you will make decisions and behave with this goal in mind.
