Nearly 18 months after Liran Eshel raised an undisclosed amount in a Series A round from
Earlier this month, CTERA, which has offices in Palo Alto, Calif., and Petach Tikva, Israel, released the CloudPlug, a cloud computing data-storage and encryption device ideal for small businesses and some consumers.
Eshel has lived the startup life for about a decade now. Before launching CTERA in May 2008, he was CEO of SofaWare Technologies, a subsidiary of Internet security provider Check Point Software, where he was responsible for defining strategy and overall executive management of the company for more than eight years.
Eshel splits his time traveling between Israel and the United States, which he says has made him an expert on airline cuisine. PE Week Managing Editor Alastair Goldfisher chatted with Eshel about the company’s fund-raising history.
Q: Your company raised a Series A round just last year when it was launch and is now delivering a product. Was a quick ramp-up to product always the plan?
We had a very clear vision from day one. We knew we would embed software on the local NAS [Network Attached Storage] device to eliminate the need for desktop software to connect to the cloud, and we knew remote management capabilities were required make it an attractive channel play. All we needed were the engineers to make it happen.
Q: Benchmark would seem like a logical VC backer, since the firm has operations in Israel and the United States. Was that an important consideration when you raised funding last year?
Several top firms have talented teams in Israel, because the local technology scene is very active. Benchmark’s reach and influence is of course a significant advantage. But most attractive were Benchmark’s understanding of the challenges of launching a global startup from Israel and their ongoing commitment to their portfolio companies.
Q: Now that you have released the CloudPlug, do you plan to raise more capital from Benchmark or others?
If you believe it is unusual to deliver a complete product to market on our initial round, you must have a hunch on the answer to this question as well [he smiles].
I will say this. CTERA has no plans to slow down. We have every intention of ramping up even more quickly. We will not hesitate to make the right investments to further secure our innovation leadership position. Benchmark continues to support us in that goal, and new supporters could accelerate that pace even further.
Q: What advice do you have for other startups raising capital right now?
Focus on building a company, not a technology. Investors are looking for long-term plays since they understand the ‘quick flips’ are a shot in the dark.
Until larger companies start tossing around cash to buy immature startups, circa 2004, investors are looking for a real business plan with a revenue model.
Companies need to address a market need, rather than create a need to market. Customers, both consumers and businesses, are willing to spend to solve an existing problem.
Q: What did you learn about fund-raising when you raised VC financing last year?
Patience. Plan for a long, arduous process, have a crisp story, and expect to be rejected. And listen. VCs are no strangers to economic busts in Silicon Valley, and they recognize things change quickly. A ‘no’ is only a ‘no’ today. Tomorrow is another day.