After being robbed on the beach Amir Elichai vowed to transform the emergency services industry. His startup has been making great strides to thrust 911 services around the world into the future. His startup Carbyne has recently raised over $60M in investments from top-tier investors like Elsted Capital Partners, FinTLV Ventures, Founders Fund, and Hanaco Venture Capital.
In this episode, you will learn:
- How Carbyne is transforming emergency services
- What’s most important when raising a seed round
- How investor expectations change with different funding rounds
- Surviving business emergencies like COVID
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Amir Elichai:
Amir Elichai is the Founder & the Chief Executive Officer (CEO) of Reporty Homeland Security.
For more than 12 years, Amir Elichai has repeatedly demonstrated his capabilities as a transformational leader – combining business acumen with strong financial discipline, deep operational insights and organizational management. He is a growth-focused,results-oriented, and solutions-focused leader with proven history of bringing analytical insights and pragmatic solutions to key business challenges.
Amir Elichai is a former Israeli Army officer who served in a different positions in the special elite forces and the intelligence corps. He earned his LLB & BA from IDC.
Connect with Amir Elichai:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. I’m super excited with the guest that we have today – again from Startup Nation. There seems to be a machine there of incredible founders that is pumping out one after the other. So, without further ado, let’s welcome our guest today. Amir Elichai, welcome to the show.
Amir Elichai: Thank you. Thank you very much. How are you?
Alejandro: Very well. You were born in Israel in Tel Aviv there, so how was life growing up there?
Amir Elichai: I think Israel is probably the most amazing place on earth. It’s an amazing combination between good people, good weather, good food altogether, and, obviously, the great ecosystem for companies like Carbyne to succeed. So, all-in-all, I would give it the grade of 9.5, I would say.
Alejandro: Very cool. In terms of you growing up, did you have anyone in the family, or how did you get that drive or that bug around entrepreneurship. Was that developed later on, or was it something that was there in the backdoor always nurturing?
Amir Elichai: Actually, it’s a good question. I think my parents were full-time workers in a very well-organized big corporate. My mom in the healthcare space and my father in the aerospace industry – no entrepreneurship at all. I think the biggest investment that they had was when they bought their home, and since then have been working on their savings and nothing really beyond that. Probably something raised from the army, and probably something raised from my personal experience that I’ve been through, but nothing came from my personal background, I would say.
Alejandro: Going to the army because the army is a big deal in Israel. Everyone has to go through it, so in your case, I find that being an entrepreneur and doing startups is like going to war. It’s like the same thing, obviously, in a different way. You don’t get hurt physically, let’s say, but it still a painful and full of emotions type of roller coaster. How was that experience for you of doing the army, and what were some of those traits that it gave you now that you’re an entrepreneur?
Amir Elichai: This is a great question. I think, in general, being in the army when you’re 18 instead of going to college or university, you basically found yourself in a slick organization with certain rules that you have to accommodate, which is probably making the Israelis, I would say, a bit more mature earlier than others and put you in front of dilemmas and situations that you’re not really supposed to experience when you’re 18 years old if you’re looking at the overall type of world and what people in our age used to do. Of course, everything you have comes in forms. I would say the advantage of being in the army is basically to show you how to treat things that are related to work under pressure, how to be well in big teams, where you have to get along with people that you don’t know, how to motivate, how to motivate your subordinates, work under pressure, putting red lines. If you’re thinking about those things, they’re very similar to the thing that you’re going to do as an entrepreneur and as a CEO within your internal small organization that is like your own small unit with the army. Of course, there is nothing to really compare between the two, and as you said, there is no risking your life. But being an entrepreneur, being a founder with another two or three founders that are working with you, this is your small unit in the army, which is, as you said, going into the world and going into a fight with big giants to tackle something. If you have those fears coming from the army, I think it’s increasing your situation to be more successful. Not always, of course, but it is absolutely giving you a lesson that you won’t be able to learn anywhere else.
Alejandro: In your case, after the army, you packed the bags, and you landed in New York City. How did that happen?
Amir Elichai: This was an absolute coincidence. Actually, in my specific unit where I was, we had different agencies and entities that came to us to teach us what we can do after the army. While a lot of my friends went on very long trips in Latin America, one year after the army, losing their minds somewhere drinking and doing other stuff, I don’t know why. I had a girlfriend at the end of the army, and basically, we had a vision to move and live in New York. In one of the pictures that we received from one of the [6:21] agencies of the Israeli Defense Forces, at the end of the presentation, I came and said, “This is very interesting. I would love to do it.” They said, “We have openings in Ethiopia, in Egypt, and in different places.” I said, “No, no, no. You’ve got it wrong. I will do it in only one place. I will do it in New York if you want.” I said, “Let me come back to you,” because it was very unusual. On the one hand, it’s very attractive and sexy to live in New York. On the other hand, when you’re finishing the army, all that you want is to save money, and, obviously, New York is not a great place to save money. So, I found myself here. I finished the army ten days after I started a course for a few months, and then moved to live in New York and celebrated my 23rd or 24th birthday here in New York. It was an amazing, amazing experience where it opened my mind to a new world, different opportunities, new kinds of people, and the rest is history.
Alejandro: It’s interesting because I also moved to New York City at the same age as you did. For me, it was an eye-opener. I’m sure that for you being surrounded by the best of every place in the world that you can think of in terms of intellect, ambition, and all of that, I’m sure that played quite an influence as well on you and the way that you’re thinking about the future that you want to live in. Tell us about this.
Amir Elichai: I think it’s starting from the smaller things that you can imagine. First of all, the transition from being in the army in such a kind of – I will not say boring because it’s not boring, but it’s a very structured place, where there is not too much space to think out of the box. You have certain rules you have to accommodate. Suddenly, you will find yourself without your family, without your friends, being alone in front of the world, in the biggest city in the world in terms of all that you just mentioned: business, traffic, people are running everywhere, buildings. You’re asking yourself, “What is my role in this huge concrete jungle? You basically stop and think. What can I do? How can I leverage this place? How can I do more? At the time, I worked for one of the agencies in the Ministry of Defense, so it’s not that I was jobless or something. I had enough things to do, but you are meeting people, and you say, “Okay. This is an amazing place. I have an opportunity. How can I attack that in the next step?” It absolutely opened my eyes for what other things you can do in this world, which is not the thing you’re used to seeing in Israel, which is pretty small and kind of a limited place, I guess I would say.
Alejandro: And it opened your eyes potentially to becoming a lawyer, at least to study law. What were you thinking? From recovering lawyer to recovering lawyer, what was going through your head to study law?
Amir Elichai: This is a good question. I started here in my first company in New York, and then it was a mutual investment banking field. At that time, I used to work for certain people who told me that, “You have to get a degree, and you have to learn something.” So, after 1.5 years, I went back to Israel. I graduated from Law and Business School. I knew from the beginning that I wasn’t going to be a lawyer. I never practiced. But I think that law, in general, is kind of the new BA. It’s like the basics you need to know, and it’s in everything that you’re doing. If you are a CEO, CFO, salesperson, working in product management, or whatever, at the end of the day, legal understanding, in general, is the basic in anything you will do. This is why I did it. As I said, I never practiced, but it was a great kind of knowledge to be captured, and this is why I did it.
Alejandro: Very cool. I agree with you. It definitely gives you a base, and especially if you want to be making deals, you need to interpret what is on paper because it can come upon you later on. After you finished and you got your law degree, you started getting your feet wet into dealmaking. You talked about your previous business, the I banking. Essentially, that is the segue into starting your business now. Tell us about Carbyne and how you came up with the idea or how it came knocking. As Richard Branson says, ideas are like busses, and it’s all about getting into the right one – getting the right idea into the right bus, so how did the idea of Carbyne come in front of you, and what was that point or that inflection where it pushed you over the edge to say, “You know what? I’m going to grab this, and I’m going to execute and bring it to life.”?
Amir Elichai: Before I jump into Carbyne, it’s worth to mention that before Carbyne, even during my school, university, and law school, I was involved in the startup ecosystem in Israel a lot from my own thing with Sky Project to helping companies to raise funds. We helped companies to raise tens of millions of dollars. I was taking myself into building a small investment vehicle into cybersecurity solutions, automotive vehicles, etc. Basically, I probably reviewed myself and with my team at the time, something like 1,500 (I don’t know the exact number) of opportunities. I had a good understanding of what the customer is like, what the industry needs. I had a good understanding of the verticals that are growing, etc. For example, we chose to focus on cybersecurity back in 2010, where we had in Israel 100 good companies. Today, in this stage, you probably can find in Israel 600 companies in the cybersecurity space. So, I think we’ve been recognizing those kinds of trends in the early stage, and this prepared me to start my own venture as always, starting with a personal experience. I’ve been robbed at Tel Aviv Beach. It was a super real story. It was 7:00 pm, Gordon Beach. I was dating a girl, and we were robbed by three people in the middle of Tel Aviv. When this happened, I tried to call emergency services to report what was happening. The call-taker asked me for my name, where I was, what was happening around me. I talked to myself afterward, “How come in the 21st Century when we’re dialing emergency services, we need to deliver so much information, and how come when you’re ordering Uber, the driver knows your name, where you are, your credit card number, and anything about you. It doesn’t make sense. How are we making data accessible for emergency services worldwide? This is how I started. I did my research. I was never a 911 call-taker before. I never was involved in any voluntary organization to help emergency cases, but I recognized a need. What I did immediately was to validate that this need is not a one-time event that happened to me, and it’s something that is happening worldwide, and there is a need for it. In a few months, I realized that this market had not been changed since Bell invented the phone, basically, and there is a need for a change. I couldn’t imagine that Carbyne would grow to what it is now, but overall, I think it’s a combination of a need that I personally experienced, a big market seeking for a change, which is not sexy enough for many, many companies to get into, which represented a huge opportunity for growth and for being a very, very big company. Those kinds of things and feedback that I get from the industry forced me to start this company.
Alejandro: How long did it take from the moment that you were robbed at the beach to the moment that the company was up and running?
Amir Elichai: I don’t understand the exact date when I was robbed. I think it was at the end of 2013. I had it in my mind, and I did my research. I was still a student. In July 2014, we decided to move forward and to incorporate this as a real company. Seven to eight months after that, we received our funding and started the company.
Alejandro: That’s amazing. What ended up being the business model of Carbyne? What is Carbyne today, and how do you guys make money?
Amir Elichai: Currently, the company is about 130 people working from four offices worldwide and providing an advanced ecosystem for the government to be able to interact in a better way with their citizens in emergency and non-emergency events. The company is giving services to 400 million people and providing Software as a Service for government, which can be implemented in no time, and to convert any incoming call into an emergency number to location services, video, images, medical information, and lots of other stuff and without the need for the citizen to download an application and without the need for the government to replace any of their current ecosystems. This is in a very, very high level what we’re doing.
Alejandro: You probably have heard of many, many crazy emergency calls and experiences. What is the typical emergency, or what is the typical experience that you guys facilitate or provide?
Amir Elichai: Wow. Our system analyzes something like 1.3 million calls per day. We are the biggest, richest data provider worldwide. In 2020, as you can assume, was the emergency year. I would say we’ve provided 155 million locations to emergency services around the world and 1.3 million minutes. So, it’s really, really different. We saw anything from emergency medical reports to car accidents to good cases like women delivering babies with Carbyne solutions, bank robberies, and basically, everything passes through our platform. Good and bad cases, but I think in most of the cases, our solution was really helpful and really helped the people in distress to get a better response.
Alejandro: How much money have you guys raised to date, Amir?
Amir Elichai: Close to 60 million.
Alejandro: And you were mentioning that the first trench came in pretty quickly. How would you say the progression of getting that money in has evolved over time? You had experience on the investment banking side doing some deal work in the past, so you knew how to get it done, but it seems that it was very early on when you were able to get money right away. How has that experience of being exposed to it from more like the dealmaker’s side or the investment bankers’ side to actually you being the operator and you needing that money in order to execute?
Amir Elichai: I think it’s a very, very good question, and it’s not black and white. It’s not like something I can tell you that you need to do a, b, and c, and you will be a successful fundraiser or not. But I think there are the basic elements that every entrepreneur needs to make sure that when it comes to raising funds, those are the key elements. Especially in the seed rounds, for example, no track record, you’re not a second timer; it’s the first time that you are building a company. What is important is the team that is with you. Who are the people? What are the skills that you’re bringing? Why are you unique? Obviously, the idea that should be making sense at a level that they invest. The people that you are pitching this idea to probably have seen many, many deals before on a daily basis, so they need to be convinced there is something unique here. You need to do your market research and to make sure that your total available market is big enough and has enough space for you to grow into. Those are the key elements in a seed round: strong team, strong idea, and the big market to play in because, at the beginning, it’s kind of a mess. The investors don’t know you. If you have those three elements, it’s mostly going into the strong team. If you have those elements, you will be in the higher trenches to raise money.
Alejandro: How have you seen, for example, those expectations shift or perhaps change as you continue to execute because you’ve done your seed, you’ve done you’re A, you’ve done your B, so how have you seen those expectations? And, perhaps, the need or what you wanted from the investor for your business because it’s not the same network that you’re looking after at a seed round versus maybe that you’re looking more at a Series B where it’s all about expansion and growth. Tell us about this a little bit.
Amir Elichai: A very, very good question. There’s a long answer here. First of all, I think the network is building a network, and I will explain. You are surrounding yourself with certain people, with certain investors. Each one of them knows certain people and certain investors. Each one of them knows certain people and certain investors, and you are coming into a place that, with two phone calls, you can probably reach any funds or to any person that you want to invest in your company. My first lesson is, you need to surround yourself with people that are strong enough in your industry to be able to grow your network with their own network. You know ten people. Those ten people know ten people, so it’s 100 people. Those 100 people each know ten people each, so it’s 1,000 people. This is my first step. In the seed, you are surrounding yourself with x-amount of people. The response is, obviously, even bigger because they have teams, and they have people working with them, blah, blah, blah. They know 20 people, 30 people, 40 people. That’s #1.
Related to the staging and what you’re looking for etc., there are the key metrics or what investors are looking for at rounds seed, A, B, etc. See the team, idea, or prototype, and strong and big market. Around A, you have early adaptors, a few logos, the beginnings of revenues, understanding the market, optimizing product/market fit, and you’re getting into the prophase. You are going from $1 million to $5 million in recurring revenues. You have the product/market fit. In the B Round, you’re raising this fund that will take you to the next stage, which is the growth phase where you can purely say, I’m in a product/market fit. All I need now is to put more fuel into the engine to scale my business and do 10x because I know I found the formula to make this business a success. This is the traditional path. Besides that, I would say there are other elements that you cannot really predict, which is a bit of flake, as well. I can tell you that I know companies that had an amazing trajectory before COVID, and then COVID hit, and they totally collapsed. And I know companies that were struggling a lot before COVID, and then COVID came, and they are exploding, and everything was amazing for them. So, I think luck – I would not say this is like 50% of success to be successful or a chance to be successful, but I would say that you need to have a bit of luck in this journey, which is always important, and take all those elements into consideration. If you understand those elements, I think you are increasing your chances to win this war, which is absolutely not an easy one.
Alejandro: And definitely in luck, preparation meets opportunity. People create their own luck. It’s not like things all of a sudden fall on your plate, but I’m right there with you. In your case in Carbyne, you were alluding to it. We’re coming out of what has been an emergency year. I’m sure that perhaps an emergency year is something that propels and positively influences a service like Carbyne. How would you say COVID has impacted the business?
Amir Elichai: From March to December 2020, COVID Carbyne grew by 360%, and this is what led our last round of $25 million. It was a greatly successful year, but, on the other hand, it’s not like we were sitting down and hoping for good when COVID started. We had to make some tough decisions that influenced across the company, such as, for example, I decided as the CEO of the company not to let people go home at all. We didn’t know how governments would react. We didn’t know if governments would be able to pay. We didn’t know how governments who used to meet you face-to-face before COVID were willing to deal now remotely – is it possible? Yes. No. Can they sign an electronic signature and DocuSign as we all used to do? Is it something that is valid for them? We were in a very big answer, so I decided to cut salaries for the entire company, but not let anyone go. We gave equity for this kind of a salary loss from March to July. In July, we saw that everything was basically exploding, and we are delivering, and things are going in a very good way. So, all in all, I think we did very well, and then we decided to return everything to normal and actually expand the teams and grow. We’ve been lucky enough to be in the right industry with the right solutions. But again, we did the necessary steps in order to make sure that we are adjusting ourselves to this new environment.
Alejandro: Absolutely. Talking about new environments and the future, let’s say you go to sleep tonight, Amir, and you wake up in a world where the vision of Carbyne is fully realized. What does that world look like?
Amir Elichai: Wow. This is a good question. I think moving forward, what we want to do is to connect the world into public safety and to connect public safety into the world and to make sure that all of these are fully syncing together. We truly believe that there is no reason why sensors and IoT, city cameras, and you name it, will be able to detect emergencies before someone human dials 911. Anything that can deliver information, anything that can communicate in case of emergencies, should be connected to emergency services. But it’s not enough to connect them to the emergency services because you really need to create what we call the Next-Generation Q. The Next-Generation Q is that currently, 911 when you’re dialing, there is a human sitting who picks up the phone saying, “911. What is the location of the emergency? What is the emergency?” And starts to ask you many questions. Technology is like NLP construction, which can aid the way that those call-takers are doing their job. The ability to provide sensor information to the systems without the human needing to tap into any kind of information can ease a lot of the way those call-takers are doing their jobs. This job is very stressful. There are a lot of human errors, a lot of human mistakes. They’re working under pressure, so if you can improve that system and make it more efficient with computer vision or artificial intelligence, and other technologies that are out there and serving other industries, I believe that we will be able to create a system that is almost, I would say, fully automatic and minimize human mistakes, increasing efficiency, and simplifying the access of humans into emergency response. This is what we would like to do. There is a long way to make it happen, but I think we are doing the right steps in order to make it work.
Alejandro: I love it. Amir, let’s say that I’m giving you the possibility to get into a time machine, and I’m taking you back in time. I’m taking you to that moment where you were coming out of law school, and you were starting to see some dealmaking here and there and being with startups and right before launching your business. Let’s say you have the opportunity of having you, your younger self, Amir, not only being there but listening to what you have to say – the now-Amir that has gone through all this stuff with Carbyne. If you could go back in time and give that younger Amir one piece of advice, what would that be and why before launching a company based on what you know now?
Amir Elichai: Wow. I have a lot of lessons that I learned throughout the recent six years. I would say that probably don’t compromise on very, very good people. I think this is the key. One smart person once told me that every successful company needs two things: cash flow and good people. I think I would say, “Do not compromise on the talents that you’re hiring because at the end of the day, if we are going to the analogy attitude that started this conversation with, “These are your friends that are going to run with you into this war, and you need to surround yourself with the best people.” I think investing time and finding the most talented people that you can find in order to be better prepared for the unknown is something that I would advise my child when he will build his company.
Alejandro: I love it. Amir, for the folks that are listening, what is the best way for them to reach out and say hi?
Amir Elichai: I think either through LinkedIn, Instagram or email, which is, [email protected]. I’m happy to speak with everybody.
Alejandro: Amazing, Amir. Well, thank you so much for being on the DealMakers show today.
Amir Elichai: Thank you. It was my pleasure.
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