Gary LaFever has been involved in the launch and exit of several startups already. Now he is tackling an even bolder venture with a big data startup that has already attracted tens of millions of dollars in investment. His latest venture, Anonos, has acquired funding from top-tier financiers, Aon plc, Ghost Tree Partners, and Edison Partners.
In this episode, you will learn:
- The future of data management
- Raising capital
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About Gary LaFever:
Gary LaFever is Chief Executive Officer at Anonos. Anonos’ first-of-its-kind BigPrivacy technology uniquely supports the transformative shift in data protection from policy-only approaches to a technology-based approach that granularly enforces data protection policies as now required under the GDPR and other evolving data protection regimes. Gary was formerly a partner at the top-rated international law firm of Hogan Lovells.
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Read the Full Transcription of the Interview:
Alejandro Cremades: Alrighty hello everyone and welcome to the deal maker show. So I am very excited about the entrepreneur that we have today because he it say is someone that has been a lawyer just like me so he knows what it feels like to transition. Ah, but they but more importantly, he’s been there. He’s done it multiple times with successes with lessons learn everything that you can think of and he’s also going to tell us what he’s up to with his latest journey so without further ado. Let’s welcome our guest today Gary. La Faber laugh lafa welcome to the show.
Gary LaFever: Thank you Alojandro Ah, very much appreciate it. Glad to be here.
Alejandro Cremades: So let’s do a little of a walkthrough memory lane gary. So tell us how was live growing up in Virginia.
Gary LaFever: All right I was great. I was the youngest of four kids. The only son had a mother who was now 92 So at the time she was a real pioneer in executive banking. And she’s to tell me you can accomplish anything you want to my father who ultimately was the senior civil engineer at a major municipality didn’t even have a college degree and he would tell me the same thing So I had the support of ah of a tight family and leadership and mentors. Who said you can accomplish anything you want to and so. I have and I will.
Alejandro Cremades: I love that now 1 thing that is very interesting in your background is that you studied a little bit of business. But then you went into low. So what happened what took you into the legal world.
Gary LaFever: Ah, but I came to my senses just as you did right? So I am a recovering attorney. But but what what happened what happened is I studied computer science computers and then was with Accenture for a couple of years
Alejandro Cremades: Ah I hear you.
Gary LaFever: But what excited me was not the bits and bytes and how you program the code it was what technology and particularly data could mean for society and I started to see that that could have a lot of impact at the at the business level. The concept level systems level even political and so I thought. But the heck why not get a law degree and and I did that and I’m old enough that at the time it was called computer law right? Everyone was fixated on the hardware didn’t take long for people to realize it was the applications in the data. But so that’s why I went to law school actually was to study What was then called computer law.
Alejandro Cremades: So then let’s talk about you know going into the legal route then because I mean you you became a partner in Hogan levels. A really great firm as well and you were there. You know for 10 years so obviously you know like you saw a lot of stuff. You know there. I’m sure that you engage with clients you were able to see you know some of the problems and and what happened for you to come to your senses and to say hey you know what pushing paper is not my thing I’m more you know into business and problem solving.
Gary LaFever: So so what was great for me is because I had the technology degree and it was the early days. Um I got to work on amazing matters that many of the other lawyers didn’t even understand so I was working with you know companies like compserve and prodigy. And and and and and Aol in the very early days and then as the internet started to evolve. It became very clear how transformative all this was and so I loved the intellectual challenge of practicing law. Um, but after I became partner as you’re billing. Your billing rate increases. It’s harder and harder to touch and be part of the day-to-day operations of clients and that’s what I really love right? is helping clients to be successful and so at some point I realized I’d be better served on the other side of the fence right? Um, instead of the dark side. The the light side as it were and so that’s that’s why I left Hogan but. Fantastic experience, great colleagues and I’m I’m glad I did what I did.
Alejandro Cremades: So then so then tell us about you know that moment where you realize it’s time to switch careers.
Gary LaFever: It was almost in fact, very very much similar to my realization that computers for computer’s sake were not as significant as what they they in the applications and the content could mean for society and for companies and for businesses for peoples right? Um. A similar realization was with a legal mindset and a knowledge and and actually a thirst for how technology and data could help shape what people could and couldn’t do that that would have a much much bigger platform for me to have a play and so that’s what I went and did. And have never looked back with any misgivings or or you know thoughts that it was the wrong direction.
Alejandro Cremades: And obviously you know like you’ve definitely used the Legal Background. You know you’ve been general counsel to for this company that you have been involved in so you did switch careers but you did not leave Behind. You know the yeah the legal knowledge So in your case you know with the first company. You know with women connect Ah what?? what?? what? How did that come about what how do you guys? go from ideation to launch. What were you guys doing and most importantly, what was the biggest lesson learned.
Gary LaFever: Yeah, so the founder ah of of womenconnect.com was a woman named Susan Defife who was very active both in politics as well as women’s organizations and she had a theory which is very true that women do business differently than men. And that by having a company that took advantage of and allowed women to network and to provide the types of support that they provide to each other while enabling them with business concepts and and opportunities you would strike a chord that was missing in in in the market and she was absolutely correct. And so it was a great opportunity. Ah for me because even though I was the only son and 3 sisters I’m still a man right to learn a lot of these things and and what I really learned to realize is it’s not the exclusive province of either gender but that women tend to be more cooperative. They tend to look for the win-win win as opposed to just being aggressive and so the the dual win at women connects with both being a partner with with with Susan Defife to take that company where it went I left when it was being sold to a bank. Um, and also to learn some more of those. Cooperative type business skills that I think particularly if you do business internationally you realize it’s just not a matter of gender. It’s also a matter of different societies jurisdictions backgrounds and being able to be open to those and to not only.
Gary LaFever: Respect those but embrace those and make the use and benefit of the differences between people was a fantastic learning experience.
Gary LaFever: So the outcome of womenconnect.com is I learned a lot about dealing with people who have different business perspectives and objectives there. 1 of the primary differences obviously was gender but in doing that I also learned that when you’d walk work with people from different backgrounds societal positions. Ah, geographies around the globe that looking and embracing those differences actually makes you a lot more intuitive and responsive and anticipatory of what can happen and that’s really an asset when you’re doing business globally. So while womenconnect com. Exposed me to a lot of the unique aspects of women, business owners and professionals in doing so it also helped I think expand my view of what you should look for when working with people hopefully quite different from yourself.
Alejandro Cremades: So then tell us about internet to anywhere because that was your next day your next business So tell us about what was the business model there and what was the lesson learned.
Gary LaFever: So it was a fascinating experience. A founder of an israeli tech company whose name was almost my name put in israeli Gideon Lefebre um amazing person at 1 point he was the head of the northern artillery command for Israel but he had this vision. And again, this is a while ago. He had this vision that the internet should connect anywhere so this is before tg to 2 2 g second generation telephony and so he actually developed and patented technology that would enable you to signal a device any device and wake it up. And wake up a particular application now that may seem just second to all of us now secondary and assumed but this is before any of that and so he actually was very early on the closest you had to that kind of technology was im messages in the very early days. And so I joined there as as the new Ceo us based Ceo and worked closely with gide and his team and it was all about literally extending the internet to anywhere and it was a fantastic experience but technology overcame us because as two g networks and other capabilities came about. They actually were designed to accomplish exactly what we were trying to do by overcoming some of the shortcomings of the prior infrastructure and so what I learned there is you have to have vision but you also have to have timing and the best vision in the world can be overcome with the timing of technological advances as as what’s happened that.
Gary LaFever: Internet to anywhere.
Alejandro Cremades: Now in this case, you know like for you. Um, you know this was a nice se way for if 10 so obviously the um, the um the f ten you know like was a pretty successful outcome. You know? So so so probablyly the the one of the biggest that you’ve had to date. But if 10 you know, tell us what was the business model if then and then what was that the outcome or was that exit that you guys did.
Gary LaFever: Absolutely and you’ll start to see a pattern here. It’s always looking for things that other people haven’t seen yet right? So with Gideon and internet to anywhere. It was all about actually expanding the internet everywhere people hadn’t seen it yet but they caught up at ften it was quite different. It was anticipating in the financial services financial technology market the shift from financial trading where you would pick up the phone and talk to your broker and you would could actually do it online and this is not mom and pop trading. We’re talking about proprietary trading groups hedge funds et cetera. And the next step after being able to interact directly with the market was automating the trading right? So black box. Okay algorithmic trading now, you’re putting your expertise into a system artificial intelligence machine learning. That’s directly interacting with the system. All sounds great. Here’s what people didn’t identify. Which we did the risk management in each of those systems only applies within the system. It’s a siloed approach to risk management whether it’s don’t trade in certain stocks don’t trade more than the certain amount of money. Whatever the rules may be that you’re trying to manage your risk. They’re confined within that one silo and the reality is you walk by a trading room and you’ll see people with 6 sometimes 10 or more screens on their their desk. They’re each silos so not only do they not have cross siloed risk management.
Gary LaFever: They also can’t take advantage of cross-s siloed opportunities so we developed patented and deployed the first technology that actually enables you to cross those silos and see in real time within milliseconds what your trades were going to do vis-a-vis each other so it’s not that you could see everyone else’s trades. But could you actually see yours and since in the in the trading industry different people have financial responsibility with your permission. You could also allow them to see it so what did this mean for the first time ever. It was truly real time transparency and when you have real time transparency. You can now exert. Real time control and what that meant surprisingly perhaps was that these hedge funds these proprietary trading groups could sometimes get 10 times as much money to trade because the bank who was backing them knew they couldn’t put a hole through the floor right? And so again for the first time ever. Different slices of data for different people for different purposes where you’re maximizing revenue and upside by minimizing fat finger mistakes bad trading. It can’t make a good trader out of you but could it could stop really bad things happen that you didn’t intend and so when the flash crash happened. Trillions of dollars were sucked out of the us market in minutes because of black boxes fighting with each other nasdaq omx who in the us has several exchanges but globally powers more than a hundred exchanges.
Gary LaFever: They swooped us up for 9 figures and said we need to put your technology everywhere around the globe and so what we learned there is that you can actually maximize data value by minimizing misuse of data and it’s not so much a risk management play as it is a data value maximization play. On the shoulders of risk management.
Alejandro Cremades: So what about the level of um thisibility that this gave you into exits you know because obviously you know nice outcome. You know? So so now you get to see the full cycle in a really positive light. So what? what did you get from that.
Gary LaFever: Yeah, learned a lot. Um and and really what it is is if you’re looking to sell your company. You are not going to be successful if you’re looking to change the world and you find someone who’s aligned in your vision of what the world should be. You have got an exit and you’ve got a fantastic opportunity to work with them for at least several years as you help them to get going and so in that instance, you had and and I’d have to say one of the most transformative things I learned both prior to the sale to nasek umx and afterwards is that most people viewed. Risk management as reducing bad things and that’s a very important part of what risk management is but when you look at risk management as a doorway to actually maximizing good things all kinds of crazy positive things happen and that’s a lot of what I learned there and that actually. The next company I was with was actually within Nasdaq and that was an example of that right? So we had an idea there was a contest within Nasdaq they call it the beehag contest who could come up with the biggest hairies audacious goal right? And then you’d have contests and see who could get funded. And the the beehag that myself my business partner at the time and still Ted Meyerson came up with was what if we put financial trading data in the cloud the commercial cloud and that actually had not been done for many reasons but 1 of them was broker dealers have to keep their data for 7 years for many different transactions.
Gary LaFever: And they have to keep it in write once read mini format worm preventing erasure or deletion had never been done in the cloud and so we actually had the audacity right? Big harry audacious goal to go to Seattle and meet with Andy Jassie who now runs all of Amazon but at the time he was running Aws and we said look we got to. Fantastic idea for you. What’s that put this financial data in the cloud can’t why not because there’s always a key There’s always a key that allows changes or deletion and you can’t have that. So with my legal background. Literally myself another colleague from Nasdaq and 2 a ws engineers locked ourselves in a room and said how do we overcome? What seems to be an insurmountable you know limitation on this business opportunity. Very simple and as ah as a recovering turner. You’ll appreciate this It’s called escrow put that key in a box figuratively right. And make it that it exists but in order to access that you have to have at least 2 parties agree. We got the scc the securities exchange commission in thinner to agree to that and over time the technological implementation of the concept has gotten much more advanced. But the fact that you could actually now have financial transaction data in the cloud and guarantee that it would not be modified or deleted without participation by number of parties therefore giving you that backstop was huge and has opened up I don’t mean want to guess the billions of dollars of transactions that now occur in the cloud but it’s something people said couldn’t be done.
Gary LaFever: And you just had to approach the problem from a different direction and perspective and yes, a solution existed.
Alejandro Cremades: So I mean in in in your case, this was the perfect se way into your baby now and on us. so so yeah so tell us about tell us about the sequence of events that needed to happen because I you see in Nasdaq you know now you were also part of doing that team that day transition that they.
Gary LaFever: Oh absolutely. Absolutely.
Alejandro Cremades: Part of doing a deal. You know doing an exit. But now you know all of us sudden Perhaps the time has come to really start your next company because once a founder always a founder. So so tell us about those different events that needed to happen in order for you to bring an honors to life.
Gary LaFever: Yeah, and and I don’t think it would have been possible but for what happened prior to that time. The first thing that we realized is again if if you always have vision if you’re always trying to see things that other people haven’t even started looking for yet it it makes every day exciting and what we realize is even with the success. Of the sale of f 10 to nasdaq ums ome and having the technology literally rolled around the globe. We only wanted it to be the beginning then we had the idea that turned into fincloud which was the joint venture with Aws but then we realized we’re just dealing with a very small part of the market. Financial transactions look how much data pervades the all of society and then we had another revelation what we had invented at ften was a real time reidentification engine a relinking engine that took data that appeared unrelated. And allowed for its immediate I mean literally in millisecond relinking and in doing so identification of potential issues therefore allowing for the risk mitigation but the real win is therefore allowing for greater use of that data greater value greater monetization. We realized if we could do that in the financial technology space. Maybe maybe we could do it for data around the globe. So after 2 years we left. We did pretty good with that sale and so we funded it ourselves and we had talk about a big hairy audacious goal. We thought. Well if you can reidentify data that doesn’t appear identified or related.
Gary LaFever: Okay, and show this interationships and correlations in real time and have this positive impact on the financial sector. What if you could do the opposite What if you could in real time deidentify unlinked data that other people have.
Alejandro Cremades: So gary for the for the people that are listening gary. What ended up being the business model of Anonos. How do you guys say make money.
Gary LaFever: Yeah, so the reality is if you look at what we did with f ten we exploded the expanse of what it covered and we also reversed its approach what the heck does all that mean well ften was all about relinking data that appeared unlinked and uncorrelated in the financial markets. And the epiphany we had is that there’s much more data than financial data. So what if we could address the entire market of data across all different vertical industries on a global basis and the idea there was by inserting structured chaos into data streams. Something people thought we were absolutely crazy to even think of because you didn’t have to do it. You actually could then reverse that process so you could selectively reveal data so much as we learned at f ten risk management for risk management’s sake is only reducing liability. But when you can effectively risk manage you can have greater data use and value. So what we set out to do and it took a couple of years to even determine if it was possible. We were funding this ourselves the proceeds from F10 is could you obscure data that otherwise was clearly visible. When I say visible I don’t just mean visually in fact, more. So it’s the relationships. You know you are who you are you live where you live you worked where you work you did all those inner what if you could obscure all those linkages and then selectively reveal bits or parts of them.
Gary LaFever: And so doing when you provide selective access to an asset people will pay more over time because they want different flavors of that asset if I want a piece of pepperoni and I have to buy the entire pepperoni pie when I want the second piece of pepperoni. The second slice. How? um, how much am I going to pay you for that. Already have it whereas if I can just selectively give you different elements of data at different levels of identifiability you would maximize the value in utility so happens when you do that? You’re also maximizing privacy and security and so by setting out to maximize the global value of data. By selectively controlling who could see and use what data when where why for what purpose for how long you actually protect it and secure it and now fast forward ten years later the entire world is begging for this because data is plentiful. Data is valuable. But it’s also risky and how do you make use of it without getting yourself and your customers and your partners in trouble.
Alejandro Cremades: And in terms of capitalizing the company gary. How much a capital have you guys raised to date.
Gary LaFever: Ah, we just closed a $50000000 financing so the total financing today has been $70,000,000
Alejandro Cremades: And what has been the experience or the journey of going through the different financings and also how have you been able to balance as well. The expectations from investors from one cycle to the next.
Gary LaFever: Yeah, but the the most challenging thing with anonos is the fact that we were going contrarian to everybody right? everybody was hey make maximum use of data relink. It do all these connections and you can make a lot of money that way we were shooting for at some point in time the ease of those relinkings and connections. Are going to come back and bite you so early on we we financed itself. It was friends and family. It was people who knew what we had accomplished at f ten and therefore they wanted a piece of the action. As I said my business partner Ted Ted Myerson it was like the the Ted and garry show. We want to be on the Ted and Garry show. They didn’t understand exactly what we’re doing but we’d pulled it off before. As time has gone on there’s less and less of that in the most recent financing $50000000 financing that was actually a consortium of insurance companies who looked at what the technology enables and said this is something that the industry needs. The entire industry not just the insurance company and so as time has gone on. There’s been more and more of a recognition of what our technology can enable in the market but the early years it was just believers right? Who didn’t quite understand what we were doing but believed that we could bring something about that would be needed in the future.
Alejandro Cremades: So then let me ask you this a if you were to go to sleep tonight and you wake up in a world where the vision of Anonos is fully realized what does that world look like.
Gary LaFever: That world is actually 1 where companies can control how much of their data is provided to their partners. Okay to the government to each other and to their customers in a way that is only the level that they want. And just as importantly, the consumers, the customers have that same control as well. So It’s selectivity. Everyone can share that level of data that is needed and necessary and agreed upon but no more because that information surplus when you give people more than they actually need or ask for is not an asset.. It’s a liability. And it also reduces the value of the asset that you want to share So That’s the future where people can feel comfortable. They can mathematically and auditibly prove that the data that they’re sharing is no greater than needed and what they approved that actually maximizes value for everybody and minimizes risk to everybody as well.
Alejandro Cremades: And also in terms of scope and size of the business I mean how how big is the is is the company. How big is anon today anything that you can share in terms of maybe number of employees or anything like that. Go ahead.
Gary LaFever: Yeah, we have 65 yeah, we have 65 employees ah and and more than half well about half of those actually a little less than half just joined us through an acquisition of a german company called status gmbh and we have three quarters of our employees in Europe. And so it’s a combination of data scientists ah engineers computer professionals as well as some biz dev and and and salespeople but it’s all about how you actually make use of data in a way that’s protected and expansive. And so it’s very much a global orientation footprint with more people as I said outside of the us than in the Us.
Alejandro Cremades: Gary so you’ve been doing this for quite a while Gary. So if I was to ask you? You know if you had a conversation with your younger self that younger partner at Hogan Loville’s and given that younger gary before going into the business world. Ah, a piece of advice for launching a business. What would that be and why given what you know now after all these companies that you’ve been you know leading.
Gary LaFever: Um, I’d actually remind that younger version of myself of what my parents. Both taught me you can accomplish anything you want if you’re willing to work at it long enough. So anonys has been around 10 years it’s going to be 1 of those 10 year overnight sensations right? successes. If you have the vision and the drive and the desire and you truly believe in something and you’re willing to be wrong I always say I learn more when I’m wrong than when I’m right because when I’m right I already knew it if you’re willing to surround yourself with capable people who challenge your every assumption. And you grow together as a team through iteration and challenging one another and looking for new opportunities and ways to do things anything is possible and I think that’s exactly what we’re showing with Anonos today.
Alejandro Cremades: You know I love it So gary. So for the people that are listening. What is the best way for them to reach out and say hi know.
Gary LaFever: Well probably Linkedin it’s gary le fever l a f e v e r or you could email me. It’s gary g r y dot la fever l a f e v e r at anonoss a N O N O S Dot Com love to hear from you.
Alejandro Cremades: Amazing well gary. It has been an honor to have you with us. Thank you so much for being on the deal maker show today.
Gary LaFever: Thank you all right? take care. Thank you for your time.
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