It’s not my place to preach. As bubbles go, the last couple of years has been my favourite bubble so far. A lot of people have done very well and unlike the bubble or sub-prime mortgages – didn't we all know that a market correction was in the cards? I anticipate I have 3 bubble cycles left in my working life – so in the spirit of Yom Kippur and self-introspection, I would like to share what I have learned this year.

Projections are a guess – not the living words of God

During the bubble we counted clicks – over the last few years, we counted multiples of ARR (annual recurring revenue). The metrics are different. The approach is the same. When enough influential people buy into a valuation methodology, it spreads. A projection of ARR is, like any projection, speculative and uncertain. However, when you multiply that uncertainty by - 10x, 20x, or 30x, the disconnect with ROI (the return on investment) grows out of proportion. When cheap money dries up, investors that previously looked for growth at any costs are now advocating frugality. If your project is big eventually you will be held accountable (unless you're lucky enough to sell in time—see next).

Good is good enough

This has become one of my mantras. I have come across sellers who have taken an offer for their business even though it was not the best they could have received – and others – who held out assuming they could get more. When big numbers are floating around it is human nature to compare yourself to industry peers and expect the same. Unfortunately, market timing is beyond the control of any one company or investor. What was once only a “good” or “ok” offer, can become a poor offer, or no offer, in a matter of weeks or days. If you can make 2x and you’re holding out for 10x, is that because your life will be 5 times better? How would you feel about 0.2x?

Staying in the game– more is sometimes less

‘You need to hire more quickly! Grow your sales team! Spend more on marketing!’ These are all bubble signs. The focus is placed on growth for the sake of growth because the valuations incentivize that. Undoubtedly, there are those companies and investors who have done well by timing this right. There are other cases where supercharged growth has worked. But in the long run, it is sometimes the more cautious companies that remain standing. There is a lot of value to just staying in the game. Building a business is a marathon – even though sometimes it seems more like an all-out sprint.


"A thankful heart is not only the greatest virtue but the parent of all other virtues" (Cicero). Of all the lessons I have learned over the last couple of years, gratitude is the most important one. When things are going well, hubris can sometimes creep in. If you're a founder, appreciate investors at all stages of your company's lifecycle. It's the right thing to do and you never know when you might need to go back to the people who trusted in you at the beginning. Investors– appreciate those founders who made huge personal sacrifices to try and create value for all – even if ultimately things haven’t gone as expected. To those in the business like myself– appreciate the clients who continue to send you work when they could send it to other equally qualified (though less handsome) lawyers.

Written by Adv. James Raanan, Partner at Amit, Pollak, Matalon & Co.

Credit: Eyal Toueg