Cyber Founders: Beware The “Poison Pill” Of High Valuations - #0081, Ofer Wolf

Everyone is talking about the $90 billion M&A wave that hit the sector in 2025: Google’s $32 billion purchase of Wiz, Palo Alto Networks’ $25 billion buy of CyberArk. People love to talk about those, but almost nobody talks about how few companies can actually write those checks. Except Ofer Wolf.As Akamai’s SVP and General Manager of Enterprise Security, Wolf sits on the buy side today. But he got there as COO of Guardicore, the Israeli startup Akamai bought in 2021 for roughly $600 million. It makes his reading on the market less theoretical and more one from actual memory. “I can see the picture from the three sides: the entrepreneur side, the investment side, and the potential acquirer side,” he told me. What he sees from all three is a market punishing founders who raise at prices the buyer pool can’t support. “There are [fewer] than five companies that can do constant acquisition of over a billion,” he said, calling the Wiz-type deals an exception, not the rule. “Most of the acquisitions in cybersecurity, which is a fragmented market, are limited to hundreds of millions of dollars, usually.”That’s what he called “the poison pill”: raise too high, and you haven’t built a war chest, you’ve actually shrunk your buyer list to almost nobody. “Your valuation decision has set the future of the company to be a different future,” Wolf told me. “[It’s] probably the most strategic decision that is overlooked.” His advice isn’t to dream smaller, or only aim for the IPO - rather, it’s to prepare a few plans and act accordingly. “You need to have in the back of your mind another plan B, plan C… because eventually, most of the cybersecurity companies, the successful ones, were acquired by somebody.”Akamai’s own Tel Aviv record reads like that discipline in practice. It completed four Israeli cybersecurity acquisitions in five years, most recently the roughly $205 million purchase of browser-security startup LayerX (expected to close later this year), comfortably inside Wolf’s “hundreds of millions” band and nowhere near the CyberArk or Wiz price tags. Wolf describes the Israeli geography of the company’s acquisitions as serendipitous: “Two miles around our office, you’ll find a major part of the cybersecurity industry, from Palo Alto, Check Point, CrowdStrike, to small startups.” When Akamai went shopping for a workforce-security target, it checked six or seven companies across Israel, the US, and Europe, only to find the winner “sitting in the building right down the street, five minutes from our office.”Akamai's ability to stay active on the acquisition front is helped by its strength elsewhere in the business. The company's stock recently surged after disclosing a $1.8 billion cloud deal with what it called a leading frontier-model provider, widely reported to be Anthropic. That gives Akamai the luxury of approaching acquisitions from a position of strength rather than necessity.The same recalibration Wolf sees in acquisition markets is also showing up in Israel’s labor market. Wolf calls it “two headwinds”: AI-driven layoffs squeezing junior hires, and a shekel that’s strengthened over 20% in a year, making Israeli engineers pricier than they were twelve months ago.The Israel Innovation Authority’s 2026 report backs him up, and something I previously wrote about in JNS: for the first time in a decade, Israeli high-tech R&D headcount actually fell by roughly 3,500 jobs. “The reduction in force is hitting the news,” Wolf said, “but the slow drift won’t make the news.”He’s surprisingly upbeat about where this lands. In his mind, laid-off engineers will become founders of future great companies. And new hires get “a little bit more sensible” about pay. His own team is leaning into “AI-native junior guys” at the same dollar budget that bought fewer senior people a year ago.So currently, valuations and salaries are both drifting back toward what the buyers are willing to pay. And for Akamai, that is an easy pill to swallow.Watch us discuss this idea in a 5-minute preview: The "Poison Pill" That Kills Cybersecurity Startups Get full access to The Spiro Circle at www.thespirocircle.com/subscribe