Sixpoint Ventures co-founder Trace Cohen joins Yoel Israel to discuss why Israeli founders are crossing to the US earlier, how venture capital has changed, and how American investors can find a way into Israeli tech.
For years, Israeli startups followed a familiar path. Founders proved product-market fit at home, raised a Series A, and then moved sales, business development, and the executive team to the US while engineering stayed in Israel. A WeWork desk in New York was usually enough.
Trace Cohen sees that timeline compressing. Founders now want American capital and American customers at pre-seed and seed. In his conversation with Yoel, Trace explained what is driving the shift, what American investors often misread about Israeli founders, and why access to the best Israeli deals depends on being on the ground.
Why Founders Are Moving Earlier
Israel is a small market for most enterprise products. Trace said companies in AI, defense tech, and cybersecurity increasingly go international from day one. “If you’re a consumer, you can kind of be anywhere, but if you’re enterprise in fintech, in defense tech, you have to be here on the ground as soon as possible to get those contracts and those deals,” he said.
Capital is the other driver. Pointing to the country’s exits, Trace said Israel is basically second only to the US, and investors are opening offices there. A dozen or more early-stage funds now back Israeli companies before they have a product or revenue, which closes a gap that used to keep founders at home longer. Once funded, those founders come to the US sooner to sell, hire, and meet VCs.
New York already hosts hundreds of Israeli startups, according to mapping by Guy Kaplan, and a dedicated hub for the community is now opening there. Trace said people have pitched the idea for years. The difference now is density, along with a stronger sense of shared pride among Israeli founders and investors in the city.
From Brand Yourself to Sixpoint Ventures
Trace grew up around founders. His parents ran a tech PR agency and encouraged him to build a company instead of taking a traditional career path. At Syracuse, he majored in entrepreneurship and co-founded Brand Yourself, an online reputation management company, with his roommate. It raised a few million dollars while they were still in college and was later acquired by a fintech unicorn.
He went on to invest alongside his father, who chaired the New York Angels. Between them, they made 75 direct angel investments. Trace later earned an MBA from Columbia and worked on internal B2B products at American Express.
After October 7, Trace and his father tried to launch a nonprofit venture fund for Israeli startups, funded through donor-advised funds. Goldman Sachs and others they approached liked the idea but declined to take it on. Trace instead partnered with Zach Firestone to start Sixpoint Ventures, a for-profit fund named for the Magen David, and set out to raise $36 million for early-stage companies in the US and Israel. The work took him to Israel six times last year.
Asked whether he would recommend an entrepreneurship degree today, Trace said no. He sees it as mostly performative now that AI tools let people build almost anything themselves. He still encourages young people to go to college for the social environment, academic rigor, and a fallback, noting that dropout success stories represent roughly one in 100.
Why Israeli Cyber Is So Hard to Access
After Wiz’s $32 billion acquisition, Trace heard from many investors who wanted to start backing cybersecurity startups in Israel. He sees the sector as an excellent place to invest, but only for those already networked into it. Founders coming out of Unit 81, the Shin Bet, Mafat, or cyber roles at major companies can raise $20 million to $100 million at the idea stage. Trace compared them to people leaving Anthropic or OpenAI, who attract enormous checks because of their experience and connections.
For American readers, Trace explained that investors look closely at where a founder served. Unit 8200 is very large, so the specific team and role matter. He compared Mafat to DARPA. Investors also ask whether a founder ran cyber, autonomy, or robotics work, and what rank and responsibilities they held. Many people from the Air Force work in enterprise software, since the role involves massive coordination, big data, and security in real time.
For American LPs with money but no Israeli network, Trace recommends investing through emerging managers who already have access. He advises against trying to do it alone through an SPV. He gives new angel investors the same advice: “If you’ve never done it, expect to lose your money, but please consider it to be like an MBA.”
How Israeli and American Founders Differ
Trace said American founders work hard, often blurring the line between work and life. Israelis carry a different kind of urgency. “They work to survive,” he said.
That difference shows up most clearly in defense tech. In the US, working with the government or the military was widely avoided until around 2018 and 2019, when companies such as Palantir and Anduril changed perceptions. In Israel, the work is part of everyday life, and the country serves as a testing ground where technology is used, improved, and iterated on.
Trace believes Israelis have become much easier for Americans to work with in recent years. He described the earlier friction as mostly a language and cultural barrier. Their pitches still tend to be direct: here is the product, here is why it matters, and when are you writing a check. He enjoys that format because it saves time.
Where founders often need help is communication. With a background in PR, Trace has helped Israeli teams rewrite press releases that led with the founders’ military units and credentials. Readers want to know how much the company raised, what it does, and who benefits.
He also pointed to an advantage he considers underrated. Teams that served together in the IDF often leave together, sometimes five to eight people at once, already knowing how to work as a unit. That kind of founding team is rare in the US.
A More Competitive Venture Market
Trace described a bifurcated market. In 2020 and 2021, almost anything could get funded. Today, the largest funds have raised more than 80% of deployable venture capital, and closer to 90% this year by his reading of the data. “Capital is a commodity,” he said. “The founders have a lot more leverage these days.”
Growth expectations have risen with that leverage. Before 2020, a company growing 30% to 100% a year was considered exceptional. Trace now has portfolio companies growing two to three times year over year that still face questions about whether that is enough. “Expectations have gotten a little crazy,” he said.
Large funds are less sensitive to entry price because they can keep investing in a winner later. Smaller early-stage funds are price sensitive and often cannot follow on enough to maintain their ownership. Round timing has become strategic too. Trace explained that announcing a raise can support future fundraising, press coverage, customer confidence, and hiring.
Getting into strong deals takes persistence. For one Sixpoint investment, the founder turned down an introduction, ignored an email, and declined on LinkedIn. A fourth approach through a mutual friend finally led to a call, and Trace’s partner later flew to Israel to close the deal over dinner. “No one shares their best deal flow,” Trace said.
Where Israel and the US Are Heading
Trace expects deep tech and what Andreessen Horowitz calls American dynamism to define the next stage of investment. That includes rebuilding supply chains, the chips, power, and cooling behind data centers, and defense systems such as drones and cyber.
Israel and the US are closely aligned on AI and defense tech. The US remains stronger in consumer products and humanoid robotics. Israel stands out in marketing technology and in agriculture and water, with research from institutions such as Ben-Gurion University.
Trace’s advice for first-time founders is simple: build a product, get traction, generate revenue, and enjoy the process. He does not recommend starting a company for most people. “It is the best, worst, most amazing, horrible experience you can have,” he said. For the founders who do it, the path to the US now starts much earlier than it used to.
