The Sequoia Incubation Advantage: How Monad Used Institutional Backing for Customer Access

The Sequoia Incubation Advantage: How Monad Used Institutional Backing for Customer Access

Most founders follow a predictable path: raise a seed round, build an MVP, then start hunting for early customers. Christian Almenar, CEO and Founder of Monad, took a different route—one that fundamentally changed what the company could achieve in its first year.

In a recent episode of Category Visionaries, Christian explained how incubating Monad with Sequoia created advantages that traditional seed-stage companies rarely access. The model enabled design customer relationships from day one, provided pattern-matching validation for the market thesis, and solved the credibility problem that plagues most enterprise startups.

The Incubation Decision

After selling Intrinsic to VMware and spending about a year there, Christian started Monad during the pandemic. But instead of immediately raising a traditional seed round and scrambling for early customers, he took a different approach.

“We started really incubating this company with Sequoia,” Christian explains. “In the beginning, we saw the success of the warehousing movement, south lakes of the world.”

This wasn’t just about capital—it was about strategic positioning from the very start. The incubation model meant Monad had institutional backing before they had a product, before they had customers, even before they’d fully validated the specific solution they’d build.

For most founders, that sequence feels backwards. You’re supposed to build something, get customers, then raise money to scale. Christian inverted the order—and it created specific advantages that shaped everything that followed.

Advantage One: Design Customers from Day One

The most immediate benefit of the incubation model was customer access. When you’re backed by Sequoia from inception, you’re not cold-calling Fortune 500 security teams hoping someone will talk to you. You have warm introductions to decision-makers who take meetings seriously.

Christian has been explicit about working closely with customers to validate the product: “We’ve been doing enterprise sales even since the beginning because were working with design customers since day one and kind of working closely with customers to make sure we build something that is really valuable.”

This approach fundamentally changes product development. Instead of building in isolation based on assumptions about what customers need, Monad could build in partnership with the actual enterprises they planned to serve. The feedback loop wasn’t “build, launch, learn”—it was “learn, build together, validate continuously.”

Design partnerships at this level require credibility that most early-stage startups lack. A pandemic-era startup with no product would typically struggle to get serious engagement from Fortune 500 security teams. But a Sequoia-backed startup led by a founder who’d already sold a company to VMware? That opens doors.

Advantage Two: Market Timing Validation

The incubation model also provided something subtler but equally valuable: pattern-matching validation for market timing. Christian notes that Sequoia had seen “the success of the warehousing movement, south lakes of the world.”

This matters more than it might seem. When you’re pitching a market thesis as a solo founder raising a seed round, investors are betting on your judgment about timing and market readiness. When you’re incubating with a firm that’s backed successful data infrastructure companies, the thesis carries institutional weight.

Christian explains investor excitement by pointing to observable trends: “They see the signs that customers kind of like reaching a tipping point of needing to do things differently when it comes to handling all the data these tools generate.”

But “they see” implies Sequoia had the pattern recognition from adjacent markets. They’d seen how data warehousing transformed analytics. They understood the architectural shifts that create infrastructure opportunities. They could recognize the same patterns emerging in cybersecurity.

For Christian, this meant he wasn’t just betting on his own thesis—he was validating it against proven patterns from similar market transitions. The incubation model gave him access to that institutional knowledge base from day one.

Advantage Three: Solving the Enterprise Credibility Problem

Perhaps the most significant advantage was solving what plagues most early-stage enterprise companies: the credibility gap. Enterprise buyers, especially in security, are notoriously risk-averse. They don’t buy from companies that might not exist in a year.

Christian’s approach with Monad specifically targets Fortune 500 customers: “In the beginning, our customers are in the Fortune 500 kind of greater larger companies.” These aren’t early-adopter SMBs willing to take risks on unproven vendors. These are enterprises with rigorous vendor evaluation processes.

How does a pandemic-era startup with no product win these deals? Institutional backing provides a credibility layer that traditional seed funding can’t match. When you tell a Fortune 500 CISO that you’re incubated by Sequoia, you’re not just saying “we have funding.” You’re saying “a top-tier firm has done deep diligence on this market opportunity and is betting on it institutionally.”

This credibility extends beyond just closing deals—it affects the entire sales process. Christian could have substantive conversations about product roadmap and long-term vision because enterprise customers took the company seriously as a potential long-term partner, not just an interesting experiment.

Advantage Four: Freedom to Build for the Future

The incubation model also created space to make product decisions optimized for long-term strategy rather than short-term revenue pressure. Christian describes a deliberate design philosophy: “We want the product to look the way we’re designing it, even like how it looks. It looks more like a segment or a stripe and less than a typical security product.”

This decision—designing for eventual self-service while selling to enterprises—requires patience and conviction. Most seed-stage companies face pressure to optimize every product decision for closing the next deal. They can’t afford to build features that won’t drive immediate revenue.

But Monad could make different tradeoffs. “We want to make it available to really any security engineer who wants to get more value out of the current tools they use,” Christian says, describing the long-term vision even while acknowledging the short-term focus on large enterprises.

The company is now “experimenting with smaller communities but starting to get more bottoms up adoption” in the second half of the year. That experimentation is only viable because the product was designed for it from the beginning—a luxury that companies desperate for early revenue often can’t afford.

Advantage Five: Sustainable Business Model from Start

Christian is explicit about the business fundamentals: “We’re a business, a for profit business. In order to make a sustainable business, you need to have large contracts and work. Usually those are the best companies to work with.”

The incubation model allowed Monad to focus on sustainable unit economics from day one rather than chasing vanity metrics or user counts. They could target the deals that would actually build a viable business rather than optimizing for whatever metric makes the next fundraise easier.

This focus on fundamentals connects to Christian’s broader vision for the company. “We set ourselves to build like a long standing company. Of course we want a company with the public and be very profitable,” he says. The incubation approach aligned early-stage decisions with long-term company building rather than optimizing for the next funding milestone.

The Tradeoffs

The incubation model isn’t without costs. Most obviously, Christian gave up equity earlier than founders who bootstrap or raise smaller seed rounds. There’s also potentially less flexibility—when you’re incubated by a major firm, you’re more tightly coupled to their strategic views and portfolio construction.

But for the specific opportunity Christian saw—uplifting cybersecurity to match other industries in data sophistication—the incubation tradeoffs made sense. This wasn’t a problem that could be solved by a scrappy three-person team building nights and weekends. It required enterprise credibility, design customer partnerships, and sustained conviction in an infrastructure thesis.

The Underlying Principle

The lesson for other founders isn’t “go get incubated by Sequoia.” That’s not a generalizable tactic. The deeper principle is about matching your funding and GTM strategy to the specific problem you’re solving.

Christian identified an infrastructure opportunity in a conservative, enterprise-dominated market. The solution required Fortune 500 customer partnerships from day one to build something valuable. The incubation model made that possible in ways traditional seed funding wouldn’t have.

For founders evaluating similar paths, the question isn’t whether incubation is “better” than other models. It’s whether your specific market opportunity benefits from institutional credibility, design customer access, and pattern-matching validation more than it needs the flexibility and ownership of a traditional raise.

Christian’s bet was that for Monad, the advantages outweighed the costs. The company has raised $19 million and is working with Fortune 500 customers to fundamentally upgrade how cybersecurity teams handle data. That suggests the bet is paying off.