1. Israel Entrepreneurial Ecosystem Model - *VC
Yigal Erlich
Yozma
Israel Entrepreneurial Ecosystem Model - *VC

3. Government Involvement
Market Failure ( ):
- Early stage, high risk, innovative technological enterprises can not raise money from the private sector. only.
Government response:
- Chief scientist grants
Technological Incubators Program VC

4. Government role in investments vs. VC
Government Involvement
 Risk sharing
 Market failure conditions
 Government as a catalyst
 Predetermined exit conditions
 No government control
 Indirect investments (funds)
Professional VC funds
 Capable to raise funds
Choosing the right investments
Managing the investments
Building value for exit

5. The Role of VC in early stage companies
Board level
Assist/support management with strategic partners & customers
Assist/support in recruitment of senior management
Build/Approve Business Plan
Help raise additional capital (Equity/Debt)
Entice EXIT
Step-in at crises.

6. Yozma I Venture Capital (1993-98)
Mission: To create a venture capital market in Israel 1
Establish a $ 100M government investment company 2
Create a professionally managed Funds 3
Entice VC investments in Israeli early stage companies
Create and invest in new VC funds together with experienced partners (from abroad)
Make direct investments in startup companies together with professional investors

7. RESULTS 8 out of 10 funds returned bet. 2x to 14x the investment;
Government return ~135% ;
Direct investments portfolio return more than twice;
Unexpected strong result: The creation of a global network

9. Select Multinationals Presence in Israel
Actively Seeking Technology Innovation
All grow by accusations
US & EU, but also more and more SEA, Japan and now Chinese co’s
Source: IVC Research Center 9

13. THANK YOU

14. The Israeli VC Ecosystem - Exits
10-year total: $51b
M&As: $47b, 93% of Total
VC-Backed: $22b, 43% of Total

15. Leveraging Israel’s Defense R&D -Selected List-
Companies
Application
Technology
Commercial
Defense
Amdocs, M-systems, Saifun
Storage
Database management storage
Data storage and management
Libit, DSPC, DSPG
Communications
Signal processing
Digital signal processing
Alvarion, Gilat Satellite, Wisair, Altair, Butterfly, Wilocity, Siklu
Wireless communications
WiMax, RF
Check Point, Actimize, NICE, Verint, Comverse, Safend, Mintigo, Imperva
Inspection, Secured transactions
Security, Intelligence
Data and transaction analysis
Given Imaging, MediGuide
Tracking
Missile guidance systems
Optics
Navotek, IceCure, Sensible
Cryotherapy, Navigation, Diagnostic kits
Missiles and Radars
Missiles and Radar technology
Orbotech, Oplus
LCD-TVs
Intelligence
Visual processing
Source: IVC Research Center

16. Venture Capital Management Company
VC raises money from financial investors (& institutional investors)
Invest it and expect to realize capital gains.
VC provides equity based capital to fund technology companies.
VCs invest in one or all stages (seed to mez/lbo) and with or without
tech./market focus
VCs take an active role in building the company, do not want to control
Ready to take Risk
Seek to invest in Management more than in Technology
Expect high return on investment (IRR>20%)