Good Morning, Tel Aviv…

The other morning I woke up in Tel Aviv. I am in Israel as a member of Governor Deval Patrick of Massachusetts’ Innovation Economy Partnership” mission. Ahead of us we had 4+ days full of meetings with local entrepreneurs, investors and various government officials. I was there to represent the Massachusetts VC community and to make clear that the State was very much open for business – as well as hopefully find my next new investment.

To immediately set the tone, though, was a visit to the Yitzhak Rabin Center in the suburbs of Tel Aviv where I also met the former Prime Minister’s son. The Center was an extraordinary retrospective of this courageous man, and in so telling his story, one also more fully appreciated the tortured history of the country. Israeli entrepreneurs – I often heard that day – innovate out of necessity given the scarcity of resources within their borders and the hostilities all around them.

After this very powerful visit, we met with the Chief Scientist of the Ministry of Industry, Trade and Labor (Avi Hasson). Last year the Chief Scientist extended $400 million in grants to 1,200 projects (out of the 2,000 proposals received). Israel has a leveraged government investment model; Hasson estimated that the government has returned 5 – 10x its initial investment given the requirement for private industry to “co-invest” alongside his grants. Approximately 85% of these grants go to what he described as “small business.” The significant allocations by industry were biotech (28%), communications (25%), software (14%) and electronics (11%) – cleantech was allocated across all the categories. While not managing to a specific allocation model, Hasson stressed that Israel was focused on a broad range of core innovation industries. He very clearly spelled out some of his more important focus areas – not surprisingly physical security and water technologies ranked high on that list.

Later that afternoon I visited Cisco Israel and meet with a number of interesting entrepreneurs. What struck me most in these discussions were the global aspirations each CEO held – and the recognition that sooner or later they would need to relocate their companies, most likely to the US. There did not appear to be disappointment in this, simply resignation. While at Cisco, Governor Patrick conducted a three-way video conference call with Boston and San Jose to announce a renewed commitment of $1 million to MassChallenge for a second round (the first round of MassChallenge has been very successful, having sponsored companies which have raised $30 million of capital and created 300 new jobs).

An amazing dinner with many of these entrepreneurs closed out a fascinating first day of the trip.

Leave a comment

Filed under Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s