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First-timers in Israel rely on local co-investors

Increasing numbers of foreign investors are taking their first look at Israeli companies, and several have already made their initial Israeli investments. Jessica Steinberg reports for the IVC on how some of these first-timers approach the Israeli investment scene.

US investors like the fact that they can invest in Israeli technology. They tend to appreciate Israeli ingenuity, techno-logical knowledge and the Sabra entrepreneurial spirit. But when push comes to shove, they won’t invest in Israeli companies without a local partner, and more often than not, concrete plans for setting up headquarters in the US.

“You need a local presence to provide over-sight and speak the language,” says Larry Bohn, a general partner at General Catalyst Partners in Cambridge, Massachusetts. “In our firm, it was absolutely a requirement to have an Israeli co-investor.”

Last summer, Bohn’s firm invested $6.5 million in OzVision Global Inc., a remote video services firm based out of Kibbutz Nahal Oz that already had some staff in the US and several OEM part-nerships. General Catalyst was introduced to the Israeli start-up by a friend of the firm, and they were impressed. Nevertheless, they had never invested outside of the US.

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The IVC Research Centre is Israel's leading research centre specialising in analysis and monitoring of Israel's high-tech and venture capital industries. IVC's publications are used by major financial entities and government organizations in Israel and abroad. A comprehensive quarterly report based on survey results is available to IVC clients. For more details about VCs & High-Tech industry in Israel, please visit our website www.ivc-online.com or contact Koby Simana Tel: 972-3-640-2306. koby@ivc-online.com