International Corporate Finance

INTERNATIONAL CORPORATE FINANCE 50 LEADERS

Leaders League. How has the funding sce-

nario changed in Israel in the recent past?

Jonathan Medved. Between 2013 and 2015,

the amount of dollars invested in venture ca-

pital in Israel grew by more than 100%, from

$2.2 billion to $4.5 billion. For an ecosys-

tem like Israel’s to grow at that pace is re-

markable, and in the recent past funding has

gone through the roof. According to mar-

ket analyses, global market investments are

going to be down 10-20% while Israel’s are

expected to grow by 10% this year. Invest-

ments by the end of this year should hit over

$5 billion. About 1000 startups will be fun-

ded in 2016. Investors from Asian countries

like China, Japan, Korea and India have just

discovered Israel and fallen in love with it.

Additionally, Israel is slowly starting to move

away from being a venture capital paradise,

towards being a country awash with private

equity, owing to larger deal size. These pri-

vate equity companies are writing cheques

worth hundreds of millions of dollars. Ano-

ther major factor propelling us forward at

such a fast pace is the presence of multina-

tional companies which are present in the

investment and acquisition space. Just last

year over 100 Israeli companies were bought

by bigger multinationals. That’s an average of

two deals per week. To sum it up, right now

there is a vibrant international investment

scene, coupled with great liquidity thanks

to multinational companies on a spending

spree with an appetite for Israeli startups, on

a scale that’s never been seen before.

Leaders League. Is it easier to get funding

now than it was five years ago?

J. M. Absolutely! It is much easier for an Is-

raeli entrepreneur to get funding now. But

what is interesting is that it’s not like there is

too much money chasing too few deals. There

are more dollars coming in and there are

more and more entrepreneurs stepping up to

do the work. There is a Nobel Prize winning

Professor of Economics from Israel called

Daniel Kahneman who says that to be an en-

trepreneur is ultimately a little “delusional”

because the odds against you succeeding are

pretty high on an empirical basis. Except that

no entrepreneur believes that, thinking that

those are somebody else’s odds and not his

own. But when such groups of “delusional”

people come together, they have the potential

to change the odds. Another point of interest

is the rise of the “Serial Entrepreneur” phe-

nomenon. These are people who do this over

and over again: build companies, get funding,

sell them and start again. There are literally

thousands of them working in Israel, and this

makes our job as investors so much easier.

This means there is more and more money

pouring into new Israeli startups.

Leaders League. What are your predictions

for the future scope of equity crowdfunding

in the entrepreneurial space, globally spea-

king?

J. M. I don’t see it going anywhere but up.

There are companies on the planet being for-

med right now that will be the size of a Goo-

gle or an Apple in 10 or 20 years, and we

don’t know who they will be. There are

pieces of this puzzle coming together, and

this creates all the more need to harbor this

entrepreneurial spirit by providing the ne-

cessary broadband infrastructure and oppor-

tunities. You can now rent a piece of the

cloud and download so much free, open-

source software, which was so much harder

to do back in the day if you were starting a

new business. This, coupled with the ease of

access to social networks for communica-

tion, interconnectivity through the Internet

of Things, applications of Big Data like Pre-

dictive Analysis and Deep Learning, forms

the basis of all the interesting developments

that new-age startups are going to bring

along. I am very optimistic about this, espe-

cially owing to Israel’s already well-deve-

loped cyber security tools and suite of tech-

nologies that has put us in the perfect

position to move forward faster than ever.

My bullish outlook on the market gives me

enough reasons to believe that the fourth

state of the innovation finance tool i.e. equity

crowdfunding will have a large role to play

in what’s coming next.

Jonathan Medved is one of Israel’s most prominent serial entrepreneurs/tech venture

capitalists, having invested in more than 200 Israeli startup companies. In 2012 he founded

OurCrowd, an equity-crowdfunding platform for accredited investors and angels focused

on investing in Israeli and global startups.

THERE ARE LITERALLY

THOUSANDS OF ‘SERIAL

ENTREPRENEURS’

WORKING IN ISRAEL AND

THIS MAKES OUR JOB

AS INVESTORS SO MUCH

EASIER

“There is more and more money pouring

into new Israeli startups”

JONATHAN MEDVED

Founder and CEO, OURCROWD

$5 billion

Total expected investments amongst

Israeli startups in 2016*

100

Number of Israeli startups acquired

by big multinationals in 2015*

20

Number of Jonathan Medved’s career

investments valued at over $100m

*Source: OurCrowd