Tag: israel venture capital

While American VC slowed in 2016, 4 reasons why Israel saw continued momentum

In early 2016, many pundits predicted a more tepid investment environment, characterized by a slowing venture capital market, a more rational valuation environment, and potential correction in the public markets.  There was a feeling that we were due for a bit of a “hangover” from the 2014-15 startup investing frenzy – which had been driven largely by walls of new capital from the likes of sovereign wealth funds, increased corporate venture money, and family offices. (For more on that, see our thoughts from early 2016 here.) And, indeed, the end-of-year data for 2016 has exposed what everyone pretty much knew: In 2016, venture capital funding in the US was down year-over-year, following five years of consistent growth in funding. According to data provided by Pitchbook, VC funding dropped roughly 14% – from the impressive $79.2 billion funneled into US-based startups in 2015, to a more modest sum of $68.3 billion in 2016. Perhaps even more telling is the decrease in the number of deals done in 2016 vs. 2015: 10,486 in 2015, compared to 7,966 in 2016. And exit activity...

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Venture capital in Israel: What is it, who’s winning, and the future of startup investing

For small companies to grow, they need access to capital (how much money they need is a whole OTHER subject). Cash-strapped startups have a tough time growing.  While the landscape is currently changing, startups traditionally turn to venture capital firms for funding. What is venture capital Venture capital is a very important source of funding for startups and small businesses that don’t have access to capital markets. As part of the Israeli startup ecosystem, venture capital is institutionalized in the sense that it is done by professional organizations focused on investing in startups. These firms, in turn, have to report to their own investors and work to provide a positive return for them. Before they make a single investment, venture capital firms (VCs) raise investment funds from accredited investors (US definition here) and from other asset managers. These funds have specific mandates — rules and frameworks that define the types of startup investments they make. These mandates can be sector-specific (eg biotech fund) or focused on maturity (eg. late stage startups) or follow general investment criteria (eg. strong team,...

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