Israeli VC on Sand Hill road

You deserve the real answer!

As I meet with entrepreneurs in my newly defined “ex-VC” role, I find myself very often translating VC talk.  It reminds me of a post Guy Kawasaki published over 2 years ago (“The top ten lies of Venture Capitalists”).  Definitely still worth a read.

Many entrepreneurs meet with VC’s that are “very interested” in the company and report that a “meeting went very well”.  I have a very specific question that I ask in response: “What is the next step?”.  (Actually this is the same question that one would ask in the context of a customer meeting as well.)  Not always is there a concrete answer.

It is absolutely OK to ask a venture capitalist at the end of a meeting what is the next step.  In fact, it is necessary.  You will be able to understand very much from this response, most importantly what was the real level of interest. 

As often said, a quick “no” is the second best answer to “yes”. And… if the answer is “no”, take the time to discuss and question why.  Not for the purpose of changing a mind, but for understanding the real reason.  This feedback will be extremely helpful in addressing these concerns for the next meeting, as well as dealing with real issues.  Good Luck!

Tags: guy+kawasaki, the+top+ten+lies+of+venture+capitalists, feedback+from+venture+capitalists

Cleantech, meetups and hi-tech refugees

What do you get when you put together a “meetup” inviting entrepreneurs, investors, academic researchers and government officials to meet and exchange ideas about Israel's growing renewable energy, water, and environmental sectors?

This “meetup”, organized by Gene Dolgin and Jonathan Shapira of Israel Cleantech Ventures, attracted more than 50 people who came to shmooze, drink cappucino and hear presentations by Jack Levy, General Partner at Israel Cleantech Ventures and Eran Yarkoni, CEO and Founder of EnStorage.  Eran discussed a startup's perspective on licensing clean-tech technology from Universities… which was not very encouraging (he mentioned 12 months to complete the process ).

Very obvious was the number of “hi-tech refugees” in attendance; those  tired of the “regular stuff”, and anxious to learn about and get involved in this sector.  Yes, there is definitely a trend here.

Tags: israel+cleantech+ventures, cleantech+meetup+israel, jack+levy, eran+yarkoni, Enstorage

Israel's engineers of the future

I first heard about FIRST (For Inspiration and Recognition of Science and Technology) when living in Silicon Valley. This year, I realized that Emek Hefer (where I live), has their very own FIRST Robotics team.  For the past 6 weeks, a group of ~10 kids aged 14 and above, adult mentors, and many other support staff, worked nonstop to prepare for the Israeli FIRST competition.  After quite an intense and suspenseful 2 days, our local team secured it’s place in the Atlanta finals!!!

For those unfamiliar with the program, definitely check out the site.  But in a nutshell, within 6 weeks of receiving the challenge, these teenagers designed and built a robot, while going to school, and continuing their lives.  Sure, they spent a few nights sleeping in school, ate too much junk food, and were powered by adrenaline, but in the end delivered the goods. (Say, doesn’t that sound a bit similar to life in a hi-tech company???).

You can view the first place Misgav Robot showing off below:

However, let me describe a few of the differences between the Emek Hefer robotics team, and their counterpart at Gunn High School in Palo Alto.  Gunn raises about $90,000 a year for the competition… I can tell you that we’re not even close.  The Gunn team is about 3 times the size of our Emek Hefer team. But perhaps most importantly, in Palo Alto, the kids have all they need within the compounds of the school.  From the photo of the Robot, you can see that it requires a full metal shop.  Our school doesn’t exactly have one of those, so the kids (with the help of their mentors and parents) solicit support from locals.  In our region, 2 guys from a nearby Moshav opened their metal shop, dedicating their time, material and machines to help the kids along.  It’s no surprise that Israeli engineers are known for their resourcefulness and problem solving abilities… they’ve been trained this way since they were young.  

From the Palo Alto online article, “Many industry leaders expect that some of these teenagers will become Silicon Valley's future multi-millionaires, following in the footsteps of Apple Computer's Steve Jobs, Google's co-founders Larry Paige and Sergey Brin, and now YouTube's hot shots Chad Hurley and Steve Chen.”

Guess what we’re expecting of the Israeli teenagers .

Go Thunderbolts 2630!!  Good Luck in Atlanta!!!

 

Tags: first+robotics, emek+hefer, israel+first, first+robotics+in+israel

Academic research and start-ups?

Today, I was invited to participate in a panel discussion at Ben Gurion University, moderated by Nimrod Goor of Precede, that addressed turning scientific research into start-ups.  Participants included Orni Petrushka (Precede), Neta Cohen (BGN technology transfer office),  Prof. Dan Sadot (BGU), Dr. Itai Baruchi (Pythagorus Solar) and myself (“ex-VC”).

Turning research into commerce is not obvious.  A University’s technology transfer office is typically responsible for commercialization of IP, with an objective of returning income to the inventor and to the University to support further research.  Every venture capitalist that dealt with technology transfer offices has something to say about the matter (not always very nice BTW).  However, getting a licensing agreement from the University is only the first baby step in the direction of building a company.

Much of today’s discussion surrounded the fact that an invention (with or without patents), is just not enough to create a start-up.  Ideas have to become products, which will be purchased by customers.  The development of the business plan is not typically included in the curriculum of an engineering student.  During my under graduate Math/CS studies at Tel Aviv University, we had no exposure whatsoever to the concept of commercialization. In fact, I don’t recall a single opportunity to speak with anybody from industry.  Glad to see that things change.

 

Tags: precede, nimrod+goor, orni+petrushka, bg+never, prof.+dan+sadot, itai+baruchi, pythagorus+solar, technology+transfer, academic+research+and+startups

Purim in Israel

Ask most kids what’s their favorite holiday, they’ll probably say Purim (BTW – often compared to Halloween in the US, simply because of costume-wearing). Ask most parents what concerns them during Purim, and up until a few years ago, you’d probably hear “we hope it doesn’t rain and spoil the kids parade”.

Well… I’ve been trying to think back when was the last time it rained on Purim.  I couldn’t remember.  In fact, this years holiday was quite the contrary, as temperatures hit 90 degrees.

Did I hear anybody say Global Warming??

Tags: global+warming, purim+in+israel, rain+on+purim

Entrepreneurship is cool

How’s that for a comment from a 5^th grader? 

These days, I have some spare time on my hands and figured to ask my son’s teacher if they’d like a guest speaker one of these days…. that day was Sunday.  My son Yoav wasn’t exactly thrilled with the idea that I was coming to his class, given the high likelihood of him being terribly embarrassed, however he reluctantly agreed.

The subject which I was going to discuss was called Entrepreneurship, or as the presentation was titled: “A Star is Born” . (Note: A star is born is the English translation for Kochav Nolad, or as it’s known in the US – American Idol).

My objective was for them to understand that great companies start with ideas, often founded by groups of friends, which are not only smart, but determined and not afraid to fail. We discussed Google, Apple, ICQ, and Microsoft (needed some examples that they can relate to).  So for about 40 minutes, I had the attention of ~30 5^th graders.  They were very attentive, asking lots of questions and only occasionally interrupting (after all, it’s a class of Israeli 5^th graders…).

Try and explain venture capital to 5^th graders - it’s not easy.  I’m not sure that I got all my messages across, but the comment that made me most happy was from Yoav in the evening: “Mommy, that entrepreneurship-stuff is pretty cool”.

Tags: venture+capital+for+kids, yoav+alush+aben, entrepreneurship, entrepreneuship+for+kids

Dollars and Israeli start-ups

Who would’ve imagined that in March 2008, the Dollar/Shekel exchange rate would be less than 3.5!  For most Israeli’s, the dollar was always considered a very conservative and safe investment.  Not anymore!  In the past year, the dollar has lost ~20% of its value.  Of course, there are always those who win and those who loose from these types of fluctuations.  But for Israeli start-ups, this is not good.

Our companies have always prepared their budgets in US dollar. When the dollar weakens, it means that more cash will be used to make payroll, effectively reducing the time that a company has to operate.  This means that it will require more capital to reach the same milestones as before, or in other words, makes it more expensive to operate.

I’ve been asked by blog readers if the dollars’ nose dive impacts company valuations.  Indirectly it does, as companies need to raise more money than before.  In some cases, this will mean higher dilution for founders, in others, more capital invested by the venture capitalists to buy the same ownership. 

Another question relates to how these start-ups should manage their money.  Should they convert their dollars to shekels?  A few years ago, this would’ve been unheard of.  These days, not sure it’s such a bad practice.  By investing your capital according to your exposure (meaning if 20% of your expenses are in the US, and 80% in Israel, perhaps keep 20% of your funds in US dollars) you at least guarantee that you can meet your expense plans.  But if the dollar regains its strength, you will not benefit from that if you choose this approach.

There are so many things that start-ups have to deal with. Now another issue joins the list of things to worry about.

Tags: dollar+shekel, manage+your+investment, dollar+impact+on+israeli+startups, startups+and+weak+dollar

Purim in Israel - 2008

Purim is one of the kids favorite holidays here in Israel.  Parties, costumes and treats all contribute to what is a very festive holiday.  It is customary to exchange “purim baskets” called “misholach manot”.

Tomorrow, my younger boys are taking their mishloach manot to school, where they will be sent to the soldiers.  My 10 year old son wrote the following note that I wanted to share:

Dear Soldier,

I want to wish you a Happy Purim. 

Please take care of yourself, and thank you for taking care of us.

Yoav

 

Tags: purim+in+israel, purim, yoav+alush+aben, mishloach+manot, purim+basket

Mirror mirror on the wall

Some people know how to read others just by staring in their eyes.  I’m not one of those.  However, I can figure out the culture of a company by the way you interact with assistants and the front desk.

These days, I meet with many people as I try to figure out “what next”.  Some approach me, some I approach directly, and some direct me to their assistants.  There is at least 1 person with whom I have no further desire to meet after having had 2 calls with their assistant. Life is just too short.

So just something to think about…

Tags: front+desk, administration, front+desk+mirror+to+an+organization

Green technologies have side effects...

I was recently talking with an ex-VC colleague of mine that has started to explore investment opportunities in Cleantech/Greentech (would somebody please explain the difference to me???).  Turns out, since Cleantech has invaded his life, he has developed an acute sense of “environmentalitis”. I can certainly relate.

Since I have moved back to Israel from Silicon Valley, I feel like a criminal every time I throw out the garbage… around here, hardly anything seems to be recycled.  In our family, we do what we can.  As such we take egg cartons, toilet paper rolls, etc., to Ben’s pre-school.  At least it will become “art”, rather than landfill.  Ben understands about recycling (or so we think).

In Yoav’s class (5^th grade), his teacher is actually dedicating time to discuss the environment.  He came home today telling me about a plant in Emek Hefer (where we live) which turns cow dung into electricity (600 tons of cow dung per day, resulting in 2–3MW of electricity).  He thought maybe I would want to work there, as long as I don’t smell when I come home.

Teaching kids is a great way to create awareness, as they share the news with their parents, as well as become environmentally-conscious adults.  But until they grow up, we have to find some more effective ways to deal with this issue.  On Kibbutz Evron in Israel, they are using a very practical approach to plastics bags – charging for them… you can read about that here. I’m in favor… after all, I have my “Whole Foods” foldable, reusable bag with me at all times . 

Tags: cow+dung+electricity, cleantech, environmentalitis, greentech, recycle, kibbutz+evron, whole+foods