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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