Investment Entities

 

Angel Investor

An individual who provides capital to one or more startup companies.

 

Corporate Venture Capital (CVC)

A subsidiary of a large corporation, which makes venture capital investments.

 

Private Equity Fund

A fund which invests primarily in stocks, usually common stocks.

 

Fund of Funds

A fund which invests in other funds.

 

Hedge Fund

A fund, usually used by wealthy individuals and institutions which is allowed to use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage, and derivatives. Since they are restricted by law to less than 100 investors, the minimum investment is typically $1 million. The general partner usually receives performance-based compensation. Hedge funds are not common in Israel.

 

Holding Company

A company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. Also called a parent company.

 

Incubator

A company or facility designed to foster entrepreneurship and help startup companies, usually technology-related, to grow through the use of shared resources and intellectual capital.

 

Investment Company

A firm that invests the pooled funds of retail investors for a fee. There are two types: open-end (mutual funds) and closed-end (investment trusts).

 

Management Company

The firm that organizes, manages, and administers funds.

 

Mutual Fund

An open-ended fund operated by an investment company, which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the fund's net asset value, which is determined at the end of each trading session.

 

Secondary Fund

A fund which purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market.

 

Turnaround Fund

A private equity fund, which invests in troubled companies to cause a sharp, positive reversal in their performance.

 

Venture Capital (VC) Fund

Funds made available for startup firms and small businesses with exceptional growth potential. Managerial and technical expertise are often also provided. Also called risk capital.

*******

Glossary of Accelerator Types

An accelerator is a program that runs for a fixed amount of time with the goal of assisting the participating companies to grow. These programs almost always provide mentorship, classes, a demo day or pitch night and a space to work from. They almost never charge a participation fee though some programs make take equity in exchange for participating or an investment. The various types of accelerators are listed below

 

Corporate Programs

These accelerators are run by corporations as a separate activity from the corporation’s investment arm. The Programs focus on developing products that are enhance the corporations products. With the exception of a few programs like Barclays TechStar TLV, these programs are generally non-equity programs and without cash investments though the participants usually receive access to the corporations facilities, guidance from the various departments and sometimes access to corporations verticals and customer base in order to carry our beta testing. They are sometimes part of a global network of accelerators such as Microsoft ScaleUp or Israel specific like IBM AlphaZone or Intel Ingenuity Partner Program.

 

Academy programs

These programs are usually open to current students, alumni and faculty of the university. These programs generally do not take equity or give investments. They  do offer mentorship and guidance on how to grow the startup via the institution’s faculty, partners and alumni,  access to the university facilities and access to service providers such as law firms and accounting firms as well corporations who are sponsors and partners of the program. These programs include the Technions Biztec program, Hebrew University’s HUstart program, Haifa University’s Hustart program, and AtoBe from Azrieli College of Engineering Startup Accelerator.

 

General Programs

These programs vary in type and purpose. Additionally there are also programs that are not sector specific and accept Hi-Tech startups from a wide range sectors . This includes programs that don’t take equity like MassChallenge or Eisp 8200 as well programs that take equity like The junction which is owned by F2 or Fusion LA which is a privately run accelerator.

 

Impact Programs

These programs do not take equity or give investments. These programs vary in type and purpose. Some of these types of programs are:

•Social welfare programs such as A3i and the 8200 Social Entrepreneurship Accelerator

•Minority empowerment and development programs like Kamatech (Hareidim), Hybrid (Israeli Arabs) and Women Founders Forum

 

Municipal Programs

These programs are run by the various municipalities to help grow the startups in their area as well as to develop products that can be used by the municipality. These programs generally do not take equity or charge a fee and run for a fixed period as opposed to municipal hubs which charge a fee to use the facilities and have no fixed length of time that companies can use their facilities. Participants generally get use of a workspace, a demo day, mentorship and the option to beta test their products at the municipality. These programs include H.A.C (Herzliya Accelerator Center) The Library (Tel Aviv Municipality) and Jerusalem Smart City Acceleration Program.

 

Innovation Labs

These programs are a combination of a traditional accelerator program and a lab.  They include private, municipal and corporate innovation labs including those that are  run as a joint venture between the corporate and the startup or Israel innovation Authority sponsored programs  that award 3 year licenses to companies like Pmatx that focus on a specific sector and take equity in exchange for services and lab time.

 

Hubs/Co-Working Space

A hub is a shared space that ranges a large room with shared unassigned desks and tables to multi story spaces that offer space to single user that includes multiple cubicles or offices. All hubs charge a fee which is usually monthly but can be weekly or hourly. The fee depends on the type of hub with municipal hubs and nonprofit hubs being much cheaper than commercial hubs thought the services they offer vary greatly. Well known private hubs include WeWork, SOSA and Mindspace. There are also hubs run by corporations like Barclays Rise. Additionally, there municipal hubs like Hubanana. In addition to offering desk space hubs can sometimes offer free Wi-Fi, meeting rooms, fully furnished office space, month to month rental contracts, free utilities, private phone booths, printing facilities, daily cleaning services, networking events, IT support.

*******

Company Terminology

Israeli high-tech company

1) The company develops technology / intellectual property

2) At least one of the founders is Israeli

3) The headquarters of the company and/or the R&D activity are located in Israel

4) If there is no activity in Israel: one of the founders is Israeli, together with a strong Israeli tie: the management team includes Israeli managers, the company received financing from at least one Israeli investor.

5) When it is not clear whether the company is in the high-tech field, we classify it as such when:

a. The amount of investment in technological research and development (R&D) in the company is around 10-20% in software/hardware companies of the total sales cycle.

 b. The dedicated number of personnel engaged in research and development in the company is around 20-30% of the total number of employees.

 In combination of a+b - and when the main business of the company is the development of products whose right to exist is technological innovation ---  we define them as a high-tech company

 

Israel-related Company

A company which isn't listed in Israel but has at least one of the following characteristics: Headquartered in Israel; Has an R&D center in Israel; Has senior Israeli management or received funding from an Israeli company.

 

MNC

A multinational corporation (MNC) is a company that has business operations in at least one country other than its home country. IVC refers to MNCs as global companies having R&D activity in Israel. This is usually the outcome of a strategic acquisition of a local startup by a foreign high-tech company. However, this does not apply to companies that have been acquired by foreign investment/holding companies for the sake of betterment. Generally, a multinational company has offices, factories, or other facilities in different countries around the world as well as a centralized headquarters which coordinates global management.

Scouting

Scouting is the active process of searching for potential opportunities, resources, or threats that can affect a corporation's strategy, operations, and overall performance. It plays a significant role in a corporation's ability to adapt and navigate the business landscape successfully. Common types of scouting include market scouting (monitoring trends and competitors in the market), talent scouting (finding and attracting skilled employees and partners), and technology and innovation scouting (finding novel ideas and innovative technologies). Technology scouting has become increasingly important for corporations as the rate of innovation increases, modern technologies become more useful and adaptable, and technology in general becomes a necessary tool for any business’s operations.  By staying proactive in their scouting endeavors, corporations can make informed strategic decisions, support a competitive edge, and foster a culture of innovation and adaptability in the business world. Ultimately, scouting enables companies to position themselves strategically for long-term success and growth by aligning with market demands and staying ahead of the competition. 

Spin Off

An independent company created from an existing part of another company through sale or distribution of new shares.

 

Startup

A new business venture in its earliest stages of development.

*******

Company Stages and Status

Seed

A startup company, which is in its early days of product development and fund raising.

 

Research and Development (R&D)

Discovering new knowledge about products, processes, and services, and then applying that knowledge to create new and improved products, processes, and services that fill market needs.

 

Initial Revenue

A company whose yearly revenue does not exceed $10 million dollars.

 

Revenue Growth

A company whose yearly revenues exceed $10 million dollars and has a double digit yearly growth rate.

 

Ceased to Operate

When a company or project is listed as “Ceased to Operate” on IVC-Online*, it means that the company or project is no longer operating in its latest reported offices and the known communication channels with such company or project are not operating. “Ceased to Operate” does not necessarily mean the company or project is liquidated or dissolved.

 

Suspended Operations

When a company or project is listed as “Suspended Operations” on IVC-Online* it means that the company or project has suspended its R&D activity. However, such company or project can still have an IP (Intellectual Property) that it is interested in selling or offering integration services through third parties. It is possible that a company or project under suspension may, in the future, be re-operating and the listing can be reversed when IVC is so notified.

 

*Please note: It is important to understand that IVC lists companies or projects as “Suspend Operations” or "Ceased to Operate" only after confirming with either one of the founders or senior executives of the above mentioned. If the company or project or the above-mentioned personnel cannot be contacted after numerous attempts, IVC then lists the company or project as “Ceased to Operate”.