Startups making a new start

Maryland-Israel Development Center helps local firms set up shop across the pond.

By DAVID SHAMAH
June 27, 2011 22:51
ABBA DAVID POLIAKOFF speaks with Debby Yerushalmy

Signal BD 311. (photo credit: BaltimoreJewishLife.com)

The Jewish community of Baltimore has a long and thriving relationship with the State of Israel, even before the establishment of the state.

Hadassah founder Henrietta Szold was born in Baltimore, and the city was home to Joseph Schwartz, head of the Joint Distribution Committee in the 1940s, by whose efforts perhaps a million Jews were saved from the clutches of the Nazis. And, The Exodus 1947, “the ship that launched a nation” that ferried DPs from Cyprus to the shores of the Land of Israel, was bought and refurbished on the Baltimore docks.

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So it may not be surprising that Baltimore is also the home of one of the more innovative programs to help Israeli startups establish their operations in the US, opening up for them markets and opportunities that they could only receive exposure to “on-site” in the US.

The Maryland-Israel Development Center, says Chairman Abba David Poliakoff, is there to help Israeli companies crack the US market, and helps them set up shop – literally – on American shores.

And while Israeli startups could, if they set their mind to it, probably open offices and hang out their shingles without any help, they would not have access to the huge network of connections the MIDC can make available for aspects of the move abroad, whether it’s finding cheap office space, introducing startups to investors and customers, or even helping “grease the wheels” to help startups get access to lucrative private or government tenders and contracts.

“Our job is to help Israeli startups get a ‘soft landing’ in the US, providing them with an instant infrastructure that can save them time, effort, and money,” says Poliakoff.

Anyone who has moved house knows what a hassle it is – and how much readjustment is involved. Moving house is considered one of the five most stressful experiences healthy people face in modern life, and changing jobs – starting in a new work environment – is another major source of stress.



So you could imagine how tough it is to do both at the same time, setting up an office in a foreign country, and having to connect with customers, suppliers, and opportunities.

MIDC, however, has that covered, says Poliakoff.

“It’s like a one-stop service; startups call us up and tell us what they need, and we arrange the infrastructure, whether it’s an office, attorney, accountant, etc. At the end of the day, they just move in and start to sell.”

And MIDC has startups covered there, as well. Located in Baltimore, MIDC is a private non-profit that partners with the Maryland Department of Business and Economic Development, which of course aims to bring more business to Maryland. If that sounds like an odd place for a hi-tech startup to set up shop, you’re behind the times, says MIDC Executive Director Barry Bogage.

“Interestingly, Prime Minister [Binyamin] Netanyahu asked the same question of Maryland Governor [Martin] O’Malley when he recently visited Israel.

The answer is that Maryland has almost everything that an Israeli startup could be interested in.”

WHAT STARTUPS are interested in is opportunity, and the Maryland area offers that in spades, it turns out – mostly due to its proximity to Washington, where the federal government has billions to spend on all manner of technology. The National Institutes of Health is located in Bethesda; the Food and Drug Administration’s head offices are in Rockville; the National Institute of Standards and Technology, National Security Agency, and the Aberdeen Proving Ground (quickly becoming the US Army’s hub for science and technology) – and many other hi-tech oriented US government agencies and groups – all call Maryland home.

Naturally, proximity to those sources of funding and networking interest companies from all around the US, and the world – and Israeli companies involved in medical and defense research, cybersecurity, and Internet services, will find plenty of potential partners and customers.

Recently, the MIDC, through its Marketreach America corporate partnering program, hosted a delegation of 14 Israeli startups, part of the “roadshow” I’ve mentioned in recent weeks, organized by the Trendlines Group.

Trendlines CEO D. Todd Dollinger, who announced a new investment fund co-sponsored by the MIDC and Trendlines at the event, calls the organization “unique, in that it is one of the few, if not the only, private sector group that works to help bring cutting edge Israeli technology to the US, helping them navigate unfamiliar and often intimidating territory.”

Indeed, the MIDC does very good work, says Dollinger.

“The MIDC and Trendlines have been successfully working together for 14 years to promote business between Israeli and US companies, and has assisted hundreds of companies in reaching US markets.”

Most important for the State of Maryland, says Dollinger, the MIDC/Trendlines partnership “has facilitated the opening of offices in Maryland for more than 30 Israeli companies.”

So effective is the partnership that the new investment fund, which aims to invest moderate sums (between $50,000 and $750,000) in early stage companies, closed barely a week after it was first announced.

Indeed, the MIDC – through its MarketReach America program – helps Israeli companies takes full advantage of the opportunities available.

“We’ve already helped over 30 Israeli companies get a foothold in the US, not to mention the plethora of academic partnerships we’ve helped set up with the many academic institutions in this state,” says Bogage. And the fees the MIDC charges are “very reasonable,” says Bogage. “As a non-profit, our aim really is to help Israeli companies, and help to develop the Maryland economy. It really is a win-win for everyone involved.”

While most states have development programs whose job it is to bring more business to the state, Maryland is unique in that it partners with a private non-profit – essentially “outsourcing” some of the nutsand- bolts of the work to an organization that has the wherewithal to make things happen.

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