The power of the Israeli entrepreneur

The unique character of the Israeli entrepreneur is the driving force behind Israel's successful hi-tech industry, Shmulik Zysman, founding partner of Tel Aviv's ZAG/Sullivan Law Offices told The Jerusalem Post. Zysman, one of the long-standing lawyers in the Israeli hi-tech industry, and Oded Har-Even, partner and managing director of the firm in New York who has built a reputation for taking Israeli companies to the Nasdaq stock exchange, recently sat down with the Post to discuss what lies behind the success of the Israeli tech ecosystem. ZAG/Sullivan is a unique international law firm with offices in Tel Aviv, Boston, NY, Washington and London, as well as a practice in China. The firm is a powerhouse when it comes to advising hi-tech and life sciences start-ups doing business in Israel and the US, representing roughly a quarter of all Israeli companies being traded on NASDAQ today. “When we realized that our best clients needed the world to grow, that was when we decided to become an international law firm, and so we opened our first office in NY. That was almost 23 years ago,” said Zysman. “The whole idea to go international was to help the hi-tech companies, because hi-tech is a worldwide business.” This has been the firm's outlook these past 25 years – and has been since the now-booming Israeli start-up scene was in its infancy. As such, the firm acts as a “one-stop-shop,” accompanying start-ups from their first investment through to their first initial public offering and beyond. Over the years, the firm has had great successes among its clients. One of them, Mazor Robotics, an Israeli spinal-surgery company, was sold for $1.6 billion last year in the largest ever exit of a medical device company in Israel. “We accompanied Mazor from its early stages and through its sale, and so we feel as though their success is also our success,” Har-Even said. “We view ourselves as partners, not just as lawyers, and so we not only advise on the legal side, but we also help make many introductions and provide a lot of advice that is more business-related – essentially helping companies navigate the ecosystem.” According to Har-Even, Israeli companies, especially in the life sciences, have many accomplishments to show for such a small country. So, too, do other hi-tech fields, said Zysman, such as cybertech, fintech, medical cannabis, artificial intelligence and space technologies, an up-and-coming field. “We have huge opportunities, and the fact that Israel is all about start-ups, and the fact that everybody looks to the Israeli market shows you that,” Zysman said. “Once we only had investments from the US, but today we are seeing investments come in from Europe and China as well. “We are facing danger and security problems, so we are good with cyber, but why are we so good in autonomic cars, in life sciences, and in other fields? What advantage does Israel have, which has never manufactured cars? How have we become the center of the world in this field? It shows you the power of Israel,” he said. SO, WHAT makes this small country such a powerhouse when it comes to the hi-tech industry? Well, a little chutzpah for one thing. According to Har-Even, Israeli companies are at a clear advantage because of this distinctively Israeli trait. “This is a unique and great thing to have because they don't take no for an answer.” This coupled with the “Israeli brain” and the character of the Israeli entrepreneur are what make all the difference, according to Zysman. “The character of Israel is very unique – life in Israel and the way we are raised from elementary school to university. There is a different mindset,” he said. “Sometimes, when I look at other countries and nations, they have other advantages, but in this respect of taking an idea and making it happen, we have the advantage.” Zysman added that another staple of the Israeli entrepreneur is loyalty, so that hi-tech workers are more loyal to their employers than in other countries, creating a more stable environment, as well as connections – both within the small country and among the global Jewish community. Both Zysman and Har-Even agree that the Israeli hi-tech industry today is in “a very good position.” “We have some disadvantages, of course, for example, in life sciences we need the help of the big [investment] firms in the US,” Zysman said, while Har-Even said that securing investments is a challenge facing all Israeli hi-tech companies looking to expand, but one that can be overcome with the right connections and know-how. “At the end of the day, entrepreneurs face the same problems everywhere: to get funded, to break into the market, to do the experimental thing for their products,” Zysman said. “Usually, your aim is to conquer the world, and it starts in the US, so being near the market is, at the end of the day, an advantage. That's why we advise our clients in Israel to establish a base in the US, to be closer to the market.” Despite this, Zysman says that those who say the industry is at a disadvantage, or that Israel faces added risks with respect to the hi-tech industry, are “pessimists rather than realists.” “Every good field has competition, and we will see competition everywhere else in the world. We still have the Israeli brain, and just because there is competition doesn't mean we are not in a good situation. We are standing on very solid ground in this industry,” he said. Har-Even added, “People already understand the potential in Israeli companies, and they understand the risks.” Today, he said, there are many opportunities in Israel and many promising companies looking for investments. “At the end of the day you ask yourself, 'What is most important in a start-up company? The IP or patent, or the product, or the market. What is the most important thing?' I say it's the people,” Zysman said. “If you have good leadership and excellent people, they will face the world, and this will make our industry keep going forward and make our industry successful in the world.”

The power of the Israeli entrepreneur

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