Start-up nation packs its bags

To put it plainly, the venture capital well has run dry

By SHLOMO MAITAL
March 6, 2013 12:19
Genzyme manufactoring in Boston 521

Genzyme manufactoring in Boston 521. (photo credit: BRIAN SNYDER / REUTERS)

 
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When US President Barack Obama addresses the newly formed 19th Knesset during his March visit to Jerusalem, I strongly doubt he will say the following: “About half of all start-ups in Silicon Valley are launched by foreigners, with Israelis leading the way in proportion to Israel’s population. So thanks, Israel! America benefits when ‘Start-up Nation’ packs its bags – and unpacks them in Silicon Valley or Boston. You bring us ideas, technology, energy, jobs and great new businesses! Keep ’em coming!” But if he were to make such a statement, it would all be true. Despite the growing difficulty involved in acquiring a US visa (America is making it increasingly tough for dynamic entrepreneurs to emigrate), many Israelis are choosing to launch businesses in the US rather than at home.

According to IVC Research Center, which analyzes and monitors Israel’s high-tech industry, 466 start-ups were launched in 2012, down 32 percent from 683 in 2011. Part of this decline may be due to the fact that would-be entrepreneurs are being discouraged by the growing difficulty in raising venture capital (VC) at home.

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