Why Is Israel a Start-Up Nation? And Thoughts on Crowd-Funding
Start-up companies in Australia always complain that there isn't enough capital available, whether it is from venture capital firms or angel investors.
Of course the angel investor universe is very diverse - they are by definition individual high net worth investors, often successful entrepreneurs, and finding them and aggregating them is not easy, especially for the archetypical Internet entrepreneur busily planning his or her disruption of the ASX50's business models from their garage.
Jon Medved is the founder of one company (there are others of course) which seeks to address this problem by crowd-funding.
His site, OurCrowd.com has been raising money for (almost entirely) Israeli start ups and he is in Australia discussing crowd funding, Israeli innovation culture and his own project.
I caught up with him at a presentation hosted by David and Colleen Shein this morning and afterwards we discussed both the innovation culture in Israel and crowdfunding for startups.
The big question everyone grapples with here in Australia is why a nation, like ours, which is well educated, non deferential, very multicultural does not produce more of its own GDP from its locally developed and commercialised IP.
What is the secret sauce which the Israelis? Jon insists it is not a yiddisher kop (a Jewish brain). He says that back home in Israel they are just as dismayed by their test scores compared to East Asian countries as we are. In a nutshell he says it is culture - a culture of high risk (just living in Israel is high risk he says) and preparedness to try something, fail and try again.
PWC research (available online here) shows that Israel raised 20 times more venture capital, per head of population than Australia. Israel is now the second biggest centre of technology innovation and investment after Silicon Valley itself.
Source: PWC, 'The Start-Up Economy'
The Department is currently reviewing crowd-funding regulations in Australia, following recent changes to crowd-funding regulations by the SEC in the U.S.