Israeli Startups’ Early Exits Yield Investment Opportunity

Medved says U.S. tech giant Cisco has scooped up 13 Israeli startups, and co-panelist Berry chimed in that Intel derives close to 50% of its profits from Israel.

"Silicon Valley thinks Israel is a great value in buying good companies cheaply," says Medved. That value though is increasing, he adds, since many of the startups are founded by serial entrepreneurs who are at it again a second or even third time.

"When [CheckPoint Software Technologies founder] Shlomo Kramer shows up in your office and you don't invest, something's wrong with you," the OurCrowd CEO quips.

The latest check writers, he says, are coming from Asia.

"Samsung, the Chinese are coming in droves, investing quite prolifically," he says, adding that Hong Kong-based VC firm Horizons Ventures has invested in 22 Israeli startups in such areas as cyber-security and drone technology.

OurCrowd's raison d'etre is to enable investors who are not billionaires like Horizons principal Li Ka-shing participate in these ground-floor stories by enabling accredited investors with at least $10,000 to acquire equity in Israeli startups.

In a brief hallway encounter, Medved told ThinkAdvisor his new target is the U.S. RIA community.

"A lot of people have discovered Israel, read the book "startup Nation" and say, 'I want to play; but if you're not an angel investor, you don't. We research the best deals [and provide access] for our 8,000-plus members," he says.

Even the public sector is tapping into Israeli technological innovation, albeit for public purposes.

The U.S. National Institutes of Health (NIH) wants to promote the development of cures for rare and neglected diseases of the sort that big pharma companies might view as not commercially viable.

Nora Yang, director of NIH's National Center for Advancing Translational Sciences, told conference attendees of her work developing a funding mechanism tapping both public and private investment to potentially deliver a 21% investment return and 14 to 15% return on equity to investors in these orphan drugs.

And UCLA engineering professor Yoram Cohen discussed Israel's approach to water technology, of particular interest to water-thirsty California, where the conference was held.

Cohen noted that although California is a wealthy state in a wealthy nation, with a state economy that would rank No. 8 in the world, nevertheless there are 2,600 community water systems in California that rely on groundwater as the primary source of drinking water, with 700 community systems whose groundwater is contaminated.

The professor said Israel has led the way in reclaiming and desalinizing water, in using lesser quality water for agricultural and industrial uses, and in using its water efficiently through drip irrigation and water meters, detailing ways California might get more out of its own scarce resources.