Public-Private Means Win-Win
Since the establishment of the Incubator Program in 1991, every $1 that the Israel government has invested has attracted $5 in private investment - driving growth of the high-tech sector and all that that means in terms of high-quality jobs, increased tax revenues, and royalties on sales.
Much has been written about the public-private ecosystem that has made Israel the “Startup Nation”. One of the key drivers of that ecosystem is the Technological Incubators program that has been administered by the Israel Innovation Authority of the Ministry of Trade and Commerce since 1991.
After a privatization process that took place between 2002 and 2010, today all of the 19 government-licensed incubators, which are located throughout Israel, are owned and operated by professional seed investment organizations – the members of the IEI. The mandate to own and operate the incubator is subject to an open and competitive tender every eight years.
With access to a rich dealflow of innovative ideas, each organization’s investment committee selects the most promising opportunities for approval by the OCS. Each year tens of new companies are established -- innovative ventures that would have little or no chance of being funded at such an early stage by venture capital firms or other investment organizations. Each company receives a seed investment of $500-600,000, of which 85% is a non-recourse loan provided by the OCS.
In addition to the funds, the IEI members also provide space, administrative & legal services and – most importantly – business and professional guidance as well as exposure to a rich network of strategic partners and follow-on investors.