Yoram ettinger
Israel is ranked as the top foreign source of deal-flow, ahead of Canada, China and India, by US VC fund managers. The survey, conducted by Delloite Touche, has also ranked Israel as the second (to Canada) most attractive source of entrepreneurs. 46% of US VC funds invest abroad (The Marker, December 6, 2007).
Standard & Poor's raised Israel's credit ratings, for the first time since 1995, to A (long-term foreign currency rating), to AA- (long-term local currency rating) and to A1+ (short-term domestic rating). S&P based its decision on Israel's economic indicators: GDP growth; a shrinking budget deficit; reduced public debt per GDP (2000 - 87%, 2001 - 92%, 2002 - 100%, 2003 - 102%, 2004 - 101%, 2005 - 97%, 2006 - 88%, 2007 - 80%); low inflation; balance of payment and balance of trade surplus; tax decrease; continued market reforms, etc. Improved rating is expected to attract more overseas investments and lower interest on loans (The Marker, November 28).
Israel was fifth in the world in GDP growth - 5.2% in 2006 (Globes, December 5). Israel's GDP grew 6.1% during the third quarter of 2007, the 17th quarter of straight growth since mid-2003, the longest growth streak since 1948 (2001 - minus 0.4%, 2002 - minus 0.6%, 2003 - 2.3%, 2004 - 2.5%, 2005 - 5.3%, 2006 - 5.2%, 2007 - projected 5.5%-6%). Overall investments rose 24% during the quarter (Globes, November 26).
And Israel leads the world in civilian Research & Development per GDP - 4.5%, compared to 3% expected by the EEC by 2010. SAP and McCaffee expand their R&D operations in Israel, with both hiring additional personnel and McCaffee constructing a new site (Globes, November 14).
Israel has the second largest concentration of startups per capital next to Silicon Valley. Israeli startups developed crucial flash drive, call center and instant messaging technologies.
According to Jon Medved, both Israel and Silicon Valley share energized entrepreneurial spirit, informal work atmosphere, pioneering risk-taking ethos and a large number of high-quality immigrants. 400 Israeli startups emerge annually, more than any European country. The number of funded startups has doubled since 2000.
Next to the US, Israel has more stocks traded on NASDAQ than any other country. High-tech (which is minimally vulnerable to terrorism and political instability) accounts for 50% of Israel's exports - about $15 billion annually. Israeli companies have easier access to Asian markets, since they are not perceived as a commercial threat (Washington Post, December 5, 2007).
Israel's Telematics was acquired by Singapore's St. Electronics (Globes, November 20). Israel's Esther Neuroscience was acquired by Britain's Amarin for $15 million and additional $17 million per milestones (Globes, December 6). Israel's Oridian was acquired by India's Ybrant for $15 million (Globes, December 5).
GE Medical participated in a $30 million round by Israel's InsighTech (November 30). US-based Radius Venture participated in a $27 million second round by Israel's Mendigo (Globes, November 21). Varburg-Pinkus participated in an $8 million third round by Israel's NuLens (Globes, November 21). Sequoia invested $8 million in the first round of private placement by Israel's DensBits (Globes, December 3). Taiwan's CIDC VC fund led a $6 million third round by Israel's AdvaSense (Globes, November 22).
May Israel's entrepreneurs and policy-makers heed the legacy of the Maccabees and of the Biblical Joseph: never compromise your dream-vision; especially when you're at the helm, besieged by temptations, pressure and public opinion polls.
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