The Crowd Investing Revolution in Israeli High Tech

“For entrepreneurs, the hardest part is getting started: they aren’t sure their technology will succeed, they need to hire the right mix of employees, and most importantly, they need to raise enough operating funds to give them a flexibility.” says Shahar Shraga, co-founder and CEO of ExitValley, Israel’s first venture capital platform. The ExitValley platform was founded in 2015 offer to start-up an effective opportunity to raise capital, while allowing the general public to invest in Israeli companies and become shareholder partners of the Start-Up Nation. The company was founded by the architects of Israel’s internet investment industry and leads the market with the most rounds completed and the most funds raised.

“After founding the company, we held the first fundraiser ever on an Internet platform in Israel, reaching $400,000 in less than 24 hours,” Shraga recalls. “At this moment, we realized we had the power to revolutionize the market for raising capital in Israel. Today, entrepreneurs from all industries and sectors contact us, and we are proud to have become an integral part of the Israeli innovation ecosystem.

Shraga and his partner Nir Meital, co-founder and CMO of the company, are behind the creation of the platform. Shahar holds a BA from the University of Haifa and an MBA from Ben Gurion University of the Negev. Nir holds a BA in Economics and Political Science from Tel Aviv University and an MA in Security Studies from Bar Ilan University. Both served together as officers in an elite military unit and continued together in the reserves as company commanders in the same unit.

Yoel Ettedgi, the company’s co-founder and CTO, is responsible for developing the company’s technology infrastructure. With over 20 years of high-tech experience as a consultant, investor and project manager, Ettedgi designed and created ExitValley’s technology platform, as well as its innovative trading tools.

“Since the establishment of the company, we have raised over $60 million for over 100 companies”says Shraga, “including start-ups in a variety of industries such as cleantech, medical devices, digital health, edtech, fintech, agritech, foodtech, and many more.”

“The beginnings were very difficult and there were many obstacles,” he continues. “At the time, the ecosystem was still operating along more traditional lines of raising capital, with early stage start-ups suffering the greatest lack of available funds. As our model was very innovative in Israel, we had to educate almost all sectors of the industry, including the regulator, lawyers, entrepreneurs and investors.

“We started this process and today it is thriving. There are dozens of entrepreneurs who have succeeded with us.

“Some sold their business, others grew with them and even went public. We are proud to know that we have contributed significantly to the growth of our portfolio companies. They hire employees, grow their businesses and grow the economy. It is with deep satisfaction that we can say today that our name appears in the notebooks of almost all entrepreneurs at the start of their career. We have a wealth of knowledge and added value that we can bring to any company that decides to work with us.

Pioneers: The companies that appear on the ExitValley digital platform come from very diverse fields, but they have in common to be avant-garde and promising in their fields. Among the start-ups appearing on the site these days, Clariter, which provides an innovative solution to the global plastic problem by transforming the material into an industrial raw material, and the medical start-up BioXtreme, which has developed a technology for rehabilitation of stroke victims. There are also start-ups from the world of leisure and recreation, such as CreamCol, which has developed a patented technology to transform any alcoholic drink into an edible alcoholic cream. All start-ups that appear on the ExitValley site also benefit from the platform’s proprietary technology.

“Our technology platform enables the complete set-up of financing rounds, in all aspects (content, business and legal), which allows us to better manage the financing rounds, in collaboration with the entrepreneur”, explains Shraga. “But beyond the system and additional tools we are developing, the knowledge and experience of our team is a significant advantage. After more than 100 successful financing rounds, we can say that we know what our investors are looking for.

ExitValley was a forerunner in this field and largely contributed to the regulatory changes which enabled the establishment of its Internet platform. The company quickly perceived two important realities: that there is a significant shortage of capital for Israeli start-up companies and that investment in Israel’s high-tech industry is only accessible to a very small group, consisting mainly of venture capitalists venture capital and incubators.

“We have certain advantages over other entities that claim to do what we do,” says Shraga. “We are the biggest platform in Israel with the most experience and have raised the most money for the most companies. The method we have built is a technological system on which fundraising is based, and that gives us a big force multiplier. We know how to use audiences and communities for our fundraising. Plus, we’re a creative company that knows how to navigate a very complex and competitive environment. In the beginning, the environment regulation in Israel was less developed than that of Western countries like the United States or England, and it was not easy to pave the way for everyone. Today, the path is smoother, but we we remain complacent.ExitValley is always working on creating new investment channels in the venture capital world, as well as developing various technological systems to simplify the whole process. of the process, both for the investor and for the entrepreneur”.

“Another advantage we have is human capital,” he adds. “We have one of the most experienced teams in Israel, we have worked with hundreds of entrepreneurs and we have developed very precise methodologies that allow us to identify the DNA of success. Unlike other platforms, we adhere to very strict rules. Not all businesses reach the stage of obtaining capital. We have a set of many tests that we do with each of the companies, and only the good ones make it to our platform. These are usually later-stage companies, which have already raised funds from important entities such as incubators, funds or leading investors; this allows us to choose the most appropriate companies that we believe will be successful in the future”.

An opportunity to grow in Israel

Companies listed on the ExitValley platform are Israeli or oriented towards Israel, such as companies that have been sold or are partially owned by investors from foreign countries. “We attract investors from all over the world,” says Shraga. “30% of our investors come from Europe, the United States, Australia and New Zealand, and of course the rest are from Israel.”

“There is a feeling that there are great opportunities for growth in Israel, despite the instability and everything that is happening in the capital market right now. Israeli start-ups are a major engine of growth in Israel and around the world,” says Shraga. “There are several factors that contribute to this situation: the number of companies that are created here each year, the human capital that is formed in Israel, the investment in research and development, the openness to innovation and the excellent curricula and deformation programs. . There is a whole industry here that generates innovation.

“On the other hand, there are challenges and there are quite a few problems in the industry,” he adds. “Over the past decade, the number of new businesses has declined by almost 60%. Entrepreneurs these days aren’t so quick to leave a stable workplace and strike out on their own. They are aware that no one can predict exactly where the roller coaster will stop.

“At the same time, today’s start-ups are of higher quality. We keep hearing about a lot of capital raised by foreign funds investing in Israel, but most of the money goes to start-up companies. Start-up financing is less saturated, and the entrepreneur who decides to leave his regular job will find it difficult to raise funds. We, as we have already said, are also active in these stages, and we allow good companies to carry out fundraising”.

“Our best calling card is the dozens of successful businesses we have in our portfolio, and proof that a lot can be achieved in this space. Many investors from Europe, the United States and even the United Arab Emirates are constantly on the lookout for Israeli companies, which we see in our funding rounds. From my point of view, great things are being achieved here, so many people from all over the world want to be part of the Start-up Nation. At ExitValley, we make this possible”.

Leave a Comment