For high-tech companies, “8200” is a special number – it’s the go-to IDF unit for firms seeking top talent in engineering, communications, and just about any other area of technology. Responsible for many of the advances in technology employed by the IDF to keep Israelis safe, the soldiers of Unit 8200 take their skills with them when they leave the army and go on to develop the technologies that have changed the world. Among the companies alumni have established: Check Point, ICQ, Palo Alto Networks, NICE, AudioCodes, Gilat, Leadspace and Ezchip, to name just a few.
Those who are chosen for 8200 get in because they’re talented, but still, they appreciate the opportunity given them. And they are eager to return the favor by helping provide opportunities for others, said Inbal Arieli, head of 8200 Entrepreneurship and Innovation Support Program (EISP), an accelerator run by the 8200 Alumni Association. “It’s our way of giving back,” said Arieli. “We had the privilege of being part of an amazing organization, where we learned the technological and entrepreneurial skills to succeed, and developed a network that helps us leverage our resources to build applications, services and businesses. We want to use our experiences to help others to succeed as well.”
There are thousands of 8200 alumni in Israel, and in 2011, some of them decided to create EISP, with the intention of making it an accelerator like no other. And according to Arieli, they’ve succeeded. “The 26 entrepreneurs who participated in the first two years of the program in 2011 and 2012 have so far raised at least a million dollars on average, mostly in Series A funding.” Of those who raise seed money, 75% go on to raise further funding, she added.
The program accepts 20 entrepreneurs a year (over 200 apply, said Arieli), who participate in a five month program led by 8200 alumni and top professionals in business, banking, technology, and many other areas, who come to speak and serve as mentors. It includes 15 full-day meetings (12 hours each day) spread across 5 months, from February to July, and culminates with Demo Day on July, attended by 300 of the premier investors — venture capitalists and angels — as well as representatives of multinationals.
Almost any business idea is fodder for EISP; entrepreneurs who have established companies in areas such as Internet, mobile/media, biomedical, energy and environment, social responsibility and many other areas have participated. Applicants don’t even have to be graduates of Unit 8200, or any other advanced unit of the Israeli army, but they do need to have served in the army or National Service.
The program includes very early-stage start-ups with nothing more than a good idea and business plan, as well as more advanced start-ups that may already have a prototype or a beta application. “We like to mix it up,” said Arieli. “We believe that in a diverse group, entrepreneurs will hear diverse ideas and get exposed to viewpoints that they usually wouldn’t hear, and learn more and better ways to improve their technology or business model.”
That diverse discussion is a key feature of EISP, said Arieli. “At least 30% of the program is devoted to brainstorming and discussing the successes and failures participants have had in trying to build their businesses. We are very big believers in the power of the group to help entrepreneurs succeed.”
Program participants rave about their experiences. According to entrepreneur Keren Sela, whose start-up LifeGraph provides a platform for psychiatrists to help care for their patients, “we have the opportunity to speak to many people in the investment community, like angels, who we would never be able to get the attention of. The program brings them directly to us.” Tomer Treves, whose start-up Adnimation uses animation to draw attention to web banner ads, said he had learned much from the professionals who speak to the group. “We learn a great deal from the mentors and peers,” he said.
The peer discussions, both said, have had a major impact on the way they run their businesses. “I changed my business plan when the group asked me questions I had only thought about but had never satisfactorily answered,” said Treves. “It gave me the opportunity to refocus, and we that has enabled us to get our first customers.” Sela, too, said that the discussions had helped her change course, “by inspiring me to shoot for something bigger than I had planned for.” The education they are getting, the entrepreneurs said, confirmed to them what they had heard from others – that “this is by far the best accelerator program in Israel.”
Opinions are one thing, but what counts are the results — and EISP can boast about its accomplishments, said Arieli. “Seventy five percent of the program’s alumni currently lead a start-up as founders, and those start-ups employ more than 270 people in Israel and overseas.” Among the program graduates that investors have taken serious interest in are Carambola, which has raised $5 million from VCs and private investors, and is about to expand its activity to the US; WireX Systems, which raised about $2 million from Magma Venture Partners; Lacoon Security, which has raised over $10 million to date; Zipory, which has raised over $1 million from private and strategic investors; and a host of others, said Arieli.
One thing participants especially like, said Arieli, is that EISP does not require anything from participants — not payment, and not equity, unlike nearly all other accelerators in the country. In fact, everything is done on a volunteer basis, with all mentors and speakers donating their time to helping the entrepreneurs succeed. Of course, to pull it off, EISP needs strong partners and sponsors — and it has them, with firms like Bank Hapoalim, Ernst & Young Israel, law firms Naschitz Brandes and Pearl Cohen Zedek Latzer Baratz, the BRM Group, AOL Israel, Nextage, the City of Bat Yam, and the Recanati Business School at Tel Aviv University, all helping out.
Among the venues where EISP program members meet are the Tel Aviv offices of the Naschitz Brandes law firm – and Hanina Brandes, who heads the firm, is honored that the 8200 folks chose his venue as the one to run the program from. “This is an incubator you cannot find anywhere else in the world,” Brandes said. “When you see graduates of 8200, as well as participants in the program they are running here, you know you are going to have some great ideas emerging.” Brandes’ is the premier law firm for Israeli tech companies who are going public or being acquired, servicing most of the big deals in recent years, from the IPO of Checkpoint on down.
Not only is 8200 EISP a mostly volunteer effort — but the little money that it does require, such as paying for supplies, travel expenses, and the program manager’s salary, is donated by alumni and supporters. Neither the government nor the army kick in anything to keep it going — a fact Brandes finds difficult to accept.
“Half of Israel’s exports today are from tech,” Brandes said. “The government does very little to support the companies that have become the backbone of the economy, and instead spend the public’s money on a lot of very interesting programs, many of which are totally irrelevant to the country’s needs. The fact that the country’s biggest export is tech, but we do not have a minister or even an assistant minister in the government whose job is specifically to enhance those exports, tells you everything you need to know.”
On second thought, said Brandes, maybe that’s a good thing. “I was once discussing this with (former Bank of Israel chairman) Stanley Fischer, and he told me that it was probably the tech industry’s good luck that there is no official in charge. Considering how government handles other issues, we’re probably better off keeping programs like 8200 EISP private.”