Angels are set to descend on Israel – and for start-ups, these investor angels may be even more welcome than the heavenly breed. For most start-up entrepreneurs, getting the attention of an angel is an answer to their funding prayers, and in early February, start-ups will have the opportunity to meet not one or two, but 28, all in the same Herzliya venue.
The brains behind this “angel mission” is Nathan Low, President of the Sunrise Financial Group, an investment bank that has been responsible for over $40 billion of lead-arranged financings globally. Low himself is a pioneer investor in Israel. “I was the first to organize a trip for institutional investors to Israel in the early 1990s, which resulted in some of the earliest big investments for what are today some of the largest companies in Israel.” Over a series of three trips organized by Low, bankers from the biggest financial institutions in the U.S. got their first look at the Start-Up Nation, and helped foster the growth of companies like Tadiran, Elbit, Elron, and many others.
The ground has shifted somewhat since then, Low told The Times of Israel, and the investment action is now with early and mid-stage start-ups. Along with his partner, Jerusalem-based Moshe Kellner, Low is bringing together 28 angel investors – ten from the U.S., ten Israelis, and eight former Americans who have made aliyah. “We’ve gotten a lot of positive response for this event, because angels love meeting other angels – and they love hearing about great new investments.”
Some of those angels heard about potential Israeli investments from the Ziontech Fund, an investment fund based on the crowdfunding model that brings together qualified investors to pool money into one or several companies the fund invests in. Investors can divide their money (the general minimum investment is $25,000, said Low) among 3-5 companies the fund “adopts” for a specific investment cycle, or invest it all in one company, if they like what it’s doing. When a cycle is completed the profits are credited to the investor’s account, from where it can be recycled into other investments or taken out.
Ziontech is one of the few vehicles open to “average” investors, said Low; the Fund itself acts as the “angel,” providing money for a start-up and acquiring equity in the company, with the profits divided among investors in the fund upon exit.
In general, said Low, the fund looks for companies with “redeeming social values,” such as cyber-security companies, “which focus on technologies that have underlying security elements as part of our charter to increase the protection of the free world from the growing attacks.” In addition, he said, “we will look at Israeli technologies that have the potential promote the values most important to the American and Israeli people – the individual, the family and the community.” Among the companies currently in Ziontech’s “hopper:” LetMobile, which ensures digital security from mobile devices; Sol-chip, which makes solar-powered batteries for agricultural purposes; and Givetogether, a platform to help non-profits increase revenue. Ziontech, via Sunrise, handles all the paperwork, said Low.
Low was an angel investor before the term was invented – since the early ’90s. “I’ve done 109 angel investments so far, 60 of them in Israel,” and with Ziontech, he hopes to expand that portfolio even further. “We’ve sourced a lot of Israeli companies and vetted them,” he said. “There is so much opportunity here, and the more angels we can bring to Israel to invest and share in the country’s success, the better for the angels – and for Israel.”