Israel’s OurCrowd spreads investment joy, and risk
Crowdfunding is quickly becoming a popular model for start-up fundraising, and an Israeli group has taken the model and run with it
There’s a new way to invest in Israeli start-ups – the crowdfunding way – and a new, innovative crowdfunding project organized by ten of Israel’s top investment professionals, called OurCrowd, announced Tuesday that they had closed $5.5M in Series A funding.
The group said that it had successfully completed 12 company funding rounds from accredited investors in its first quarter of operation, with an average deal size of $500,000 for each company. Altogether, total capital raised for companies and the platform is over $12 million.
Crowdfunding is fast becoming a popular alternative for both companies seeking to raise money but who are having trouble finding angels with “deep pockets” to assume all the risk, and for investors who want to get involved in tech investments while spreading that risk around. A crowdfunding manager will arrange the details — recruiting the members of the consortium, and finding the best investments.
OurCrowd is a new and innovative way to invest in Israeli startups, said Jon Medved, OurCrowd Founder and CEO. “We are focused on linking global accredited investors with Israel’s dynamic and exciting Start-Up Nation scene, which is generating investment opportunities unlike any I have seen in the past,” said Medved, a pioneer in Israeli hi-tech. As a serial entrepreneur, Medved was previously the co-founder and CEO of video ringtone pioneer Vringo, and Israel Seed Partners, one of Israel’s leading venture capital groups with over $260M under management.
As an equity crowdfunding platform, OurCrowd identifies companies seeking early stage investment, and brings those opportunities to its membership, who get to choose which deals they participate in via OurCrowd managed partnerships, said Medved. OurCrowd co-invests in all of these deals, and manages the ongoing investments in the companies, including OurCrowd board participation.
“Membership in OurCrowd is limited to only those meeting stringent accreditation requirements. Further, deals being funded are kept confidential and are not disclosed to the general public until complete,” said Medved, adding that Our Crowd was fully compliant with government regulations on investment recruitment. “With completion of our initial platform funding round and 12 new company deals, we have emerged as a leader in the increasingly competitive equity crowdfunding space.”
Among the companies OurCrowd has raised money for so far: AbesMarket.com, an online organic market; herpa, the new internet information venture from Bob Rosenschein, founder and CEO of Answers.com; TradeOS, a freight forwarding automation venture; Parko, a unique social parking solution; Fireblade, a website security company; and Consumer Physics, which is developing a pocket spectrometer for smart phones
Medved is joined in the new venture by ten other investment pros, including Steven Blumgart, formerly of Glencore; Pini Lozowick, formerly of Broadcom and Alta Berkeley; Elan Zivotofsky, formerly of Goldman Sachs and Lehman Brothers; Zack Miller formerly of SeekingAlpha; Gadi Mazor, formerly of Onset, Robbie Citron of Jerusalem Global, Jay Kalish of Allot, and David Arnovitz formerly of SecureWare.
Steven Blumgart, OurCrowd’s Chairman, said that “what sets OurCrowd apart is our highly differentiated approach. We are not a typical ‘crowdfunding site,’ in that we are an experienced team, working with a highly exclusive set of deals and investors. We diligence our deals carefully, invest our own capital, and manage each investment as the general partner of a company-specific investment partnership.”
