To get into most accelerators, entrepreneurs have to be well on the road to developing a product – armed at the very least with a roadmap for development of their app or technology. In the Start-Up Nation, after all, start-ups are everywhere, and they’re all hungry for funding.
But for venture capital firm Terra Venture Partners, it’s not about the project – but about the person, the bright entrepreneur who has a lot of good ideas, but hasn’t necessarily formed an idea about how to actualize them. And in its new “Create Tel Aviv” accelerator, it’s the entrepreneur, not the project, that gets the funding.
Knowing that many entrepreneurs end up failing in their first several tries at building a business – many in the Israeli start-up community say that you can’t be considered a real entrepreneur unless you’ve failed at least twice, before succeeding – Terra developed a program that aims to develop the human talent that makes up the Israeli start-up ecosystem, said Terra Venture Partners’ Barak Goldstein.
But Terra isn’t interested in the usual mix of mobile apps and web services that many Israeli entrepreneurs try to develop (largely because they think that’s what angels and venture capital firms are interested in investing in). “Today, a large proportion of Israeli start-ups focus on developing social, gaming and advertising applications,” said Goldstein. “The aim of this program is to empower a new generation of entrepreneurs in order to tackle the most pressing market challenges of the 21st century.”
Those challenges include things like developing more efficient ways to use energy, developing Internet of Things applications and devices, fintech (financial technology) solutions, food, water, and agricultural technology solutions, transportation, smart-cities, and health solutions – the “grand challenges” that everyone would like to see solved, but for which funding is often hard to come by, because it takes a lot more time, effort, and money to solve a grand challenge than it takes to build, fund, and monetize a mobile dating app.
Joining with Terra in this initiative are the Tel Aviv Municipality, the investment fund of the Bosch Group (RBVC), Visa Europe, Leumi Card and Energias de Portugal (EDP). The initiative, which has been established with an initial investment of $1 million, will operate at The Library – the Tel Aviv Municipality’s center for innovation projects.
Individual entrepreneurs will be screened, and if they qualify, will be accepted into the program and put to work “creating.” The ideal candidates will have had previous experience in high-tech, with strong proven technological abilities, but will not necessarily have experience in business. Participants will begin without a specific idea or project, and will be chosen not for the money-making potential of their start-up, but for their technological and teamwork skills. These entrepreneurs will then be exposed to real-time market needs through direct collaboration with senior executives from the leading multinational corporations taking part in the program. Additionally, they will receive support and funding from Terra Venture Partners to set up new technological ventures.
The selected entrepreneurs will spend two months in an Ideation Bootcamp where leading mentors, advisers and investors from across the world will provide valuable feedback and training. The primary aim here is to provide space for the entrepreneurs to formulate their ideas to solve the specific challenges the multinationals working with the program are seeking to solve. The entrepreneurs with the best ideas will be promoted to the next level of the program, and receive funding of up to $50,000 and four months of intensive training to develop an alpha product – no strings attached, and with no requirement to give away the intellectual property rights for what they develop. At the end of the program, Terra Venture Partners will invest up to $5 million in the entrepreneurs, with each initiative receiving a maximum amount of a million dollars.
There’s a lot of entrepreneurial and technological talent in Israel, said Goldstein – and although Terra is as big a believer in the free market as anyone, sometimes the proverbial “guiding hand” is needed to solve the problems that really need to be dealt with. “This initiative will allow leading multinational corporations to become a major part of Israel’s entrepreneurial ecosystem,” bringing their considerable resources to the table to help solve grand challenges. “For us, it is important to connect entrepreneurs with leading companies in order to develop solutions in challenging and significant fields which have a positive impact on the lives of millions, such as energy, transportation, health, sharing economy, and more.”