Startup Israelis leave home to chase pot o’ gold at end of rainbows abroad

Zivan and Carmit Ori, both in their early 40s, moved to Sunnyvale, California, in July from Tel Aviv with their two children, ages 9 and 7. Zivan is the co-founder and CEO of E8 Storage, a startup that provides next-generation flash storage for enterprises and the cloud. He moved to the US because the main focus of the company’s business is there.

“It seemed like the right location to be for the business,” Zivan said in an email interview with The Times of Israel. “So far it’s been great.”

The best thing about relocating was “trying out new things and snapping out of the inertia and routine,” he said. But the sheer complexity of the move was “very daunting,” with a major concern being finding a school that would suit the children, along with worries about how they would acclimatize to the new environment, away from family and friends.

“It’s hard for the kids with the English obviously,” he said. And “feeling at home neither here nor there is a concern.”

The kids, meanwhile, are doing fine in their public school. Because Sunnyvale has a large community of ex-pat Israelis, there are other sabra kids in their classes. “That is why we picked Sunnyvale,” he said.

Carmit, an art therapist, is not planning to work in their first year there, although she does have a work visa.

“I will visit Israel regularly for work and we plan to visit once a year as a family,” Zivan said.

The Oris are one of the many families who have moved from Israel to the United States as the flourishing of the startup nation and its high-tech sector creates a new generation of pioneers who set off to conquer foreign markets armed with their new technologies. Ironically, the immigrants who founded Israel 68 years ago by laboriously drying up its swamps are seeing their children and grandchildren emigrate to far-off lands in the name of technology.

Some hope to come home soon. Others have a one-way ticket and remain abroad for years. Either way, their new adventure is peppered with concerns about work, children, parents and family they have left behind. And while companies may cater to the needs of their employees, the needs of the spouses and children who are dragged along are sometimes neglected.

New adventure, many worries

When a family decides to relocate, it is important for its members to understand what the motivation for the move is: is it a chance to advance a career, earn more money, experience a different culture or get away from daily stress factors, like pesky in-laws?

The reasons to move “need to be discussed openly and carefully” within the family because divergent motivations could lead to conflict, said Belinda Schwartz, a family therapist who has experience with preparing families for relocation and assisting them on their return. Some could see it as an opportunity to save money, while their partners see it as a chance to spend — on travel and experiencing a new country. Timing also needs to be right for family members; teenagers and relocation, for example, are not the best match.

“Motivation for a move can often be the desire to try and improve a difficult situation – for example, hoping that a new environment will improve a problematic marriage, or children whose social problems will disappear in the new school,” Schwartz said. But “we generally tend to take our problems with us.”

There are some 50,000 Israelis who live in the Silicon Valley area, according to Ogen, a relocation company that organized a meeting in Herzliya last month for 140 people who were planning to leave.

Israel’s interministerial Brain Gain program, which seeks to repatriate Israelis with university degrees who live abroad, believes there are about 27,856 Israeli with an academic degrees who have been living outside the country for a period of three or more years, 75 percent of them in the US. This compares with 24,503 in 2012, the figures show, based on data from Israel’s Central Bureau of Statistics.

The statistics bureau figures also show that over the last three years there has been an average net outflow (more people leaving than coming back) of degree holders (in all sectors of academia) of around 1,000 people a year.

Plan, plan, plan ahead

The key to having a successful relocation is to “plan, plan, plan, and not wake up at the last minute” to try to put the pieces in place right before a move, said Hagit Korine, a partner of EY (a global professional services firm formerly known as Ernst & Young) in Israel and in charge of the global mobility division, which offers customers an all-around solution for relocation. This includes the formulation of a relocation package – e.g., the allowances, educational assistance and health insurance the employee will get — as well as tax advice; help in finding a home, school, supermarket and bank; and guidance through immigration procedures.

“We are there for both the planning and implementation stages,” said Korine. “The ideal would be if a correct tax structure is set up from the founding of the startup, to avoid pitfalls. It is best to come to us at the early stages, but certainly essential when companies establish entities in the US or abroad. It would be advisable to come to us about a year before relocation.”

Generally, after a startup has been founded, it takes a year to a year and a half before one of the founding partners moves abroad to be closer to a potential market, she said.

“It is important to know what type of visa to ask for, because some will allow your spouse to work in the US, others won’t. In addition, if you keep going in and out of the States without the correct visa, eventually the authorities might latch onto this and if discovered to be non-compliant, the ramifications for both the employee and the company are serious and long-lasting.”

There are a number of tax issues that need to be kept in mind, Korine said. For example, a corporate tax plan and the equity structure of the company should be in place to ensure there won’t be double taxation. Relocating employees need to be aware they might be able to pay a lower capital gains tax on their options instead of a higher income tax and that in the US each state has its own tax rules.

“Israeli laws are changing and the relocation process is becoming more difficult. More reporting and transfer of information between the tax authorities is required than before,” Korine noted.

Other issues that need to be addressed include establishing where the relocating employees will be paid — abroad or Israel — and what country and standard of living their compensation package should be adjusted to.

But still, the financial elements are not the most crucial in making a success of a relocation, according to Mark Kedem, who is in charge of assignment service at EY. “Statistically, the reasons for failed relocation, defined as earlier than planned termination of the assignment, is due mainly to the family not managing to integrate into the new environment,” he said.

Among EY’s offerings are cultural training workshops and access to language teachers, he noted.

Failed relocation “is a waste of money and a huge blow to the company and to the self-confidence of the worker. Companies want and need relocation to work and are willing to invest money to make it work,” said Korine.

 

Of particular importance is a happy spouse, with a work visa and a satisfying job, Kedem said.

“More and more families cannot afford the spouse to stay at home and also there is more consciousness today about the spouse not willing to sacrifice his or her career for the sake of the relocating partner. The big challenge is when a spouse is not allowed to work,” he said.

One-way ticket

Oded Solomon, 35, who attended the Ogen relocation meeting last month, will be leaving with his wife Lihi, also 35, for Silicon Valley, possibly Sunnyvale, in December because of his job with Nokia. They don’t have a home yet but hope to find one close to where other Israelis are located. They have a four-year old child and a baby on the way.

They are leaving indefinitely. It is a “one-way ticket,” said Oded.

“Our main worry is the disconnect. There won’t be a supporting family network there,” said Oded. They hope to find a helpful Israeli community on which they can rely, he said.

“The biggest worry is how we will acclimatize there,” said Lihi. She is looking forward to leaving and is open to new experiences, she said, but will miss her parents, to whom she’s “very attached.”

Dar, 32, and Adi, 31, who were also at the Ogen meeting, are married and preferred not to disclose their family name as they were not certain they will be relocating. Both are employed as biomedical engineers and were still checking out the work options available abroad. They said their reason for leaving would be to advance their careers and climb the economic ladder.

They don’t have children yet but being away from family would make it harder to raise them, said Adi. “They won’t have their grandparents nearby,” she said. “We will have less help.”

“Relocation is about leaving the known, and the expectation of something new,” said Schwartz, the family therapist. “Usually the family is leaving behind its support system of family, friends, the family doctor and people they rely on.”

The relocating employee will usually quickly become part of a new workplace network, while the stay-at-home partner will generally be the one who has to deal with the children, the new home and the new school. “This can often lead to a feeling of loneliness and isolation,” said Schwartz.

“The working partners have to remember to call often, to listen to the difficulties that their partners are having, offer as much support as possible, while they try to prove themselves in the new workplace,” she said. “The couple’s balance is often altered, with one often becoming very dependent on the other for support, company, friendship, at least during the initial period.”

To ease the process, families should make sure they are proactive in helping themselves adjust to their new surroundings. “Use the time to get to know the new country you are in, do things as a family, maintain family traditions,” Schwartz said. Other coping strategies include joining groups like the local synagogue or other community centers, and seeking out other expatriates and professional help when needed.

Parents need to let children know that it is ok to be anxious, said Schwartz. “Tell them that you are anxious too, that there will be ups and downs and that you are there for each other. Don’t try and convince them that everything will be ok.”

And a favorite teddy bear from home could help a lot.

Of sisters and socks

Aya Shmueli Levkovitz, the 39-year old organizer of the conference and the founder of Ogen, also moved to Sunnyvale, California, 10 years ago due to her husband’s high-tech job. Spotting a need, she set up her company together with another Israeli partner in 2012. Since then, Ogen has helped steer a “few hundred families” through the quagmire of obtaining visas, drivers licenses, homes and more.

“We accompany families from the moment they decide to leave [Israel] until they acclimatize to their new environment,” she said.

Much of the work is helping clients match their expectations to reality, like knowing what kind of home to expect on their salary, as well as how to deal with cultural differences. In the US, she said by way of example, unlike in Israel, playdates for children need to be scheduled in advance, with a calendar.

Ogen introduces families to other families with children of similar ages even before they leave Israel. Most choose to live close to good schools and in areas that have an Israeli community, she said. Ogen can also make recommendations for doctors, hairdressers, babysitters and supermarkets that cater to special needs like gluten-free products, Levkovitz said — all of which makes the move easier.

In the absence of family networks, the relationship between relocation agencies and the families they serve can become very intense. Some clients come to see Levkovitz as a sister in their strange new land, she said. And EY’s Kedem recounts how the CEO of a multinational company, having relocated to Israel with his family, was hunting one morning for a particular pair of black socks he needed. Irritated, he asked his wife for help, whereupon she snapped back: “What do you want from me? Phone Mark.”