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Sunday, November 07, 2010

Israeli fund to focus on start-ups

This article is not only interesting because of what it says about the specific fund, but also because of what it says about Israel's venture capital industry in general.
Mr. Sanilevich said the fund will also solve a gap in Israel’s VC world, which lacks a significant number of angel investment funds, focused on smaller Internet and software start-ups. “All the funds are big and doing only two or three investments a year,” he said.

Start Up Factory Fund 2 aims to invest incrementally about $500,000 in individual Israeli start-ups — small by classic VC standards — but enough money to finance start-ups in the cloud computing sector, which usually require smaller amounts of money than those in other high-tech sectors. The fund also expects most of its start-ups to sell quickly and for under $10 million.


Many VC firms in the United States have shifted to focusing on smaller investments, and while Israel has always had a few of these angel funds, the trend seems like it is also growing here. Sanilevich said he knows of at least three similar funds starting up in Israel, and said he expects to see more.
Having looked for angel money for clients many times, I can tell you that a fund like this fulfills a real need here in Israel. Let's hope it's successful.

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