The Israel Hi-Tech Conference 2003, initiated by the Israel Venture Association, took place on April 6-8. Despite the political, economic and security situation today in Israel as well as in the USA, the conference, perennially the showcase for both the hi-tech and the venture capital industry, brought together some 400 industry leaders, hi-tech companies and financial institutions. Only a small sprinkling of foreign visitors attended. The agenda included discussions on the global technology innovation road map, definitions of markets that will spearhead the industry's future growth and examined the active role that the Israeli Hi-Tech industry and its community can take upon itself.
Recalling with fondness the resplendent cocktail parties and lavish luncheons hosted by the IVA in previous years IHTIR accepted the invitation to the "Opening Party" that was held on the 30th Floor of Tel-Aviv's Levinstein Tower. We looked forward to renewing acquaintances. Israel, on April 5, was still in a high state of alert and one did not mind the strict security measures when entering the Tower. We quickly realized that the IVA had chosen to put on a modest face and were offered frankfurters in rolls, American style, and Hungarian pastrami. We saw it as an appropriate downsizing as the War in Iraq was still in progress, and at home a deep recession in the Israeli economy and venture capital industry.
Skeptics spoke of 2006 as a "back to better days", while inveterate optimists pointed to 2004. Of the several hundred guests, most were in their 30s. They came to see, to meet the "moneyed people", but they had essentially chosen to reserve their presence to the working sessions that followed over the following two days.
Once among the "old timers", we did exchange conversations with Yigal Erlich, founder of Yozma, the government guaranteed VC fund that ushered a period of big investments in the mid 1990s. We also chatted with Eddy Mlavsky, the incredibly successful chief of the BIRD Foundation, turned venture capitalist. The iconoclast Zvi Vromen, founder and senior partner of Millennium, Israel's first and only VC fund dedicated to finance rare materials, had only good words for Glycominds, a startup in the Millennium portfolio. Erlich and Mlavsky were among the recipients of 10th Anniversary Award of the Israel Hi-Tech Industry. Other recipients included Efi Arazi, founder of Scitex (Nasdaq:SCIX) and Electronics for Imaging (EFI), Eric Benhamou, Chairman, 3COM and Dr. Dan Maydan, President, Applied Materials. Mr. Ariel Sharon, the Prime Minister of the State of Israel, presented the awards.
In discussing ongoing trends and developments in Israeli venture capital, Zeev Holtzman, founder of Giza (that has raised three funds totaling $316 million), pointed out: "that through 2001, venture capital funds raised a whopping $10 billion for investment in Israel. In 2002, however capital raising skidded to a virtual halt as a meager $63 million was raised., which was more than offset by return of $191 million in capital commitments to investors of three funds". Holtzman pointed out that seed stage companies are being hurt severely by the lack of VC funding. The shortage of available funding is due to the fact that most of the VC funds that raised moneys in 2000 or earlier, cannot invest in startups because they will be winding down their activities in the next year or two precluding a timely exit.
Yet a bright spot in 2002 was the continuous high interest by foreign investors from the US and international companies. They supplied about half of the more than $1.0 billion invested in Israeli high-tech companies last year.