As one of the leading investors on the international venture scene, Jon Medved gives his thoughts about French Tech, Israeli VCs and equity crowdfunding business.
Leaders League. Ventures really seem to be flowing in your country. How would you describe the Israeli startup ecosystem?
Jon Medved. The venture scene in Israel is really on fire. Right now, this year, it’s going to be $5B invested in venture-backed startups for approximately 1,000 companies. My understanding is that this number is close to 80% of the whole of European activity. These figures also mean a 100% growth of our investments in just two years. If you relate this level of investment to our population, which is only about 8 million people, then you will understand that Israel is a rooted-venture country.
Venture is our national business. Some countries focus on oil, others on gold or heavy industries, but we are dedicated to injecting money into young companies representing a various range of sectors. This is what we are, what we breathe and what we sleep on. More interestingly, we have reached such an altitude while being under a more and more struggling political environment.
Leaders League. Do you think money will keep on streaming into Israel?
J. M. Even though we have recently heard rumors that our pace of foreign investments would slow down, I think we are still on the way up. For example, a few people thought the French company Orange would stop looking at Israel as a top priority. But this not true, as Orange’s CEO recently visited us and told us he would increase partnerships in our country, which are today at an all-time high.
Leaders League. Talking about France, do you see its startup sphere as dynamic?
J. M. France has a very interesting situation. The entrepreneurs are great and the technologies likewise. But the government regulation is just too much. I am very skeptical of any country where you cannot set up or close a company in 24 hours, or just fire people for the firm’s interest. If you really want to compete in the startup world, you must have the same conditions of growth that we have in Silicon Valley or Israel. Concretely, tax rates and labor laws constitute a real break to the journey of French startups. As a consequence, when French companies finally make it, they are even more deserving.
Leaders League. Coming back to your activity in Israel, can you explain the particularity of OurCrowd’s business model?
J. M. We are the world’s largest equity crowdfunding platform. We are investors like other big venture funds but with one essential difference: we have no fund; instead we have a website and 10,000 global investors. The principle is that rather wealthy individuals go to our site, choose which deals they would like to invest in and write big checks starting from $10,000. For two years, we have been cashing out $170M through the platform, consisting in 80 firms backed. From our side, every month we investigate between 200 and 300 investment opportunities to finally end up with 4 or 6 new portfolio companies. With OurCrowd, we really try to transform a closed-doors specific boutique in a massively scalable venture industry. With our platform, you can be one of Facebook’s early investors.
Leaders League. To conclude, a few words on unicorns’ fates?
J. M. People think they will have trouble to perform a successful IPO, but the thing is that they don’t really need IPOs anymore, as they can privately raise money for high valuations. Even the last private investors could get liquidity. As you may notice, NASDAQ just bought SecondMarket for that exact purpose.