Israel Venture Capital 2.0

Welcome VMWare, Welcome IAC

The past few weeks have been relatively good for the Israeli VC scene. Companies are being acquired on a weekly basis, showing the quality and the strength of the Israeli startups. We are all used to reading about Israeli acquisitions done by Microsoft (Recent examples include Kidaro and Yadata) or IBM (In fact, IBM has been cleaning the Israeli storage market, acquiring FilesX, Diligent, and XIV). Those companies have been operating in Israel for a long time.

Recently, the acquirer base in Israel had been growing. Just this week, VMWare bought B-Hive (Undisclosed amount) and announced the opening of their Israeli R&D center. Just before that IAC announced their first Israeli acquisition, buying GirlSense (A Pitango company). For Israel this is good news. Making the 1^st acquisition in a new geography is always harder than the second. We have seen many examples of companies that acquire multiple companies after they commit to operate in Israel (Intel, Cisco, IBM, Microsoft, EMC).

Specifically, I am proud to see a growing number of multi-national Internet companies in Israel. When I started this blog, 3 years ago, we had only AOL. Since then, Google, Yahoo, and IAC have all opened offices here, expanding the potential exit for Israeli web companies.

However, it's not all just good news. Israeli companies are continuing to sell early. I am sure B-Hive could have continued to build something larger. Hopefully, we will continue to see great companies acquiring in Israel, but we will also see some great IPOs of long-term, sustainable businesses.

My top 5 “What If” moments in sports history

As I spent the past week at home (with the baby) I had the opportunity to watch the Chelsea-Man united game on ESPN 2. It was a great match, with an unbelievable ending. Chelsea was so close to win, just think… what if John Terry would NOT have slipped. What if…

What is a "what if" sporting event? Some matches in sports are very decisive. When Man United beats Arsenal 4-0, there is no "what if". Man United was the clear winner, and nothing could have changed that. Unlike that, there are many matches that are decided by one small play, one last minute event, leaving the crowd with an amazing thought: "what if" that exact play wouldn't have happened? The best "what if" matches have an impact beyond the actual game. In the case of the case my beloved Patriots (way back in February), the last Giants drive made the difference between an 18-1 season and a 19-0 season.

When I wrote about the Pats game, Guy Horowitz, an ex-Gemini and a good friend commented about his favorite "what if" moments. His comment inspired me to list my own top 5 "what if" moments. I have been "sitting" on this post for over 3 months, but the game on Wednesday gave me an incentive to finally publish. Anyway, I went through a fascinating process to dig out old sporting events, and talk to people about their own "what if" games. To be honest, I can easily mention 40, 50, and even 100 games. But the focus here will remain on MY OWN top 5.

Event	Sports Category	Description	What if…
Michael Jordan shoots the winning basket on Game 6 between the Bulls and the Jazz (1996)	Basketball	On his last championship game (before the second retirement – out of three), with ~20 seconds to go Jordan steels the ball from Karl Malone and a couple of seconds before the end of the game, hits a 20-foot game-winning jump shot. At that time, it was almost certain that this would be his last NBA shot. How appropriate it was that it was the shot that brought him the 6th championship.	What if Jordan hadn't stolen the ball or hadn't made the shot? Would that stain Jordan's winner reputation? What effect would that have on the US market? (No kidding, the Air Jordan shoe is still the highest selling shoe)
Bob Rensenbrink misses the winning goal for Holland during the world cup finals (1978)	Soccer	The Orange dream team of the 70's made it to the finals twice: Germany 74 and Argentina 78. In an amazing game that is tied at 1:1, with 2 minutes left to play, Rensenbrink hits the post, sending the game to overtime. Holland breaks apart, and Argentina wins their 1st ever world cup.	What if Rensenbrink would have scored? Holland would have entered the exclusive club of World Cup champions (instead of Argentina), and would have been the only European team to win the cup outside Europe.
Buffalo misses a last minute field goal, losing the super bowl to the giants	Football	With 10 seconds left on the clock and a 1-point lead for the Giants, Scott Norwood from Buffalo missed a field goal, giving the championship to the Giants. Buffalo lost in their first super bowl appearance. They made it to the super bowl in the next 3 seasons after that, but lost in all their appearances.	What if Norwood would have scored? Buffalo is also the only team to win four consecutive AFC Championships, though they failed to win any of the subsequent Super Bowls. Maybe Norwood's field goal would have been the difference between the best team in history and the worst team in history.
Bill Buckner's Error in the World Series vs. the Mets (1986)	Baseball	The Red Sox faced the Mets in game 6 of the World Series. Boston led the best-of-7 series 3 games to 2. The game was tied at the bottom of the 10th, when Mookie Wilson hit a ground ball to Bill Buckner at first base. The ball rolled under Buckner's glove, through his legs, and into right field, allowing Ray Knight to score the winning run, forcing a seventh game, which the Mets won.	What if Buckner had caught the ball? Could the Red Sox win the championship 18 years before 2004? The reality is that Buckner is the symbol of the Red Sox performance (Curse) till 2004.
Boris Becker almost loses to Joakim Nystrom in the 2nd round of Wimbledon (1985)	Tennis	An unknown kid (17 years old) by the name of Boris Becker played the 7th place player Joakim Nystrom. Nystrom served for the match in the 5th set, but Becker managed to break the serve, and win the last set 9-7, later advancing to win the entire championship	What if Nystrom would have won? Tennis would have lost its youngest Wimbledon champ, and won of its greatest players. I was in London in 1985, and watched the Becker games with high interest. Nystrom would have had a major impact on me…

 

Picking just 5 means that there are many great moments that didn't make the list: Derek Sharp's winner shot for Maccabi Tel-Aviv in 2004, Oscar's last minute header saved by Dino Zoff in Brasil's 3:2 defeat against Italy in 1982, Dave Roberts stealing second base in the bottom of 9^th of Game 4 of the ALCS, reversing the Bambino curse after 86 years, and Ronnie Rosenthal missing a great opportunity for Israel against Columbia in the World cup qualifying match of 1990.

There are many other great moments like these. All bring great memories and inspire great "what if" dreams.

Naomi

Finally, after 9 long months (like always…) our 4^th daughter was born. Her name is Naomi, and I personally think she is great.

Israel 60th Birthday

Today is Yom Ha'atzmaut (יום העצמאות), the Israeli Independence day. Gerald Segal and Izhar Shay (In Hebrew) already wrote about the great Israeli high-tech scene, and its wonderful achievements in the past 15-20 years. I want to focus on the future. With 60 years behind us, Here are 5 things that I am hoping to celebrate 10 years from today, on Israel's 70^th birthday.

1. In Israeli Internet: ICQ was $450M. Shopping.com was $620M. Hopefully we will see $1bn+ Consumer Internet companies emerge out of Israel. I think a good baseline was created in the past few years, with companies like Gigya, 5Min, Metacafe, EyeBlaster, and Supportspace (a Gemini portfolio company).
2. In Israeli Soccer: I am not wishing for World Cup championship. I actually don't mind if WE DON'T make it to South Africa (2010) or Brazil (2014). I hope that in 10 years we will see real soccer in Israel. High quality infrastructure, world standards in athlete education, and based on that, soccer that provides real entertainment, similar to Football in the US, or Soccer in the UK.
3. In Israeli Venture Capital: Israel has attracted a lot of venture money, and has showed some nice returns over the years. In the past few years, more and more US VCs have shown up in Israel, attracting some of the local GPs. I think Israel needs to have a long-term, stand-alone venture capital scene that is not affiliated with the US funds. I 2018 we should be celebrating 28 years of Independent, Israeli based, venture capital
4. In Israeli Education: The global economy is catching up in the high-tech world, and Israel is lacking in engineers. Hopefully, we will be smart enough to increase the overall number of Israeli engineers, while maintaining the current high-quality standards.
5. In Israeli (Green) Transportation: No cars in central Tel-Aviv by 2018. Huge increase in train transportation (7 days a week) by 2018. More Parking by 2018.

On purpose, I left out anything that is related to the Middle East peace process. Instead, check this site out: Goal 2018. Organized by One Voice, they are promoting the idea of a world cup hosted in Israel & Palestine by 2018. I am buying season tickets. See you in 10 years.