ENTERPRENEURS and The Israeli Venture Capital Industry Orna Berry, Ph.D. Chairperson IVA Israel Vent

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ENTERPRENEURSand The Israeli Venture Capital
IndustryOrna Berry, Ph.D.Chairperson IVA -
Israel Venture AssociationVenture Partner,
Gemini Israel Funds
December 2007
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Summary lets start from the end

• Israel High-tech track record is excellent
  compared to any other market
• Circumstances make Israelis top notch problem
  solvers
• Innovation exceeds capacity to operate on
  locally, leading to global alliances
• India and China represent a great opportunity for
  the Israeli HT more than competition
• Future results are expected to be even better due
  to maturity of the market
• Israels investment sectors are evolving as
  markets and technologies change

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Larry Ellison in a recent visit to Israel

• The Israeli high tech industry has become a
  huge success, with a large amount of IPOs, second
  only to the US, and high levels of innovation
• Larry Ellison, Oracle, 10 August 2007

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Globally used Israeli made Technology
You are Using Israeli Developed Products Every Day

• Pentium (Intel)
• Centrino (Intel)
• Mobile Telephony (DSPC/TI)
• Telecom Billing(Amdocs)
• Call Center Logging (Nice/Verint)
• Voice Mail (Comverse)
• Instant Messaging (ICQ, Ubique)
• PC Board Inspection (Orbotech)
• VoIP(Vocaltec/AudioCodes)

• Generic Drugs (Teva)
• Agriculture (Netafim)
• Stents (Medinol)
• Firewalls (Check Point)
• SW Performance (Mercury)
• Chip Metrology (Applied Materials KLA-Tencor)
• Anti-Virus (Aladdin, Commtouch)
• Regeneration of Spinal Cord Cells (Proneuron)
• Flash Memory (msystems, Saifun)

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Global Companies Operating in Israel
It starts locally!

• Israel has one of the greatest concentrations of
  technology world leaders
• Most of them have established commercial RD
  centers in Israel

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Favorable Regulatory Environment

• Strict international standards protection of
  trademarks, patents and intellectual property of
  all kinds
• Flexible Labor Market
• Investor friendly
• Comprehensive legal protection of foreign
  companies
• An advanced banking and financial sector
• Favorable tax treatment for foreign investors
• Active Support Policy
• Worldwide taxation treaties and free trade
  agreements
• Office of the Chief Scientist - shares up to 50
  of RD expenses Binational RD funds with many
  countries
• Technological incubators

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Respected by Investor Community

• Successful in NASDAQ offerings over the years

Source IVC, Venture One
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Israel is the third largest VC State
Capital Raised by High Tech Companies, Israel
US (M)
Source IVC, Venture One
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Israel is the Largest European VC Country
Capital Raised by High Tech Companies, Israel vs.
Europe (M)
Source IVC, Venture One
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Some of Israels Star Companies
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Has Become a Mature and Experienced Industry

• From practically no VCs in 1992 to gt 1B industry
  today

MA Transactions 1994-2006
Source IVC
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Israel is itself an exercise in entrepreneurialism

• Source of New Tech Innovation
• Highest ratio of PhDs per capita
• Military training technologies as strong
  starting point
• Global RD center for key international
  technology players
• Well Established Venture Market
• Equal in size to greater Boston
• Emergence of Serial entrepreneurs
• gt 1,200 Venture backed companies
• gt 100 NASDAQ IPOs
• Change in the entrepreneurial culture build big
  Israeli companies
• Multinational DNA from day one
• Different go to market Go global
• Cultural understanding and access to markets

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A new generation of Israeli Tech Industry

• Israels High-tech industry has matured
• Experienced venture teams
• Returning entrepreneurs and entrepreneurial
  talent
• Virtuous Cycle previous generations build
  future
• Competitive businesses built around disruptive
  technologies
• Entrepreneurs aim much higher
• Have proven past success
• Know what it takes to build a multinational
  organization
• Will not stop half way to building a
  multi-billion dollar company
• Developed senior management and internationally
  experienced talents

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• APPENDIX

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Global Investors Think About Israel

• There are, today, still only three cities
  where the early stage, high technology,
  entrepreneurial process is really proven
  Silicon Valley, Route 128 and Israel
• The Israeli high tech community is already
  well skilled and well integrated into the global
  high tech arena. Legal, tax, accounting,
  government policy
• Clinton P. Harris, Grove Street Advisors, June
  15, 2005

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Global Investors Think About Israel

• Thanks to quality education, Israel is one of
  the most advanced countries in the world. Israel
  is advancing in high-tech even more than other
  developed countries. Bill Gates, Chairman,
  Microsoft Corporation
• If you liked investing in Israel in the late
  1990s, youve got to love it today- Same talent.
  Same opportunity. Better prices. Stanley Gold,
  Director, Walt Disney Company, CEO, Shamrock
  Holdings
• Israel is in a better position now than it was
  in the tech boom as IT company valuations are
  more closely tied to fundamentals, the country is
  less dependent on U.S. venture money, and it has
  a wider range of tech strengths. Red Herring
  Magazine June 2006

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Annual Conference 2008 May 19-20

• Fostering innovation requires long term planning
  in the following
• Promoting science and technology education
• Increase in RD budget
• Connecting universities research works with
  industry
• Encourage Israeli Institutional Organizations to
  invest in sciences and technology via investment
  in VCs
• Continuously improve
• Education
• Research
• Commercialization
• Financial environment
• Global competition