Speaking on his cell phone as he wound his way from Jerusalem’s leafy Ein Karem neighborhood to the bustling center of town, venture capitalist Isaac Applbaum bubbled over with enthusiasm about the California-Israel Chamber of Commerce’s second venture capital mission to Israel in June.
Applbaum, a partner with Lightspeed Venture Partners and co-chair of this year’s mission is used to toggling between Israel and the Bay Area.
And if this year’s trip is successful, he won’t be the only one. Last year’s trip resulted in at least four funds that invested in Israel.
While some might say, “If you build it they will come,” the California-Israel Chamber of Commerce’s philosophy seems to be, “If you bring them, they will build.”
Under the aegis of this San Jose-based group, a delegation representing 25 U.S. venture capital firms and private equity funds spent four action-packed days recently in Israel exploring investment opportunities and connecting with Israel’s venture capital community.
The second annual mission was sponsored by Lightspeed Venture Partners, Ernst & Young, Silicon Valley Bank, and the law firm of Pillsbury, Winthrop, Shaw and Pittman.
According to Shuly Galili, the executive director of the California-Israel Chamber of Commerce, the total capital under management is $15 billion.
Among the delegates — both Jewish and those of other faith and cultural backgrounds — 70 percent counted this recent trip as their first time in Israel.
“People were blown away by the people,” said Applbaum. “The group met with dozens of Israelis from different walks of life. People were amazed by the enthusiasm and dedication to what they do.”
As the delegates crisscrossed the country they met with dignitaries such as Ehud Olmert,Israel’s minister of trade and labor, Vice Premier Shimon Peres and Daniel Kurtzner, the U.S. ambassador to Israel.
But more importantly, delegates met face to face with leaders in Israel’s business community, learning how closely the two communities mirror each other.
“If you read in the newspapers about what is happening in Israel, you would never want to come here,” Applbaum said. But after spending time in the country, “All of a sudden you realize this is the greatest country in the world. Israel is a great place to invest. Israelis rarely fail. They figure out the answers and they get the job done.”
It is not a coincidence that after the United States and Canada, Israel has the most companies traded on the NASDAQ, said Galili.
For starters, the business infrastructure bears little resemblance to the United States. The accounting and legal systems are transparent, said Galili. There are checks and balances. “Investing is very safe and beneficial,” she said.
What’s more, with a plethora of Silicon Valley-based companies having branches in Israel — and vice versa — “the two areas may as well be twins separated at birth,” Galili said.
“Many entrepreneurs in Israel … brought with them the discipline, the culture the management skills that investors really like to see,” said Josef Friedman, a delegate on the trip representing Storm Ventures, a venture capital firm in Menlo Park.
While Storm Ventures has not made an investment in Israel, Friedman says it is likely to do so in the coming year.
Business and technology in Israel has come of age. While Israel was producing technology 20 years ago, today it is combining technical expertise with business acumen.
“Unlike 15 to 20 years ago, the entrepreneurs are repeat entrepreneurs. They’ve been successful. It’s no longer just about technology,” said Applbaum. “It is also about people that are much more experienced in terms of the management structure in these companies.”
“Israel continues to develop some of the best technologies that I have seen,” said Friedman. “And they’ll continue to develop high-end products — not only technology but also life-science in terms of medical devices, diagnostic and imaging, drug discovery and drug delivery … I think Israel will continue to play a major role as the world becomes a global village.”