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Maayan Ventures The Leading Incubator in Israel March, 2012 PowerPoint PPT Presentation


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Maayan Ventures The Leading Incubator in Israel March, 2012. The Motivation. The initial motivation for establishing the incubators by the Israeli government: Encouraging growth of certain industries, developing high-tech industries

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Maayan Ventures The Leading Incubator in Israel March, 2012

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Maayan Ventures

The Leading Incubator in Israel

March, 2012


The Motivation

The initial motivation for establishing the incubators

by the Israeli government:

  • Encouraging growth of certain industries, developing high-tech industries

  • Decreasing dependency of certain areas in one industry (such as: automotive, steel, defense)

  • Increasing activities in “weak” sectors – poor population, development areas

  • Increasing cooperation between the Academia / Research Inst. and the industry – commercializing new technologies

  • Creating new employment opportunities, especially for new immigrants

  • The two main reasons for business failure of new start-ups are lack of managerial experience and funding problems. The incubators professionalize in these areas.


The Business Model

  • The main principle: leveraging government money for early stage venture capital investments.

  • Basic funding for each new company: $600K:

    • ~$500K (85%) is given by the OCS as a non-recourse loan that is returned from future earnings.

    • ~$100K (15%) is invested as equity by Maayan Ventures.

  • Maayan Ventures receives 40% of the company.

OCS

Maayan Ventures

85% - Non-Recourse Loan

15% - Equity

Portfolio Company


PRIVATIZATION (2002)

Technological Incubators in Israel

  • Established by the government in 1991

  • Overseen by the Office of the Chief Scientist of Israel’s Ministry of Industry and Trade

  • After 7-8 years, became a government investment channel, and a decline commenced:

    • Economic depression, burst of the high-tech bubble

    • Regarded as “heavy” and bureaucratic government institutions

    • High failure rates of graduate companies


The Current Situation

  • 24 active technological incubators

  • 15 of them operate in peripheral areas

  • 23 are privatized

  • More than 200 companies / start-ups operate in the various incubators (at least 100 of them are new)

  • The total incubators budget during 2010 – 177M NIS

  • Since 1993 until today – more than 1200 companies graduated from the incubators

  • In 2010 there were 57 graduates – 68% of them managed to raise additional funds


Maayan Ventures

  • The largest early stage investment company in Israel

  • Two “incubators” franchises from the Office of the Chief Scientist of the State of Israel (OCS) enabling leverage of government funds

  • Over 30 portfolio companies in three main fields: Software, Medical Devices and Materials

Rotem Ventures

Industry and Materials

Maayan Ventures

Medical Devices

Iris Ventures

Software and IT


The Business Model

  • The main principle: leveraging government money for early stage venture capital investments.

  • Basic funding for each new company: $600K:

    • ~$500K (85%) is given by the OCS as a non-recourse loan that is returned from future earnings.

    • ~$100K (15%) is invested as equity by Maayan Ventures.

  • Maayan Ventures receives 40% of the company.

OCS

Maayan Ventures

85% - Non-Recourse Loan

15% - Equity

Portfolio Company


Typical Investment Cycle

48

Maayan’s Holdings

20%<Maayan<40%

M&A or EXIT

36

Reality Check

Maayan invests only with lead third party

Series B

End of Incubator Period

24

Series A

18

15% Supplementary Funding by Maayan

85% Government Grant

Seed Stage

Maayan > 40%

0

Months

What do we do to get there?


1st Stage: Selecting The Right Companies

Deal Flow Sources:

Refer a friend

Leading funds

Tech transfer orgs

Patent attorneys

Maayan’s investors

Due Diligence

Technological

Innovation

Entrepreneurs

Legal

Financial

  • Internal Inv Comm

  • Leading professionals

  • Expert opinions from the field

  • Examining worthiness of investment

Appointed examiner

On behalf of the

OCS –

Government

screening

Process

Incubatur

Over 400

Opportunities

per year

Initial

Screening

Internal

Investment

Committee

OCS

Committee

5-10 companies enter the incubator every year


2nd Stage: Providing Added Value

  • Close Accompaniment

  • Recruitment of Key Executives

  • Financial Backing

  • Business Development

  • Strategic Consulting

  • Administration Backing

  • Legal Services

  • Coaching

Company

Entering Maayan Incubator


3rd Stage: Opening The Market

  • Door Opening

  • Exposure to Market

  • Connections with Relevant Players

  • Exposure to Strategic Partners

  • Leading Negotiation with M&A Partners

  • Legal and Financial Advice

  • Bringing Additional Investors


Strategy

  • Rich, balanced, high-quality portfolio

  • Focus on three market segments

  • Value creation while creating exits along the way

  • Deep involvement in portfolio companies

  • High-quality, professional and dedicated management

  • Low operational costs

  • Maintenance of high equity stake in key portfolio companies

  • Leverage of the connection with IDB and Infinity China

  • Social awareness - promotion of the Negev


Portfolio – Communications & IT


Portfolio – Medical Devices


Portfolio – Materials & Industrial Eq.


Key Portfolio Companies

Industrial/Material

Medical Devices

Software/IT

37%

43%

34%

Aespira

Breathing New Life Into Healthcare

42%

35%

46%

46%

29%

48%

21%

Major Holdings in Leading Companies


Gizmox

  • Gizmox has developed a unique transposition technology for complex enterprise software applications from client server architecture to new architecture of cloud/web/mobile/HTML5

  • The company had completed the development for Microsoft Applications and is now developing its JAVA based solution

  • Team:

    • Navot Peled- Founder, CEO- vast experience in product marketing

    • Guy Peled- Founder, CTO- vast development experience in MS architecture

    • Itzik Shpizen- VP R&D

    • Doron Libstein- Chairman- Over 15 years at MS, founder of MSN Israel and Head of MS Europe

    • Major Achievements

  • Convertible loan and strategic agreement of $2.5m with Citrix

  • Two major agreements with Microsoft

  • The company is currently in advanced negotiation with a number of potential clients in the financial sector and others for applications transpositioning projects based on Gizmox technology


B-Nano

  • B-Nano is revolutionizing the microscope world - has introduced the first electronic microscope to operate in atmospheric pressure. This development has tremendous implications in the medical and metrology fields

  • Team

    • Dubi Shachal, Founder- Dr. of Chemical Physics from Weizman institute, Held senior management positions at Applied Materials as system engineer, development manager, and product manager of an over $1b revenues product

    • Rafi De Pichoto- Chief Physician, Dr. of Physics from Weizman Institute, over 10 years of research experience at Bell Labs in the US.

    • Major Achievements:

  • The company has signed a $4.4m NRE agreement with a Korean Company

  • Sales agreements with additional Korean companies as well as interest from international semiconductor companies

  • Entrance to the labs market by installations at major labs across the globe, specializing in life sciences and nano technology


  • The company is revolutionizing the hair transplant field- moving from the operation room to a Botox like procedure

  • There are over a billion people globally suffering from balding. The potential is huge, but has not materialized commercially with existing procedures due to high costs and poor results

  • Hair Esthetics offers a revolutionary procedure for “hair injection” which will enable every balding person to enjoy great results for low cost

  • Hair Esthetics is the first company to offer a multiple hair implementation procedure enabling the transplanting of a group of hair versus single hair line in a click of a button, making it the lowest cost, fastest, easiest procedure on the market.

  • The company has received a lot of interest from strategic partners and leading investment institutions:

    • Approval for clinical trials/ completion of clinical prototypes

    • Signed a TS after reviewing several from a leading investment fund at an up round valuation

    • Interest expressed from strategic partners such as AmorePacific (Korean Giant)

  • The Vision: Hair Esthetics will revolutionize hair transplant in the same way Botox has revolutionized wrinkles removal


Thank You


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