1 / 15

The Government Seed Fund

The Government Seed Fund. January 2006. Background. The Burst of the high-tech Bubble + Security Situation = Fewer Investments Particularly in Start-Ups The Need: Sharing Investor Risk to Encourage Investments and Increase the Number of Start-Up Companies. The seed program.

shay
Download Presentation

The Government Seed Fund

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Government Seed Fund January 2006

  2. Background • The Burst of the high-tech Bubble + Security Situation = Fewer Investments Particularly in Start-Ups • The Need: Sharing Investor Risk to Encourage Investments and Increase the Number of Start-Up Companies

  3. The seed program • An additional and separate vehicle to support new start-up companies. • The Government’s matching investment shares the risk with the investor. • The investor also enjoys the equivalent of a stock option at the opening price

  4. Seed Program (cont.) Funding Source: • VC Fund or Corporation Active in VC or Tech Company Investing in Like Industries • Has the ability and manpower to guide the management of the new company • Has sufficient available funds

  5. Seed Program(cont.) Start-Up Company: • R&D Company in Existence for not more than 6 Months OR Whose Total Expenditures have not Exceeded 1 million NIS (companies in Bio-technology till the pre-clinical stage) • First Round – excluding financing for feasibility study.

  6. Investment Model • Essentially Like VC Investment in the Private Sector. • Ensure that Government and Investor Interests Overlap. • Determine a System that will Yield a Return to the Government for a Successful Investment. • Ensure that the Government will be able to Sell its Holdings to a Third Party.

  7. The Government’s Investment • Up to 5 Million NIS per Company per 2 Year Period that will Finance up to 50% of the Approved Work Program. • The Expenditures Supported will be Those Related to R&D.

  8. The Government’s Investment • The seed fund and the investor will put up matching funds. • Preferred shares will be issued as follows: • Preferred shares ‘A’– Investor • Preferred shares ‘A1’– Seed Fund (nonvoting + no right to appoint directors) • Ordinary shares – Entrepreneurs and workers

  9. The Government’s Investment(cont.) Preferred Shares “A1”: • Liquidation Preference (incl. Merger, Purchase of Shares and Properties). • Dividend Preference • Rights of Conversion to Preferred Shares “A” or ordinary shares. • Full Ratchet Protection Against Dilution of Shares.

  10. The Investor’s Option • The Investor will be given an Option to Purchase the Government Shares Anytime Within the First 7 Years. • Within the first 3 Years the purchase is at cost plus “regular” interest. • For Years 4 till 7 at cost plus “higher” interest.

  11. Privatization The Sale of the Government’s Holdings in the Start-Up Companies does not Entitle any of the investors the right of first refusal if a 60 days notice of sale was given and the investors did not express interest in purchasing the seed fund shares

  12. R&D Law • With reference to transfer of know-how and manufacturing rights, the company will be bound, as are all those enjoying government support by R&D LAW

  13. The approval procedure • The Investor – can apply to be approved even without a specific company he wants to invest in. • The Company - can’t get approval without an approved investor investing in it.

  14. Board Members • Mr. Eli Opper – Chief Scientist, Moital • Mr. Chemi Peres- Managing Director, Pitango • Mr. Shlomo Shalev- Senior VP Investments, Ampal • Mr. Rafi Nevo – CEO, Treatec • Ms. Chana Gad – General Accountant, Moital • Mr. Avi Feldman – Vice Legal Advisor, Moital • Mr. Ran Kiviti – Manager Tmura Fund, Moital

  15. FOR FURTHER INFORMATION Please contact Mr. Itamar Dar Seed Fund manager Email: itamar@ocs.moital.gov.il Tel: 02-6662457 Web: www.moital.gov.il/madan

More Related