According to the IVC, Israel has:
4,563 High-Tech Companies, 166 VC Funds and 34 Incubators
Country PR aside, it’s serious that Israeli VC funds have raised $1.2 billion in 2005, and are projected to raise another $1b in 2006. Therefore, it should not be surprising to see events like KinnerNet conference, pulling in about 150 thinkers and innovators to:
discuss topics and concepts that are of interest
to them,in fields such as Software development, internet culture, site
building, blogs, forums, social networks, chat rooms, instant messages,
P2P, search engines, web services, Wi-Fi, open source, Email,
Infrastructure services, Cellular services, Computer games, Interactive
T.V, VOIP, technological trends, Gadgets, Security and more, to share
their thoughts , work-in-progress, show off the latest tech toys and
hardware hacks, and tackle challenging problems. together we will try
to figure where the internet is going and what are the prevailing
I am jealous as I read Mark, Tom and Loic blog about it. In contrast to the Israeli numbers, the Turkish VC raised in 2005 was $0. In 2006, we expect it to be $0 again. And, we will not have an event like this next year in Istanbul.
A few months ago, on a panel, Yigal Ehrlich had attributed Israel’s VC (and innovation) success to government action – resulting in Yozma. As much as I hate looking towards the government (especially the Turkish government), I suspect early stage VC asset class can only be kick-started with a strong nod from the government.
2 thoughts on “Israel Envy”
Entities like the Small Business Administration (www.sba.gov) or National Venture Capital Association (www.nvca.com) are very active and help spur investments and entrepreneurship in the US (aside from a million other companies/organizations/books/magazines), but here in Turkey it is just beginning to pick up where the notion of private equity or VC investments are fairly recent when you consider that the website of Turkish Venture Capital Assoc. (http://www.turkvca.org) was last updated on 2004. Gasp !
Recently there are some promising signs for Turkish VC Market.
First, Intel Capital recently announced $50m Turkey and Middle East fund. (http://www.intel.com/capital/)
Second, Stowbridge Partners (http://stowbridge.com/) also announced $100m Eurasian InnovationPlus Fund to be mostly invested in Turkey.
I don’t think these funds are really targeting early state ventures and mostly likely they will operate like a small buyout fund by targeting very late stage profitable ventures seeking expansion capital.
So I agree that the outlook for early stage VC activity will be dim for a while.
The early stage investing mostly done by successful former entrepreneurs (been-there and done-that types) and requires different kind of mindset which is quite different that of wall-street financers.
If you look at the bios of prominent early stage VCs like Sequoia or KPCB, you will notice that most of partners are former entrepreneurs.
Unfortunatelly there are very few millionaries in Turkey who made their fortune from high-tech ventures. Once we have enough number of those kind of people, most likely they will invest into what they passioned -creating disruptive companies- and only this can create an ecosystem similar to that of silicon valley.
PS: do we have a chicken-or-egg problem here?