1. TRANSFERENCIA DE
TECNOLOXIA E FOMENTO DO
EMPRENDEMENTO
BIOTECNOLOGICO EN ISRAEL
© Kerentech SL
1

2. OFFICE OF THE ISRAEL CHIEF
SCIENTIST PROGRAMS
Generic
Technologies
Applied
Research
Magnet
Nofar
Magneton
Kamin
Pre-Seed
Tnufa
EarlyStage
Seed
Technological
Incubators
Program
Early-Stage
Fund
Growth
R&D
Fund
Bi-National & Multinational
Funds and agreements
2

3. GOVERNMENT INVOLVEMENT
The Technological Incubators
Program is a government response
to a market failure.
Warning!!! High Risk
Too Innovative
• Market Failure
–
Early stage, high risk, innovative technological companies, can not raise money from the private
sector.
• Government Response
–
Bridging the gap through the Technological Incubators Program
3

4. INCUBATOR’S GOAL
Technological Incubators are today private
companies for profit
Main goal: Developing innovative
technological ideas into start-ups
and leading them towards first round
investment.
4

5. Appropriate
facilities and
infra-structure
for R&D
Inter-tenant
synergism
Connections to
potential
customers,
partners and
investors
Financing
WHAT DOES AN INCUBATOR
OFFER TO ENTREPRENEURS?
Central
administrative
services
Professional &
Business
guidance
Management &
Technical
assistance
5

6. GOVERNMENT SUPPORT
• Average budget of project: $500K
– Government grant: 85% of budget
– Incubator’s investment: 15% of budget
• Payback: 3% royalties from revenue
• Incubator Term: 2-3 years
• Extended support to Biotech/Pharma & CleanTech projects (budget, optional 3rd year)
• Extended support for projects initiated in
peripheral regions
• Annual Government Budget to the Program:
~$50M
6

7. THE INCUBATORS FRANCHISE
MODEL
• Franchise Term: 8 years with performance
based milestones
• Tender: 1 year before Franchise end date
7

8. INCUBATOR APPROVAL PROCESS
• License Tender Publication
• Q&A
• Application Submittal
• Applications Review
• Applications Assessment
• Incubators Committee Decision
• Initiation
8

9. LICENSEE BENEFITS
• 8 Years license
• Low risk (majority of risk absorbed by the
government)
• Incentives (up to 50% shares in every
company for a 15% investment)
• Grant payback by the companies in case
of success and revenue generation only
• Certainty, Flexibility
9

10. PROJECT CRITERIA
Innovation
&
Uniqueness
Early Stage,
High Risk
Significant
Market
Potential
IP
Protection
Leading
Team
Feasibility
in meeting
significant
milestone
10

11. PROJECT APPROVAL PROCESS
Approaching
an Incubator
Incubator
Evaluation &
Approval (1%3%)
Submittal to
OCS
OCS
Evaluation &
Approval
(80%)
Project
Initiation
11

12. PROGRAM OBJECTIVES
• Primary Objective
– Creating new startup companies that would not start otherwise
• Secondary Objectives
–
–
–
–
Transferring technology from research institutes into the industry
Creating industrial R&D activity in peripheral regions
Providing deal flow for the venture capital industry
Creating technological entrepreneurial culture
12

13. Program Milestones
• 1991: Establishment of program
• 2002: Initiating the Privatization Process
• 2005: Establishing a designated biotech incubator
in Jerusalem
• 2008: Establishing 2 technology based industrial
incubators in Haifa and Arad
• 2010: End of Privatization Process
• 2011: Reforms in the basic models of the
Incubators Program
• 2012: Implementation of the tendering process for
selecting new licensees
13

14. Volume of Operation
• Incubators
– 22 Technological Incubators
– 1 Biotech Incubator
– 1 Technology based Industrial Incubator
• Incubated Companies
– Approximately 70 – 80 new startup companies every year
– ~175 startup companies operating at any given time, ~90%
successfully complete the incubator term
14

15. INCUBATORS NETWORK
Gush Segev
Haifa
Nazareth
Caesarea
Netanya
Tel Aviv
Yoq’neam
Ariel
Ashdod
Jerusalem
Ashqelon
Gush Ezion
Beersheba
15

16. FIELDS OF ACTIVITY |INCUBATED COMPANIES 2012
Others, 3%
ICT, 32%
Clean-Tech,
15%
Medical
Device, 42%
Bio-Pharma,
8%
16

17. GOVERNMENT FUNDING VS PRIVATE INVESTMENTS | 1991 2012
Government Funding
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
3,750,000
3,500,000
3,250,000
3,000,000
2,750,000
2,500,000
2,250,000
2,000,000
1,750,000
1,500,000
1,250,000
1,000,000
750,000
500,000
250,000
0
Private Investments
17

18. HIGHLIGHTS
•
•
•
•
•
•
The incubators program is the primary “Manufacturer”
of start-ups in Israel
The incubators program is the only opportunity for
early-stage, high-risk innovative projects that are not
yet able to raise money from the private sector
The incubators program is an important source of
deal-flow for the venture capital industry
The incubators program is especially important in times of
economic crisis
The incubators program has a significant impact on the lifescience industry in Israel
The incubators program has a crucial role in developing an
entrepreneurship culture in Israel
18

19. WORLD INNOVATION CLUSTERS
London
Paris
Silicon
Valley
Skolkovo
Boston
Beijing
Israel
Bangalore
Source: MIT Technology Review
19

20. SILICON VALLEY
*
• Venture Capital : $11.2 billion
• Top Companies: Google, Apple
• Key Facts:
– 64% Foreign Workers
– 17 IPOs in 2012
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
20

21. BOSTON
*
• Venture Capital : $3.6 billion
• Top companies: Akamai, Genzyme
• Key facts:
– Most US biomedical funding
– 85 Colleges and Universities
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
21

22. TECHCITY LONDON
*
• Venture Capital: $161 million
• Top CompaniesL Techstars Last.fm
• Key facts:
– Startup initiative created in 2010
– 140 Technology companies
– Tax breaks for private investors
•
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
Government Cluster
22

23. PARIS SACLAY
• Government Funding: $3.25 billion
• Top Companies: EADS, Siemens
• Key Facts:
– Construction began in 2013
– Two-square-kilometer campus
– Merging Six engineering schools
•
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
Government Cluster
23

24. ISRAEL
*
• Venture Capital: $1 billion
• Top Companies: Waze, Teva
• Key facts:
– 230000 high-tech workers
– Compulsory military training
– $25 billion in technology exports
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
24

25. SKOLKOVO INNOVATION CITY
*
• Government funding: $2.5 billion
• Top Companies: IBM, Rusnano
• Key Facts:
– Founded in 2010
– 3.64 square kilometer innovation center
– University designed by MIT
•
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
Government Cluster
25

26. BANGALORE
*
• Venture Capital: $300 million
• Top Companies: Infosys, Wipro
• Key Facts:
– Internet users up 26% per year
– $3876 per capita income ( India)
– Over 10.000 local milionaires
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
26

27. BEIJING
*
• Venture Capital: $1.4 billion
• Top companies : Baidu, Lenovo
• Key facts:
– 70 Colleges and Universities
– 30% of China’s Venture Funding
– 14.5 million Internet users
•
•
•
•
Strong IP Protection ©
Good weather ☼
Liberal immigration laws m
Entrepreneurial Culture A
27

28. Bangalore
Beijing
GF(M)
$2500
VC(M)
$300
VC(M)
$1400
Waze,
Teva
IBM,
Rusnano
Infosys
Wipro
Baidu,
Lenovo
-230000
high-tech
workers
-Compulsory
military
training
-$25 billion in
tech. exports
-Founded
2010
-3.46 km2
campus
-University
designed by
MIT
Internet
users:Δ=26%
$3876 p.c.
income/y
Over
10000local
millionaires
70 colleges
and
Universities
30% China
VC funding
14.5M
internet users
Sillicon
Valley
Boston
TechCity Paris
London Saclay
Israel
Skolkovo
VC (M)
$11200
VC (M)
$3600
VC (M)
$161
VC(M)
$1000
Google,
Apple
Akamai,
Genzyme
Techstars EADS,
Last.fm
Siemens
-64%
Foreign
workers
-17 IPOs
in 2012
-Most US
Biomed
funding
-85
Colleges &
Universities
- Startup
initiative
created in
2010
-140 tech Cos.
-Tax breaks
for private
investors
GF(M)
$3250
Construction:
2013
- 2km2
campus
- Merging 6
engineering
schools
Innovation
City
© ☼m A © ☼m A © ☼m A © ☼m A © ☼m A © ☼m A © ☼m A © ☼m A
VC= Venture Capital; GF= Government Funds
*
28

29. CONTACT
19 Ha Lamed Hey
93661 Jerusalem
Israel
Muntaner 200 atico
08036 Barcelona
Spain
info@kerentech.com
www.kerentech.com
29