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January 15, 2008



Hi Shai, I'm continuing to enjoy this series! What you're saying doesn't seem to bode well for local web startups, the vast majority of which lack any deep tech. Without a technological USP, do you think Israeli web companies have a chance against those in the Valley?


I love this series as well! A couple of comments though (I must :-) )

While I am familiar with the 3 points of course, I believe that in reality they are a bit different.

1. Team - the real definition of a great team is having a founder that has already succeeded once and that has a good past relationship with one of the partners in the VC. If the founder has good industry connections and reputation it also helps. Raising money is 100 times easier for a post exit founder with a clueless idea than for a first time founder with a fantastic team and idea. This criteria helps minimize management risks as well as job security risks.

2. Technology - no matter how you spin it, Israeli VCs look for patents / engineering / breakthrough technology / everything that can survive weak marketing and problematic business models and still be sold to an American giant. This is true with (most) internet companies as well.

3. Business Model / Marketing - Generally Israeli VCs do not present a better understanding of the business environment and how to attack it than the entrepreneurs. Most of my friends in the VCs are very smart, but thy are not marketing people at all. This doesn't mean they are ignorant, not at all, but they often confuse product for marketing. This is very different in American VCs which are much more marketing focused.

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