by: Jason Weiss
Startups and Giants
Corporate venture capital is a largely untapped resource for Israeli startups, but that is beginning to change. Last week at the new Tel Aviv Stock Exchange, Axis Corporate Edition brought together 16 selected Israeli startups and over 30 leading multinational corporations looking for business partnerships and investment deals. As a founding member of Axis Innovation and a key architect of the event, I can share a few important lessons from the Axis Corporate Edition:
1 - Corporations love Israel: According to the Israeli Ministry of Economics, over 200 of the world’s largest multinational companies have set up shop in Israel. Why?
Take a quick look beneath the surface and it’s not hard to see — Israel has more startups per capita than any other country, more venture capital investments than all of Europe, a thriving entrepreneurial spirit and a passion to think big and change the world. These are just a few reasons why the world’s largest companies — including Microsoft, Mastercard, Oracle, IBM, and many more — are looking for the latest innovations and technological breakthroughs in Israel and came to participate at this vibrant event.
2 - Startups need corporations: Startups need many things to grow, but the three C’s are crucial — capital, connections, and customers. Corporations (another C) can provide them all. While such companies traditionally focus primarily on later stage investment and M&A’s, they are gradually shifting focus on early stage and even seed stage. Companies like Microsoft, AT&T, Citibank, Nielsen, and others have accelerator programs in Israel and demonstrate keen desire to help young entrepreneurs — something unheard of 10 years ago. There are over 1,000 corporate venture arms in the world looking for innovation, and the number active in Israel has doubled over the past two years with predictions for continued high growth.
3 - It’s important to align expectations: Startups often don’t know how to approach big companies and feel daunted by their size and organized structure. By nature, startups are lean and fast-paced, whereas corporations are almost by definition the opposite. Moreover, each corporation has specific interests that may not align with initial expectations. For example, Samsung is looking to invest in many sectors beyond technology, Ford Motor Company is interested in mobile apps, and telecom companies such as Orange have specific programs for helping the startup ecosystem. This is all the more reason why events like Axis Corporate Edition are critical to the startup ecosystem. Both startups and corporations have tremendous value to offer each other, but there is a vacuum of resources to bridge these two ends of the business spectrum. Axis Innovation aims to close this gap by hosting interactive, multinational events and facilitating valuable partnerships.
By Jason Weiss