Israel has famously been called the “Startup Nation” because of its high-tech economy, which rivals Silicon Valley in investment and innovation despite the country’s size. In the midst of this success lies the MIT Enterprise Forum, which established a chapter in Israel in 1994 to further its mission of supporting high-tech entrepreneurial ventures by connecting ideas, technology and people.
The forum has led a wide variety of programs and partnerships since its founding, including the recent establishment of Tsofen, an accelerator and entrepreneurship program specifically for Arab Israeli entrepreneurs.
The forum also hosted a local Challenge Cup competition last month at SOSA (South of Salame), an innovation hub in Tel Aviv. After Challenge Cup, we spoke with Executive Director Ayla Matalon to learn more about the MIT Enterprise Forum and Israel’s startup ecosystem.
What challenges do startups in your ecosystems face?
Israeli companies usually succeed in solving the technological challenges involved in their startups, so the main challenges in our ecosystem are market-related.
The financial challenge in particular is always there. Although many companies succeed in getting funded, many others find it difficult to do so. Even Gil Shwed, founder and CEO of Check Point (now a major multinational cybersecurity firm), had to sell 50% of his shares for $250,000 when starting his company since none of the existing investors understood Check Point’s value proposition.
What facts about your program’s startups stand out most to VC investors or partners?
As part of a joint venture with “Tsofen,” the MIT Enterprise Forum founded a technology entrepreneurship school and accelerator in Kfar Kassem, 20 kilometers east of Tel Aviv.
“We found our entrepreneurs to be far more fluent in the tech entrepreneurship language upon completion of the program.”
One of our entrepreneurs was accepted into an advanced acceleration program focused on leading edge technology, in which he was the only participant not associated with a research body. Another entrepreneur understood his value proposition beyond the initial positioning, and succeeded in getting a generous funding offer. These were remarkable steps forward for them.
How are you working with local government or other businesses in your region?
We’ve had government representatives come to classes and share relevant information regarding a range of opportunities and support programs offered to high-tech entrepreneurs, with an emphasis on special programs supporting Israeli Arab entrepreneurs.
I’m not aware of any startups taking government money at this point, but in some cases people prefer to avoid such investment due to the strings attached.
Challenge Cup Tel Aviv took place on October 2nd. The winner, Hargol FoodTech, is the world’s first commercial grasshopper farm and will represent Israel on the global stage at Challenge Festival.