In a bid to support young Israeli startups facing challenges in securing initial capital, the Israel Innovation Authority (IIA) has unveiled an initiative aimed at fostering collaboration among private investors. The IIA has announced a funding call for proposals to establish up to three private investors clubs, also known as angel investors clubs, to serve as platforms for investors to pool resources and provide crucial support to technological ventures in their early stages.
This strategic move goes beyond mere capital injection, as the angel clubs will offer invaluable guidance on legal and financial aspects, aligning with the recently enacted “Angel Law” that incentivizes knowledge-intensive industries. The legislation promises substantial tax benefits for private investors in start-ups, streamlining submissions to the Innovation Authority and facilitating examinations of necessary private funding investments in approved companies.
Three-year support package prize
Winners of the competitive procedure will be awarded a three-year support package for the establishment and operation of their clubs, receiving an annual grant of up to 900,000 NIS, totaling 2.7 million NIS for each winner.
“The Israeli hi-tech industry is the main growth engine of the Israeli economy for the past three decades. As such, it is imperative, even in times of war, to continuously promote and develop this industry at all costs,” said Science and Technology Minister Ofir Akunis. “Government support is needed in order to sustain our leading position at the top of the international hi-tech market.”
While individual angel investors currently dominate the Israeli landscape, the formation of organized angel clubs is a rarity. The initiative aims to address this gap by encouraging the pooling of resources, enhancing investment amounts, increasing the likelihood of success and growth for start-ups, and diversifying exposure to a wider range of companies and sectors.
Dror Bin, CEO of the Israel Innovation Authority, highlighted the need for additional tools to support investments in ventures at their early stages. The initiative complements existing programs, such as emergency aid through the Fast-Track program, and laws encouraging knowledge-intensive industries.
“The Innovation Authority will continue to provide solutions for the hi-tech industry in routine and emergency situations to help entrepreneurs establish and grow groundbreaking companies that will form the backbone of the future of Israeli hi-tech,” he said.