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Venture Capital Policies in Israel

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Author Info
Günseli Baygan ()
Abstract

Israel has a higher level of venture capital as a share of GDP than any OECD country. Most Israeli venture capital is channelled to early-stage companies, particularly start-ups in sectors based on information and communications technology (ICT) and biotechnology. The Israeli venture capital industry was built through government funding, particularly through the YOZMA group, which leveraged financing from foreign corporations and institutions. There is now a need for a change in tactics to maintain private venture funding for both portfolio and seed firms. While new incentives are being given to foreign investors, domestic venture investments could be encouraged through tax breaks, expanded opportunities for institutional investors, and reforms to the Israeli stock exchange. Israel needs to sustain growth in the venture sector while reducing dependence on a limited number of capital sources. This paper analyses trends in Israeli venture capital markets and makes policy ...

Politiques de capital-risque en Israël

La part du capital-risque dans le PIB d’Israël est la plus élevée de toute la zone OCDE. Pour l’essentiel, le capital-risque israélien est dirigé vers des entreprises aux premiers stades de leur existence, en particulier vers les jeunes entreprises opérant dans les technologies de l’information et des communications (TIC) et les biotechnologies. Le secteur israélien du capital-risque s’est constitué grâce à l’effet de levier qu’ont exercé les fonds publics, notamment via le groupe YOZMA, sur les apports émanant d’entreprises et d’institutions étrangères. Il est aujourd’hui nécessaire de changer de tactique pour maintenir les apports de capital-risque privé tant pour les entreprises existantes que pour celles en phase de démarrage. Tandis que les investisseurs étrangers bénéficient de nouvelles incitations, on pourrait utiliser des allègements fiscaux, un accroissement des opportunités offertes aux investisseurs institutionnels et une réforme de la Bourse israélienne pour stimuler ...

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Paper provided by OECD Directorate for Science, Technology and Industry in its series OECD Science, Technology and Industry Working Papers with number 2003/3.

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Date of creation: 28 Jan 2003
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Handle: RePEc:oec:stiaaa:2003/3-en

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