What are the steps leading hatching a project?
First of all, you have to develop a business plan. In the business plan you have to explain the technology, you have to explain what is the forecast for such a product if you will be successul in developing the technology. What is the market, you have to bring the background of the developers, of the team. And the team should be a mix of people. One should be the manager, one should be the chief developer, anotherone have take care of the financing an so one. So first step is business plan, because otherwise you cannot raise money, after this you have to apply with this business plan to the chief scientists o to another benchor capital and if you get the go one, you can start. It takes from 2 to 5 years to develop a new technology or a new product, and then you have to start design the way that you are going to marking it. You have to raise money during the process. So this are the steps that you have to take.
How can investors profit?
This really depends on the success. Sometimes you will lose money, sometimes you make a lot of money. And I will give you an example, the guys of Checkpoint when they started the company, they went to a lawyer, to register the company, to get the formalities, and the lawyer told them “you know, we will provide you the services, we don’t want money. Give us 2% of your earnings” and when they went public, that 2% was 40 million dollars.The angel that invested 350000 dollars when they started, they went to an angel and they told him “give us money”, he gave them 350000, and when they were public, he earn 350 million dollars and he became today in the leaders of venture capital, because he gave 350 and he started to invest in otherones. So the dream is, you know, big. If you succeed, every day you have another company that is selling 300 million, 400 million, 200 million, and the big guys maybe 4 billion, 3 billion. Really depends on the idea
What is the process of selecting the best idea?
This is difficult, first of all it depends in what area you are going to develop the solution. And you have to understand that the solution is really needed in the market, if it is needed, you go and you start to develop it. Now during the development you have to start and to design o plan the way that you are going to market it and to check the feedback that you are getting from the market. And if the feedback is ok and if you are really finishing the project, then the best way is to finding strategic partners. That means, if I’m in the banking business I should find somebody that is expertise to market the bank industry, if I’m in the ensurance, find the best estrategic marketing in ensurance. There is another way like Checkpoint, they build branches and they put people in charge there. So there are many ways to build the marketing system in order to have a success story after the R&D was succesfully fitched.
What is the warranty for an investigator that his idea was not stolen and an investor that his money is safe?
The idea is protected as I said, by a patent. This is the only one way. But when youre dealing with people, you have to ask them to sign a non disclosure agreement (NDA) so whatever they know from you is protected. They can’t do anything with it o give it to others. The investor is not protected, there is a risk. This is the reason we call the venture capital company risk money, risk business. Because you invest in things that you are not sure that the result will be positive, but this is the only way to lift the industry. However the venture capital companies, are investing in many projects in the same time, and it will get 20% or 25% out of the amount of companies that are investing, it can be a hudge success story. Because you may invest in ten, ten million dollars; but one can bring you 3 billion dollars. So forget about the nine, i don’t care about the other nine. And this is the reason why this culture of venture capital is today all around the world, because you’re splitting the risk in many different projects.
What is considered the most important factor for the system, entrepreneurship or innovation?
Both of them, the most important thing is to see the team, understand the characteristic of the team. To understand the background of the people, to understand if they are really dreamers and they are dedicated to it or not. And of course, you need also an idea that is really needed in the market, that is really something different. So what I like always to explain in a very pictural way. Today the world in many ways is a jungle, and the jungle is green. If in Guatemala you have a lot of green and a lot of forest if I ask you from the distance “name me the name of the tree” and you say “mmm everithing is green I don’t know”, but if you bring a blue tree to the green jungle everybody will recognize it and see it because it’s different. So I say that we have to bring blue trees to the green jungle. If you bring blue trees to the green jungle, you will be successfull.
Does the government helps creating laws?
Yes. You know Israel is a very poor country when we are speaking about natural resources. We don’t have anything. You know that God promise Moses that Abraham that they are going to live in the country of milk and honey. So milk we have and honey, but no oil, no copper, nothing. We have only one thing, the human resources, the brain works between the two ears, and we have to use it in the best way. So it is natural resource you can do what Israel became, that we are leaders in the world. So the government recognized it and they make a lot of laws, regulations to promote it. And always you criticize the government but when we are comming to see what they are done in order to promote this industry we have to render to our government.