TRANSFERENCIA DE

TECNOLOXIA E FOMENTO DO

EMPRENDEMENTO

BIOTECNOLOGICO EN ISRAEL

© Kerentech SL

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OFFICE OF THE ISRAEL CHIEF

SCIENTIST PROGRAMS

Generic Technologies

Magnet

Magneton

Applied Research

Nofar

Kamin

Pre-Seed

Tnufa

Seed

Technological Incubators Program

Early-Stage

Early-Stage Fund

Growth

R&D Fund

Bi-National & Multinational Funds and agreements

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GOVERNMENT INVOLVEMENT

The Technological Incubators

Program is a government response

to a market failure.

• Market Failure – Early stage, high risk, innovative technological companies, can not raise money from the private

sector.

• Government Response – Bridging the gap through the Technological Incubators Program

Warning!!! High Risk

Too Innovative

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INCUBATOR’S GOAL

Technological Incubators are today private

companies for profit

Main goal: Developing innovative

technological ideas into start-ups

and leading them towards first round

investment.

4

Appropriate facilities and

infra-structure for R&D

Financing

Central administrative

services

Management & Technical

assistance

Professional & Business guidance

Connections to potential

customers, partners and

investors

Inter-tenant synergism

WHAT DOES AN INCUBATOR

OFFER TO ENTREPRENEURS?

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GOVERNMENT SUPPORT

• Average budget of project: $500K – Government grant: 85% of budget

– Incubator’s investment: 15% of budget

• Payback: 3% royalties from revenue

• Incubator Term: 2-3 years

• Extended support to Biotech/Pharma & Clean-Tech projects (budget, optional 3rd year)

• Extended support for projects initiated in peripheral regions

• Annual Government Budget to the Program: ~$50M

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THE INCUBATORS FRANCHISE

MODEL • Franchise Term: 8 years with performance

based milestones

• Tender: 1 year before Franchise end date

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INCUBATOR APPROVAL PROCESS

• License Tender Publication

• Q & A

• Application Submittal

• Applications Review

• Applications Assessment

• Incubators Committee Decision

• Initiation

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LICENSEE BENEFITS

• 8 Years license

• Low risk (majority of risk absorbed by the

government)

• Incentives (up to 50% shares in every

company for a 15% investment)

• Grant payback by the companies in case

of success and revenue generation only

• Certainty, Flexibility

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Innovation &

Uniqueness

Early Stage, High Risk

Significant Market

Potential

IP Protection

Leading Team

Feasibility in meeting significant milestone

PROJECT CRITERIA

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PROJECT APPROVAL PROCESS

Approaching an Incubator

Incubator Evaluation &

Approval (1%-3%)

Submittal to OCS

OCS Evaluation &

Approval (80%)

Project Initiation

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PROGRAM OBJECTIVES

• Primary Objective – Creating new startup companies that would not start otherwise

• Secondary Objectives – Transferring technology from research institutes into the industry

– Creating industrial R&D activity in peripheral regions

– Providing deal flow for the venture capital industry

– Creating technological entrepreneurial culture

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Program Milestones

• 1991: Establishment of program

• 2002: Initiating the Privatization Process

• 2005: Establishing a designated biotech incubator in Jerusalem

• 2008: Establishing 2 technology based industrial incubators in Haifa and Arad

• 2010: End of Privatization Process

• 2011: Reforms in the basic models of the Incubators Program

• 2012: Implementation of the tendering process for selecting new licensees

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Volume of Operation

• Incubators – 22 Technological Incubators

– 1 Biotech Incubator

– 1 Technology based Industrial Incubator

• Incubated Companies – Approximately 70 – 80 new startup companies every year

– ~175 startup companies operating at any given time, ~90%

successfully complete the incubator term

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INCUBATORS NETWORK

Beersheba

Ashqelon

Ashdod

Tel Aviv

Netanya

Caesarea

Haifa

Ariel

Jerusalem

Gush Ezion

Yoq’neam

Gush Segev

Nazareth

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FIELDS OF ACTIVITY |INCUBATED COMPANIES 2012

Medical Device, 42%

Bio-Pharma, 8%

Clean-Tech, 15%

ICT, 32%

Others, 3%

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GOVERNMENT FUNDING VS PRIVATE INVESTMENTS | 1991 -

2012

0250,000500,000750,000

1,000,0001,250,0001,500,0001,750,0002,000,0002,250,0002,500,0002,750,0003,000,0003,250,0003,500,0003,750,000

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Government Funding Private Investments

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HIGHLIGHTS

• The incubators program is the primary “Manufacturer”

of start-ups in Israel

• The incubators program is the only opportunity for

early-stage, high-risk innovative projects that are not

yet able to raise money from the private sector

• The incubators program is an important source of

deal-flow for the venture capital industry

• The incubators program is especially important in times of economic crisis

• The incubators program has a significant impact on the life-science industry in Israel

• The incubators program has a crucial role in developing an entrepreneurship culture in Israel

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Silicon

Valley

Boston

London

Paris Skolkovo

Israel

Bangalore

Beijing

Source: MIT Technology Review

WORLD INNOVATION CLUSTERS

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SILICON VALLEY

• Venture Capital : $11.2 billion

• Top Companies: Google, Apple

• Key Facts:

– 64% Foreign Workers

– 17 IPOs in 2012

• Strong IP Protection ©

• Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A

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BOSTON

• Venture Capital : $3.6 billion

• Top companies: Akamai, Genzyme

• Key facts:

– Most US biomedical funding

– 85 Colleges and Universities

• Strong IP Protection ©

• Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A

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TECHCITY LONDON

• Venture Capital: $161 million

• Top CompaniesL Techstars Last.fm

• Key facts: – Startup initiative created in 2010

– 140 Technology companies

– Tax breaks for private investors

• Strong IP Protection © • Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A

• Government Cluster

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PARIS SACLAY

• Government Funding: $3.25 billion

• Top Companies: EADS, Siemens

• Key Facts: – Construction began in 2013

– Two-square-kilometer campus

– Merging Six engineering schools

• Strong IP Protection © • Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A • Government Cluster

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ISRAEL

• Venture Capital: $1 billion

• Top Companies: Waze, Teva

• Key facts: – 230000 high-tech workers

– Compulsory military training

– $25 billion in technology exports

• Strong IP Protection © • Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A

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SKOLKOVO INNOVATION CITY

• Government funding: $2.5 billion

• Top Companies: IBM, Rusnano

• Key Facts: – Founded in 2010

– 3.64 square kilometer innovation center

– University designed by MIT

• Strong IP Protection © • Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A

• Government Cluster

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BANGALORE

• Venture Capital: $300 million

• Top Companies: Infosys, Wipro

• Key Facts: – Internet users up 26% per year

– $3876 per capita income ( India)

– Over 10.000 local milionaires

• Strong IP Protection © • Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A

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BEIJING

• Venture Capital: $1.4 billion

• Top companies : Baidu, Lenovo

• Key facts: – 70 Colleges and Universities

– 30% of China’s Venture Funding

– 14.5 million Internet users

• Strong IP Protection © • Good weather ☼

• Liberal immigration laws m

• Entrepreneurial Culture A

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Sillicon

Valley

Boston TechCity

London Paris

Saclay

Israel Skolkovo Innovation

City

Bangalore Beijing

VC (M)

$11200

VC (M)

$3600

VC (M)

$161 GF(M)

$3250

VC(M)

$1000

GF(M)

$2500

VC(M)

$300

VC(M)

$1400

Google,

Apple

Akamai,

Genzyme Techstars

Last.fm EADS,

Siemens

Waze,

Teva

IBM,

Rusnano

Infosys

Wipro Baidu,

Lenovo

-64%

Foreign

workers

-17 IPOs

in 2012

-Most US

Biomed

funding

-85

Colleges &

Universities

- Startup

initiative

created in

2010

-140 tech Cos.

-Tax breaks

for private

investors

Construction:

2013

- 2km2

campus

- Merging 6

engineering

schools

-230000

high-tech

workers

-Compulsory

military

training

-$25 billion in

tech. exports

-Founded

2010

-3.46 km2

campus

-University

designed by

MIT

Internet

users:Δ=26%

$3876 p.c.

income/y

Over

10000local

millionaires

70 colleges

and

Universities

30% China

VC funding

14.5M

internet users

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VC= Venture Capital; GF= Government Funds

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CONTACT

19 Ha Lamed Hey

93661 Jerusalem

Israel

Muntaner 200 atico

08036 Barcelona

Spain

info@kerentech.com

www.kerentech.com

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