Crowdfunding site pairs entrepreneurs and investors
OurCrowd combines crowdfunding with venture capital to give startups a head start.
Anyone can have a good idea, but not every good idea becomes a reality. Startups go from somebody’s brainchild to profitable businesses because of hard work and the help of an entire eco-system that's developed around supporting bright ideas to solve big problems.
In Israel, where the startup scene is thriving, an innovative crowdfunding website combined with a venture capital operation is funding the next generation of Israeli startups online.
OurCrowd vets startups and then allows accredited investors to back them. Led by American investor Jon Medved, the nitty-gritty of sourcing, evaluating, choosing and mentoring and investing in those companies is the responsibility of general partner Elan Zivotofsky.
Medved handpicked Zivotofsky–who began his finance career in the United States, before moving to Israel with his own family in 1997–to join his operation when it launched.
The team oversees “every stage, from finding companies we want to invest in, doing the research, to the actual structure of the deal process – from the initial negotiations to the closing of the deal,” Zivotofsky told From The Grapevine.
The process starts with a preliminary screening of up to 150 companies from Israel and around the world every month. They narrow it down to 30 companies to meet with in person, to identify the standouts they want to bring to the attention of their online investors.
“In choosing companies, we look at many criteria but put particular emphasis on the quality and experience of the management team, the size and growth of the addressable market, technology and business differentiation and the overall vision and strategy of the company,” said Zivotofsky.
The funding model has worked; the startups coming down the pipeline from OurCrowd amaze with their innovation. Zivotofsky gave From the Grapevine a closer look at a few standouts:
An installation of the enVerid air recycling system. (Photo: Courtesy of enVerid)
Headquartered in the United States, enVerid's technology is used in submarines and space stations. Their system is able to “scrub” indoor air that has already been circulated and to recycle it, essentially negating the need for an HVAC system to use outdoor air at all.
"By massively reducing the amount of outside air that is brought in, our easy-to-install enVerid HLRs deliver significant energy savings, and thus pay for themselves in a very short time," the company wrote on their website.
The company has recently been awarded a grant from the United States Department of Energy to accelerate the deployment of their HVAC load reduction technology for buildings. The grant is awarded to companies deemed capable of helping American businesses cut energy costs through improved efficiency, while also reducing carbon pollution. enVerid was one of only four such companies to receive the grant last year.
Their product, SCiO, uses optical technology to shine a light on anything in nature, and within seconds give you detailed information about that product or material. “If it's food, it can tell you immediately how much fat it has, how many calories, and other nutritional information,” explained Zivotofsky. “It can also be used in a pharmaceutical environment since drugs have a unique chemical stamp, and users will be able to tell if a drug is real or fraudulent.” It has the potential to be used for a myriad of purposes as well. Consumer Physics plans on launching their product for consumer use next year.
The founder of ReWalk, a company also backed by OurCrowd that invented and prototyped the world’s first exoskeleton, is Dr. Amit Goffer, himself a quadriplegic. He started this, his second company, last year. Unlike ReWalk, this innovation helps quadriplegics as well as paraplegics. The focus here is not on walking, but on mobility, and unlike other standing wheelchairs, it would provide much needed stability so that users can traverse any and all terrains. A prototype of the device is currently in production and will hopefully be on the market by 2016.
Another Israeli-based company, BillGuard gained an enormous amount of business after the Target debit card security breach last year. “BillGuard knew about the security breach even before Target knew about it,” says Zivotofsky. How does it work? “Once you enter your credit card information into the app, it will search for fraud or identity theft by crowdsourcing from other users’ fraudulent charges, bank transactions, and complaints against companies,” explains Zivotofsky. “It crowdsources all that data, looks for anomalies across the data globally, and notifies you of anything suspicious on your bill.” BillGuard calls the process “collective vigilance.”
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