IS­RAELI STAR­TUPS, IPOS AND BE­YOND

The Jerusalem Post - The Jerusalem Post Magazine - - OBSERVATIO­NS - • LI­DAR GRAVÉ-LAZI This ar­ti­cle was writ­ten in co­op­er­a­tion with ZAG/Sullivan.

In the past, where peo­ple sup­ported Is­rael as char­ity or Zion­ism, to­day it is sim­ply good busi­ness to in­vest in Is­raeli com­pa­nies, stated Oded Har-Even, part­ner and manag­ing di­rec­tor of ZAG / Sullivan Law Firm.

Har-Even re­cently sat down with The Jerusalem Post to dis­cuss the Is­raeli tech ecosys­tem, in­vest­ing in Is­raeli star­tups and the risks fac­ing Is­raeli com­pa­nies head­ing to Wall Street.

ZAG / Sullivan is an in­ter­na­tional law firm with branches in Tel Aviv, Bos­ton, NY, Wash­ing­ton and Lon­don, as well as in China. The firm is a pow­er­house when it comes to ad­vis­ing hi-tech and life sciences star­tups do­ing busi­ness in Is­rael and the US, rep­re­sent­ing roughly a quar­ter of all Is­raeli com­pa­nies be­ing traded on NAS­DAQ to­day.

“We view our­selves as part­ners, not just as lawyers, so we not only ad­vise on the le­gal side, but we also help make many in­tro­duc­tions and pro­vide a lot of advice that is more busi­ness-re­lated – es­sen­tially help­ing com­pa­nies nav­i­gate the ecosys­tem,” HarEven said.

As such, the firm acts as a “one-stop shop,” ac­com­pa­ny­ing star­tups from their first in­vest­ment through to their first ini­tial pub­lic of­fer­ing (IPO) and be­yond.

Ac­cord­ing to Har-Even, many com­pa­nies and CEOs don’t truly un­der­stand and ap­pre­ci­ate the risks of this process.

“Many com­pa­nies that we see sim­ply don’t have the ex­pe­ri­ence,” he said. “The big­gest chal­lenge is mov­ing from ‘the dream part’ to the ‘re­al­is­tic part,’

or hav­ing a vi­sion and de­vel­op­ing this to cre­ate an ac­tual rev­enue-gen­er­at­ing com­pany.”

The lat­ter part is cru­cial in to­day’s ever more com­pet­i­tive busi­ness world.

“In­vestors are not stupid, they’re smart – and they’ve seen lots and lots of com­pa­nies,” he ex­plained. “They are more sen­si­tive than they were 10 years ago and what they want to see is that com­pa­nies are gen­er­at­ing profit.”

Har-Even added that for a com­pany to get to its next sig­nif­i­cant mile­stone, it has to have a suf­fi­cient amount of money. This, he says is the big­gest risk for com­pa­nies head­ing to Wall Street.

“The big­gest risk for a com­pany go­ing into an IPO is that it will en­ter the mar­ket when it is un­der­funded,” he said. “If you are a pub­lic com­pany, you have to be funded when you en­ter the mar­ket be­cause when you are un­der­funded, peo­ple will re­al­ize that you will need to raise more money very soon, and this can re­flect poorly on val­u­a­tion.”

When it comes to Is­raeli com­pa­nies, this is even more crit­i­cal be­cause they of­ten don’t have the ac­cess and con­nec­tions to the large in­vest­ment firms that US com­pa­nies en­joy.

Still, Har-Even said that he doesn’t be­lieve Is­raeli com­pa­nies are at a dis­ad­van­tage.

“On the con­trary, I think Is­raeli com­pa­nies are at an ad­van­tage. They have chutz­pah, and this is a unique and great thing to have be­cause they don’t take no for an an­swer.”

On the other side of the equa­tion, he added that the most im­por­tant as­pect for com­pa­nies that have al­ready suc­cess­fully gone pub­lic is cred­i­bil­ity.

“It takes a lot of time to build this, but only one se­cond to de­stroy it,” he said.

“You have to un­der­stand that you’ll have sunny days and rainy days – at some point the stock will go down. You can’t make mil­lions ev­ery day. Some days you don’t, so you have to be aware of the risks and be pre­pared,” he added.

More­over, Har-Even ex­plained that the stakes for Is­raeli com­pa­nies on Wall Street are very high, not just for in­di­vid­ual Is­raeli com­pa­nies, but for the en­tire Is­raeli mar­ket.

“If two or three [Is­raeli] com­pa­nies go down, it af­fects the whole Is­raeli mar­ket. If a com­pany’s IPO fails, then in­vestors are of­ten afraid to touch an­other Is­raeli com­pany,” he said. “And of course, this works vice versa. If two or three com­pa­nies are sold it is good for the whole mar­ket.”

De­spite these risks, he noted how many ac­com­plish­ments Is­raeli tech and life sciences com­pa­nies have achieved for such a small coun­try.

“Peo­ple al­ready un­der­stand the po­ten­tial in Is­raeli com­pa­nies and they un­der­stand the risks,” he said, adding that there are risks when in­vest­ing in any com­pany, and that in Is­rael, even when there was a war, com­pa­nies con­tin­ued to op­er­ate.

“There are many op­por­tu­ni­ties in Is­rael and many young promising com­pa­nies who are strug­gling, but if they can get the in­vest­ments, they will be able to grow and thrive – and this is good not only for Is­rael but for the ad­vance­ment of sci­ence and tech­nol­ogy world­wide,” he said.

(An­drew Kelly/Reuters)

‘THE BIG­GEST risk for a com­pany head­ing to Wall Street (pic­tured) with an IPO is that it will en­ter the mar­ket when it is un­der­funded.’

(Rami Zarne­gar)

ODED HAR-EVEN, part­ner and manag­ing di­rec­tor of ZAG/Sullivan Law Firm.

Newspapers in English

Newspapers from Israel

© PressReader. All rights reserved.