Moran Bar and Yaniv Feldman
Editor’s note: This is a guest post by Moran Bar and Yaniv Feldman. Yaniv and Moran are Co-Founders of Newsgeek.co.il, the largest tech blog In Israel. Moran Bar was also recently elected as one of the Top 100 Women In Tech In Europe. This guide was originally published in Hebrew on Newsgeek.co.il.
Israel, as the ‘Startup Nation’, is well known for its entrepreneurial spirit, which is also well reflected in the different types of accelerator programs that have launched in the past two years.
But before you choose a program, it is important to understand what is really down that road you are about to take.
To join or not to join?
While the benefit of joining an accelerator is often clear to entrepreneurs, some investors we approached expressed their concerns that an accelerator fits those who cannot “do it by themselves” and that in other circumstances wouldn’t pass as unique and strong enough to survive the startup world.
I believe that with time, even the most skeptical ones wil learn that it is a great tool for meeting bright, technical and excellent entrepreneurs that need the focus and enrichment of their experience in different aspects of the business and startup world.
On the one hand, as entrepreneurs, you need to make sure that the program you pick fits the stage you are at. Are you focused on a product? How are you when it comes to investor relations? Do you have a “go to market” strategy? Have you started to sell your product?
On the other hand you need to understand that the value of a good program in the right stage can be priceless.
- Mentors and service providers – a full eco-system just for you
The Israeli mentor community is limited in number but is very admirable. You can probably reach any successful entrepreneur, VC, angel or successful CEO, and they’ll be glad to give a helping hand or advice to young startups. More generally, ‘technology people’ tend to be happy to share information and experience.
Some of the programs available feature US and Europe-based mentors that can guide startups on their way to becoming successful in the global market. In addition, many service providers give low-cost or free services during the programs, creating a full ecosystem of support for new companies.
- Self-discipline, focus and support
The most important part of an accelerator, besides the mentors and the money you can get as an entrepreneur from any program, is the fact that many of them offer a shared space. As most of the startups are going through the same difficulties, this is the best way to make sure that they really work harder on the achieving their goals, and in our opinion, it is also the best place for mutual brainstorming sessions, problem sharing , self-discipline, focus and the most important – solution sharing. The impact on startups that moved from the corner coffee place to a shared space with other startups is huge.
- Accelerators give tools – but it’s up to you to decide how to use them
These advantages can help any startup, but you need to remember that the road from being accepted onto an accelerator to raising funds and releasing a product is pretty long and full of obstacles. An entrepreneur needs to understand that it is only up to him/her to decide how the future will look. An accelerator can provide you with tools, connections, leads and much more, but it cannot do the CEO’s job.
- Learn to be flexible
You need to accept the fact that you are only at the beginning of your entrepreneurial journey – that your business and idea might change several times and that it can take different directions to what you originally planned. If the first mentor tells you to take a different path, and you keep hearing that same opinion from others – you might want to consider it seriously. We won’t suggest that they are always right, but we do believe that their experience can save you some valuable time and efforts.
- Where is the money?
While in the US it seems that follow-on seed money is practically falling into your lap, Israeli early stage money almost doesn’t exist. Even VCs that declare that they will invest in early stage companies don’t really do it (for various reasons), and Israel doesn’t have enough angels or Micro-VCs to support all the great young startups and entrepreneurs.
- So why is all of this important when you are thinking about joining an accelerator?
The answer is simple: When you finish a program and leave the accelerator, only some of you will be ready for a VC investment. This means that you need to be ready for between a few months and a year of empty pockets.
Although when graduating from programs that only offer a space and office supplies, the pressure and commitment will not turn the process to an un-reversible one, if you join an equity/investment based accelerator, keep in mind that it is very hard to go back to the coffee place to work from. In those cases, you will probably already be running a company and expected to make money and succeed in order to satisfy your new investors that took the risk and supported you.
In order to do that, you will need more money.
- Failing is one of the best ways to learn to succeed
Although we love you all – only some of you will succeed in raising money and move forward when graduating from an accelerator, and some of you won’t. We believe that real entrepreneurs will not let failure stand in their way to success. So just keep on trying!
In Israel, we value persistence. Some investors even prefer to invest in entrepreneurs that failed before and try again, because of what they learned on the way.
Build your startup in the ‘Startup Nation’
Before we dive into the programs, it’s important to remember that although all the programs aim for the early-stage crowd, there are still different phases of early-stage and each type of programs fits only to a part of these stages. You should also remember to match the dates of your selected program to the stage you are in, but even if you find out you made a mistake, you can always switch programs and places or just hop between different shared spaces until you find the right one for you.
Another thing you need to know that although all of the programs detailed in this guide are aimed mainly at Israeli entrepreneurs, most of them will welcome foreign teams that want to build their startup in the ‘startup nation’ and absorb some of the great ambiance in Israel for their first steps as a startup. The only term that applies for all of these programs is that during the program, you have to be physically located in Israel and attend to all sessions related to the program (or sit in a specific workspace).
You will not find in the guide any reference to micro-VCs or ‘super angel’ groups such as Lool Ventures, Inimiti, or WeKix (and there are more where they came from). Furthermore, we did not include all the Universities’ (paid) entrepreneurship programs, programs that are still in the making or those that haven’t been officially announced.
Shared Spaces – Workspaces, mentorship and services providers
The Tech-Loft shared space was founded last year by Gilad Tufias and Tal Marian and is located in the middle of Tel-Aviv (14 Nahmani St.). The loft is actually a two-floor space with plenty of tables and office services (including free WiFi and lots of coffee) that also holds weekly meetups and Office Hours with industry experts and service providers. The Lofters are also entitled for special discounted prices from different services providers such as lawyers, accountants, UX/UI experts, etc.
The cost for an individual entrepreneur is a 1,000 NIS per month (approximately $250 US or €200). In addition to the regular space, the Tech-Loft also offers an option to rent an office, separated from the main space.
Our opinion: A private initiative with a lot of charm and good intentions. The Tech-Loft has a strong network of service providers and plenty of personal knowledge and experience to share. The price for a table in the center of Tel-Aviv is not cheap, but it is a good fit for entrepreneurs looking for a longer-term office space within the center of the Tel-Aviv entrepreneurial scene.
We have recently heard that Tal and Gilad are working on raising a seed fund to invest in companies sitting at the space.
- The Library
A space owned by the Tel-Aviv municipality in the Shalom Tower Library that was recently turned into an open space for entrepreneurs. For 250NIS (about $65 US or €50) per month, an entrepreneur will get a chair and a shared table in the workspace.
The Library limits the stay for up to four months per entrepreneur and holds meetups and lectures (usually open to the public) by industry experts from time to time.
Our Opinion: A good fit for entrepreneurs to start from. We would love to see such activities in other cities as well (a similar space exists in Haifa).
- The Junction
The Junction is a shared space sponsored by Genesis Partners, an Israeli VC Firm. The space is located in southern Tel-Aviv (32 Shocken St.) and in return for a 200 NIS ($50 US or €40) per month, you will get much more than you would expect from a normal shared space.
The Junction actually works like an actual program with limited time (3 months per class, or wave as they call in The Junction) and one of the requirements of The Junction from the entrepreneurs sitting in the space is that they dedicate 10 percent of their time to helping the other teams sitting in the space with them. In return, they will enjoy the help and experience of other entrepreneurs and teams.
Every Thursday, The Junction holds an open event where industry experts come and share their knowledge and experience in different fields and other mentors including alumni from the previous “waves” are dropping by on a daily basis.
Our Opinion: We think that the main benefit working from The Junction is sitting close to Eden Shochat, a General Partner at Genesis and a veteran entrepreneur himself. The Junction offers the teams a Demo Day event in front of dozens of Israeli and foreign angels in the end of each wave and recently (last 2 waves) Genesis has also started investing in some of the companies that graduate. According to official stats from The Junction, 50 teams have already graduated from the last 5 waves and over 20 percent of them got funded after they “Graduated” from The Junction. In addition, We know of at least 2 companies from the last two classes that got funded by Genesis VC after they graduated.
The only comment we must add on The Junction, is that although they state that their new official policy is only to “Join” other follow-up investments and never to lead an investment in any graduating startup, the issue of a VC funding a shared space and then cherry-picking some of the companies in it still creates a very strong signal towards other investors regarding the companies that the VC didn’t invest in.
- Top Center
Top Center is the only shared space we know of in northern Israel and is based in Haifa. The space has room for 25 entrepreneurs who will enjoy a quiet work environment and exposure to the business opportunities in the north of Israel (and there aren’t so many, so that is quite an advantage), a shared meeting room and access to industry services providers and experts in discounted prices. For your stay in Top Center, you will have to depart with 300 NIS ($75 US or €60) per person, and there is no time limitation on your stay.
In addition, hiCenter, the incubator behind the share space offer top center members assistance with finding funding for their venture including funding from the incubator itself.
Our opinion: we think every city in Israel should have something like this. This is a very important initiative that promotes the northern part of Israel as a suitable place for entrepreneurship and startup in the startup nation.
- The Hub
The Hub is said to be the shared workspace for environmental and social entrepreneurship. The place offers an all-inclusive package including office space, WiFi, a copy machine, coffee, a shared meeting room and access to a rooftop where you can hold meetups and events. The cost of staying at the hub start at 150NIS per day per entrepreneur and goes up to 1400 NIS per month ($350 US or €280).
The Hub also offers professional assistance from service providers like lawyers, accountants, social marketing, website design, business plan writing, etc., in addition to a personal development plan with high-level executives from the industry.
Our Opinion: The hub was among the first places in Israel that offered help and other solutions for young entrepreneurs. We spent days and nights at The Hub and had plenty of fun, beer on the roof, help and guidance.
➤ The Hub
- Startup City
Startup City is a new shared space founded and operated by Asaf Vigdor. Asaf joined hands with some foreign investors and started this space that offers all the normal services, along with networking and industry connections to foreign investors. The cost for working out of Startup City starts at 150 NIS per day per entrepreneur and can go up to 6900 NIS ($1725 US or €1380) for 6 months, depending on the plan you choose and the stage your startup is in (the prices are lower, the earlier stage your startup is in).
Our opinion: The main advantage of Startup City is the connections to foreign investors.
- 8200 EISP
In case you’ve never heard of 8200, it is considered the hottest unit in the Israeli army with regards to technology and entrepreneurs coming out it. Many entrepreneurs such as Gil Schweid, CEO of Checkpoint, Shlomo Kremer, one of the founders of Checkpoint and the founder of Imperva, and many more have emerged from it.
The 8200 EISP program isn’t just for 8200 graduates and while most other accelerators accept ventures only in the Internet/mobile spaces, the 8200 EISP program also accepts ventures from the clean-tech, bio-tech and hardware spaces. The program lasts for 5 months of meetups and its main focus is a 13-day bootcamp where you get intensive training and mentorship from top industry experts. Starting from the next class, entrepreneurs joining the program will also be able to sit in a shared space located in Bat-Yam (15 Minutes from Tel-Aviv) and the cost for the program is 500 NIS (about $125 US or €100) per person.
In the end of the program you will be able to attend a program Demo Day and present your startup to a large group of investors including top Israeli Angels and VCs.
Our opinion: We’ve been working with the 8200 EISP program as mentors in some of the panels and we witnessed the great guidance the teams get from the other experts mentoring in the program. The cooperation and cross-team work we saw is something that every program should be proud of.
- The Hive by Gvahim
The Gvahim Program is aimed to foreigners making Aliya (one of the entrepreneurs has to be an Ole Hadash, a statue given to new citizens coming from abroad, in order to join the program) and provides a scheduled program including lectures and mentoring alongside a working space in the center of Tel-Aviv (Maze St.). Among the advisory team, you can find Rina Pridor (the founder of the incubators program in the Israeli Government) and Moshe Mor, one of the partner in Greylock Israel (The Israeli office of the international VC fund).
The length of the program is about 6 months and while there is no fee you have to pay for attending the program, the management team does filter the applications by different criterions detailed in their website.
Our opinion: Cynthia and Odry’s team is doing some great work with young entrepreneurs. The unique thing about this program is the help and support they give to entrepreneurs who just came to Israel and need more help with local guidance and the way things work here in Israel (which we all know is a little different from everywhere else).
Investment based Startup Accelerator Programs
- IDC Elevator
The IDC Elevator is a new startup accelerator program, now running its first class, that got strong support for the Inter-Disciplinary Center in Hertzeliya (considered one of the most lucrative academic institutions in Israel) and is also a part of the Global Accelerator Network and has partnered with “The Summit Series” for more connections and networking.
The program is open for applications from every entrepreneur and team and after all the applications go through a filtering process, only about 10 teams will be accepted into each class.
The Program length is four months, three of them in Israel and one in New York and in the end of each part you will get to attend a local demo day (one in Israel and one in New York) in front of local investors.
In addition to all the other benefits, the program offers up to $20,000 US in funding and takes 10% equity in return.
Our opinion: The program is now running its first class and offers a small taste of the US Market. If you are in stage where you already know yourself and your product well enough to start to get to know the market – this program is a good fit for you.
Disclosure: The writers of this post are managing partners at Venturegeeks. Venturegeeks is the first Israeli startup accelerator and has already finished a first class (as of the date of this post). The class was held last year and of the five companies that graduated from this class, four of them got funded after presenting in a Demo Day event in front of more than 150 investors from Israel, US and Europe.
This program goes through the same “three months/up to 20K/10%” model but is not scheduled to open another class in 2012. We can say that this program does intend to open a new class but that its model is probably going to change.
Our opinion: Well, it won’t be fair to testify about ourselves so you can just talk directly with each of the teams that graduated from the first class, and hear what they think.
- Dreamit Israel
Dreamit Israel is an Israel branch of the international startup accelerator program by Dreamit Ventures. The program provides entrepreneurs with a shared space and mentoring for four months, where one month is held in Israel and three more months in a New York location. The Israeli program is operated by Mitchell Gulner, who is also a mentor in some of the other programs.
After signing the term sheet, you will give up9% of your company in return for up to $25,000 US. The program is running its first class and should have Demo Days both in the US and Israel.
Our opinion: The Dreamit reputation goes beyond the fact that this is the only the first program and already says a lot about the value available to a team that graduates through such a program. We believe that one should consider the stage his/hers startup is at and consider the long stay in the US against the IDC Elevator where the US stay is shorter and you have more time to work on the product locally in Israel.
- UpWest Labs
UpWest Labs is another type of accelerator program, founded by Shuly Galily (Executive Director at the California-Israel chamber of commerce and a very well connected individual) and Gil Ben-Artzy (formerly a senior Yahoo executive) last year. It has already managed to take two classes under its wings in that short time.
Unlike the other programs in this list, UpWest labs holds its entire program in Silicon Valley, and the real relationship it has with Israel (besides its Israeli founders) is that in order to apply for the program, one of the of founder has to be Israeli.
The program gives up to $20,000 US as an “allowance” for the entrepreneurs and also provides a shared space and living arrangements during their stay in Silicon Valley (they rent a big house for all the teams in Menlo Park). The program is 10 weeks long and during your stay in the Valley, you will enjoy dozens of lectures, one-on-one meetings and mentors session with some of the top entrepreneurs and investors there. When the program ends, you will get to present your startup at a Demo Day event in the valley.
The program is currently accepting applications for its third class due later this year.
Our opinion: UpWest labs is more suitable for later stage startups that already have a working product and can show something tangible to potential customers and investors. The big advantage of being in the Valley is the network and the people. If you don’t have anything to show, there is no real value in sitting around and coding all the way out there when you can do it from your own home (or shared space) back in your local country.
UpWest already has two classes that have graduated through the program so it is pretty easy to find entrepreneurs and ask them about their experience. The main advantage is obviously the much shorter distance between you and your target market in we very much recommend applying to this program, only if you think you are ready to go out to the market.
Vertical startup accelerator programs
- Windows Azure Accelerator
The Windows Azure Accelerator is the first accelerator operated solely by Microsoft staff (unlike its cooperation with TechStars in Seattle) and is more like a structured entrepreneurship program with a shared space.
The program is aimed towards startups that operate in the cloud area but isn’t restricted to those that work with Microsoft technologies. The program is four months long and during your stay in a the new space built a specially for this program, right next to the Microsoft Israeli R&D Center in Hertzeliya (10 Minutes from Tel Aviv) you will enjoy all the benefits of Microsoft’s Bizspark and Bizspark Plus program (including $60,000 US worth of Azure cloud services usage and access and licensing for all of Microsoft’s products).
Unlike most other accelerators, Microsoft doesn’t invest in any of the teams that are accepted into the program, but also doesn’t take any fee or equity. The main focus of the Azure Accelerator is helping the companies create business connections with the industry using Microsoft’s own client portfolio as a starting point. In addition, teams in the Azure Accelerator will get mentoring session from top industry experts and Microsoft’s own development teams from the Israeli R&D Center.
Our opinion: If you are in the right field (the cloud), sitting inside Microsoft and enjoying the awesome network it offers, free of charge with no strings attached sounds like a great idea to us. It is a great way of making sure you get the attention of all the right people and getting feedback and connections is something that can make or break every startup. The only question is if you are really ready for this feedback. If you are in an early stage, where all you got are a couple of sketches on your drawing board, maybe you want to wait a little bit more before you take on all those feedbacks and connections you wouldn’t know what to do with.
- Plarium Labs – Mobile gaming accelerator
Plarium Labs is a new startup accelerator that is focused on mobile gaming (currently only iOS) and accepts teams for a 3-month stay in their offices in Hertzeliya. If your team is chosen to participate in the program, you will get 30K NIS ($7,500 US or €6,000) and another 10K Nis (about $2,500 US or €2,000) per team. The most important thing about this program is the access Plarium Labs promises access for each team to 10,000 users as an initial testing ground.
The program is currently accepting applications and is a due to open its first class this October.
- Google Accelerator
Last year, we heard from Google’s Israel R&D Center that they are going to open their own accelerator in the summer of 2012. So the summer has arrived, and still no program (at least not in the open), but from what we know today we can tell you that when they open, the program will offer shared space in a new office building in the center of Tel Aviv along of top-notch mentors from Google and the Israeli tech industry.
Before you choose an accelerator, we recommend that you ask past participants, startups and investors and carry out your own ‘due diligence’ process. Make sure that the phase you are in fits to the accelerator, and that the plan and offering satisfy your needs as a new business.
To help you get to a decision, ask yourself these following questions and choose an accelerator accordingly:
• Are only looking for a place to sit and share ideas with others?
• Do you want to be seen and meet with investors?
• Do you want to start selling and meet with your potential customers?
Israel is a place of inspiration, it has a great supporting community and a technological driven entrepreneurs. We believe it is the best place to make your ideas a reality. We invite you to come and check the great programs that Israel suggest, and join the “startup nation” to build a successful startup. Good luck!
Image credit: BernieCB
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