Israel Innovation: Incentives to Establish Angel Investor Clubs

The Israel Innovation Authority initiated a competitive process to bolster Israeli high-tech and investment. The proceedings aim to select up to three concessionaires to establish and operate private investor (angel) clubs. These clubs will invest in technology companies operating in high-risk fields (inter alia, communications, life sciences, agritech, smart transportation, etc.) and conduct fundraising rounds in the pre-seed and seed stages. The concessionaires will operate by virtue of benefit track 49A, “Programs to Encourage Entrepreneurship and Pre-Seed Startups.”

The main purposes of the investor clubs are to expose club members (potential investors) to ventures offering technological innovation in various fields, to assist members during the processes of analyzing and managing investments, and to exert efforts to acquire new members and maximize profits for them.

Threshold Criteria

One of the threshold criteria for participating is that the bidder must be an Israeli – profit or not-for-profit- corporation. The winners will receive a concession to establish and operate an angel investor club for a three years period . During the concession period, each concessionaire will receive an annual IIA grant of up to ILS 900,000. The grant is subject to the concessionaire’s fulfillment of its obligations and the threshold criteria according to the benefit track and the sub-track.

The grant money the concessionaire receives is to be used, inter alia:

1. To establish the club and recruit experienced investors from diverse fields to its ranks, who will contribute their experience.
2. To hire the club’s manager.
3. To engage with suppliers to provide due diligence, legal, financial, and tax services for the investment needs of private investors.
4. To engage in business and strategic partnerships with investors, the high-tech industry, and Israeli academia.

Click here to read the call for proposals published by the IIA, and here for benefit track 49A’s procedures.

***

Adv. Ken Shaked, a partner in Barnea Jaffa Lande’s Corporate Department, is at your service to answer any questions about applying to the Israel Innovation Authority for grant or about any other issues pertaining to the high-tech industry and startups.