Venture Investments in Israel—a Regional Perspective

Abstract

This paper analyses the geographic distribution of venture investments in start-ups in Israel, using data for the period 1995-2004. The findings show that their location behaviour differs from that of high-tech activities: they show a pattern of "dispersed concentration" (as compared with a pattern of "concentrated concentration" of high-tech activity), with high levels of concentration in focal places, but at a commuting distance from the main metropolis. This is explained by the fact that venture investors also play the role of entrepreneurs and managers. The comparison between different types of venture investors shows that local venture capital funds lead to the heaviest concentration in the metropolis, in comparison with foreign venture investors. This heavy concentration of venture investments implies increasing regional gaps, with a minimal participation of peripheral regions, even those that enjoy some high-tech activity.

Patterns of Cooperation in High-Tech—Constraints, Feasibility, and Benefits: Results of a Study among Palestinians and Israelis

“…As a rule, high-tech activities tend to create a network of innovations with ongoing interaction and communication among the various economic actors (see Cooke and Schwartz, 2008;Schwartz, 2006;Schwartz and Bar-El, 2007). The importance of this network has been described in previous studies (e.g.…”

High-Tech Firms’ Location Considerations within the Metropolitan Regions and the Impact of Their Development Stages

“…The results show, as expected, that high-tech plants in the early stages of their life cycle are highly dependent on external financing, 69.4% against 30.6% of the established plants. Such dependency increases the attractiveness of industrial parks that are situated close to services and venture capital (VC) companies (see also Schwartz & Bar-El, 2007).…”

“…Extensive empirical studies have looked into the determinants of an industrial firm's location (Davelaar & Nijkamp, 1989;van Dijk & Pellenbarg, 2000;Frenkel, 2001;Frenkel et al, 2001;Capello, 2002;Bar-El & Parr, 2003;Schwartz & Bar-El, 2007; Arauzo- Carod et al, 2010). However, changes in the importance of different considerations on the location choice of firms, in particular, advanced technology firms, in today's globalization era have rarely been examined by these studies.…”

The Office of the Chief Scientist and the financing of high tech research and development, 2000–2010

“…Israeli VCs play a greater role at the startup stage, compared to foreign VCs; over 1995 -2004, Israeli and foreign VCs participated in 68% and 37% of startup investments, respectively. 13 Business angels also play a prominent role in high tech financing, usually in the startup/seed stages. Angels are wealthy individuals (often successful entrepreneurs themselves), who meet monthly in order to hear entrepreneurs present their plans.…”