public-private collaboration from research to market yigal erlich, founder yozma
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Public-private CollaborationFrom Research to Market
Yigal Erlich, Founder Yozma
Eco-system
Mixture of knowledge, innovation and entrepreneurship• High quality of human resources• Entrepreneurial culture• Commercialization of Research (TTO’s)• Strong presence of major global technology companies• Critical mass: capital, investors, VC funds, start-ups• Modern legal, IP regime and financial infrastructure• Government support: incentive plans, tax benefits
Israel's Academic Institutions -Technology Transfer Companies (TTC)
Institutions TTC
Hebrew U. (Jerusalem) Yissum
Tel-Aviv U. (TA) Ramot
Technion (Haifa) Mosad Technion
Weizmann Inst. (Rehovot) Yeda
Ben-Gurion U. (Beer-Sheba) B.G.Negev
Hadassah U. Hospital (Jerusalem) Hadasit
2014 – 31 new companies were established by TTO’s
CSO – Magneton, ToT program, up to $1mil for 24months
Share of patents owned by industry
2003-2005
OECD
Turkey
South Africa
Mexico
Norway
Brazil
Italy
New Zealand
Spain
Germany
Belgium
Czech Republic
Austria
Australia
Russian Federation
European Union
Switzerland
France
Denmark
Sweden
Japan
United Kingdom
Hungary
World total
Canada
Korea
United States
Netherlands
India
Ireland
Finland
China
Singapore
Israel
0 20 40 60 80 100
High-technology Medium-high technology Medium-low and low technology
%
Foreign ownership of domestic inventions,
2003-2005
OECD
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Government Involvement
• Market Failure (1985-1992):- Early stage, high risk, innovative technological
enterprises can not raise money from the private sector. only.
• Government response: - Chief scientist grants- Technological Incubators Program- VC
Government OCS Support Programs
Ministry ofIndustry, Trade andLabor (MOITAL)Office of theChief Scientist
Generic R&DCompetitive
R&D
National
Pre-Seed
Tnufa
Nofar
TechnologicalIncubators Cooperative R&D
Applied Academic Research
Basic R&D Market Proximity
EUREKA
Bi-national Funds
IRC
ISERD(Europe FP)
International
Global Enterprises R&D Cooperation
Bi-national Agreements
Galileo
Magnet
Long-RangeR&D
Magneton
Industrial R&D
Traditional Industry Upgrade Program
Incubators Volume of Operation
• 23 incubators distributed across Israel: - 20 technological incubators - 2 technology based industrial incubators - 1 biotech designated incubator
• Approximately 8 projects per incubator
• Every year ~70 new start-up companies are established in the
incubators.
• Over 50% continue operations at least 3 years after graduation
• Since inception: 1600 companies; $770mil' -government
investment; $5bil' -private
Incubator Support (Added Value)
Appropriate facilities and R&D infra-structure
Financing
Inter-tenant synergismManagement & Central administrative services
Network Connections
Professional Technological & Business guidance
13
Government Funding VS Private Investments | 1991 - 2014
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
Government Funding Private Investments
14
Fields of Activity |
Pre-Seed and Seed Programs
Incubators Sectors
Medical Device;
30%
Bio-Pharma;
15%Clean/Agro-Tech; 20%
ICT; 35%
Misc; 5%
The Israeli VC Ecosystem
• VC Investments by Sector
2013 – Internet is Growing
Professional VC funds
Capable to raise funds Choosing the right investments Managing the investments Building value for exit
Government role in investments vs. VC
Government Involvement
Risk sharing Market failure conditions Government as a catalyst Predetermined exit conditions No government control Indirect investments (funds)
Investments in Israeli Startups (10 year record)
• 10-Year Total: $ 17b
• Israeli VC Funds: 35% of total, 2013: 22%
• Increased activity by foreign investors
1.51.3
1.61.8
2.1
1.11.3
2.11.9
2.3 2.2
45% 49% 40% 39% 38% 37% 37% 29% 26% 22% 18%
55% 51% 60% 61% 62%
63% 63%
71% 74% 78% 82%
0
1
2
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E
Israeli VC funds Foreign & Other
The Israeli VC Ecosystem - Exits
• 10-year total: $51b• M&As: $47b, 93% of Total• VC-Backed: $22b, 43% of Total
1.92.7
10.1
3.62.7 2.6
2.2
5.1
9.7
6.3
0.8 0.9
2.8
1.7 1.5 1.5 1.3
2.5 2.8
4.262
76
96 88 8677
71
94
81 73
34 30
50
30 37 3127
37
38
32
0
50
100
150
0
4
8
12
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
M&As VC-backed M&As No. of M&As No. VC-backed M&As
Select Multinationals Presence in Israel
• Actively seeking Technology Innovation
Israel VC – Performance 1997-2014
• More than 8000 startups established
• NASDAQ: 70 Israeli high-tech companies are listed
• Human capital emerged as Israel’s main resource
• M&A: $77 billion, IPO: $7.6 billion raised
• $15 billion raised by Israeli VC funds
• $2 billion invested in the VC sector
• Global recognition as a leading innovative technology center, 2nd only to the Silicon Valley
VC – the Accelerator of the High-Tech Industry Innovation and Growth
• The economy growth engine
The R&D Fund
• Budget is approximately $300M.• The R&D Fund is the main instrument of The
R&D Law. It gives grants to “Approved R&D Programs”, which are lasting one or more years, resulting in the development of a new product or in a significant improvement to an existing product/process.
• Grants are from 20 percent to 50 percent of the total approved R&D expenditures of the approved projects.
Traditional Industries Support within the R&D Fund
• Special track is dedicated to Traditional Industries (industries characterized by relatively low investment in R&D).
• This track offers separate evaluation and discussion for projects. • The Fund supports projects at the
maximum level of 50%.• Since 2006, 350 companies approved and
provided grants of about $150M by the OCS.
Early Stage Program Support within the R&D Fund
The target is young companies, less than 3 years from establishment.
Designed for projects of up to $2,500,000 with a duration of up to 24 months.
Grants are 50% of the approved budget, and the company must be a first time applicant for OCS.
Sales volume is less than $150,000 annually.Royalty payments 3% - 5% of the future
product sales.
TNUFA Budget -$4MNational pre-seed fund, assists individual
inventors and nascent start-up companies during earliest stages of their projects.
Includes evaluation of the technological and commercial potential, and assistance drafting an initial business plan.
Grants of up to 85 percent of approved expenses are available to a maximum of approx. $65,000 per project.
Magnet-Generic R&D
Budget – $47M.Supports consortia of industrial companies
and academic institutions.Target: jointly develop generic, pre
competitive technologies or disseminate existing new technologies.
The technology cannot be acquired from commercial sources at competitive prices.
Grants of up to 66% - no royalty repayments.
MAGNETON
Promotes technology transfer from academia to industry, in order to reduce uncertainty before the technology is used by the firm in new developments.
Designed for projects of up to $800,000 with duration of up to 24 months.
Grants are up to 66% of the approved budget.
No royalty payments are mandated.
NOFAR – Industrial Application of Academic Research
Supports applied academic research in specific technological areas (biotechnology, nanotechnology, medical devices, water & energy storage), in order to adapt it to relevant industrial applications.
Project's budget is up to $130,000 for a period of 12 months.
Grants are up to 90% of the approved budget.No royalty payments are mandated.
KAMIN - Promotion of Selected Applied Research
Designed to serve as an additional bridge between basic and applied research, for projects not yet ready for commercial investment.
Opportunity for academic research groups with projects at the applied phase, to continue in the applied direction for up to two years at a level of support of 85-90 %.
The research institute is responsible for the remainder of the R&D costs.
No royalty payments are mandated.