Post on 30-Jan-2016
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TECHNOLOGICAL INCUBATORS PROGRAM
By: Yossi Smoler Program DirectorYossi.Smoler@ocs.moital.gov.il
Ministry of Industry, Trade & LaborOffice of The Chief Scientist
Government Involvement
• Market Failure:• Early stage, high risk, innovative technological
enterprises, can not raise money from the private sector.
• Government response: • Technological Incubators Program
What is a Technological Incubator?
Organization that support early-stage, highly-innovative projects, that are too risky for the private sector investments
Incubator’s Goal
Developing innovative technological ideas into start-ups and leading them towards first round investment.
What does an Incubator offer to entrepreneurs?
• Appropriate facilities and infra-structure for R&D.
• Financing.
• Central administrative services (secretarial, accounting, legal, commercialization).
• Management & Technical assistance.
• Professional & Business guidance.
• Connectivity to potential customers, partners and investors
• Inter-tenant synergism.
Government Support
• Average budget of project: $500K• Government grant: 85% of budget
• Incubator’s investment: 15% of budget
• Payback: 3% royalties from revenue
• Support duration: 2 years
• Extended support to Biotech/Pharma & Clean-Tech projects
• Annual Government Budget to the Program: ~$50M
The Incubators Franchise Model
• Franchise Term: 8 years with performance based milestones
• Tender: 1 year before Franchise end date
Technological Incubators Program
Technological Incubators Program (Cont.)
Program Milestones
• 1991: Establishment of program
• 2002: Initiating the Privatization Process
• 2005: Establishing a designated biotech incubator in Jerusalem
• 2008: Establishing 2 technology based industrial incubators in Haifa and Arad
• 2010: End of Privatization Process
• 2011: Reforms in the basic models of the Incubators Program
• 2012: Implementation of the tendering process for selecting new licensees.
Project Criteria
• Innovation and uniqueness.
• Early stage, high risk.
• Market potential.
• IP protection
• Management team
• Feasible with available resources.
• Individual initiative.
Projects Acceptance Process
1.Approaching an incubator.2.Incubator’s assessment.3.Approaching the Technological Incubators
Program.4.Program’s evaluation.5.Decision of the Incubators Committee.6.Initiating the project.
Volume of operation
• 24 incubators distributed across Israel:• 22 technological incubators
• 1 technology based industrial incubators
• 1 biotech designated incubator
• Approximately 8 projects per incubator
• Every year 70 – 80 new start-up companies are established in the incubators, ~90% of them complete the incubator term
Upper Galilee: Meytav (Tel-Chai)
Arad: Meizam Arad
Kiryat Arba: Mofet B’Yehuda
Ariel: Incentive
Nazareth: NGT
Hadera: Yozmot
Migdal Ha’Emek: Ofek
Golan Heights: Meytag (Katzrin)
Jerusalem: JVP, Van-Leer & Bioline
Gush Segev: Misgav
Haifa: Technion, LN & HiCenter
Kinneret: Kinrot (Tsemach)
Yoq’neam: Naiot
Netanya: Targetech
Tel Aviv: Lab-One & Rad-biomedAshqelon: ATIKiryat Gat: Xenia
Ofakim: OHV
Beersheba: Ma’ayan Ventures (Omer Park)
Dimona: Rotem Ventures
Sde Boker: Iris Ventures
Sde Boker
Beersheba
Ofakim
Ashqelon
Dimona
Arad
Kiryat Gat
Tel Aviv
NetanyaHadera
Haifa
Ariel
Jerusalem
Kiryat Arba
Yoq’neam
Tel-Chai
Katzrin
Tsemach
TsemachGush Segev
Nazareth Migdal Ha’emek
Incubators Location
Incubated Companies - Fields of Activity December 2011
Cleantech14%
Electronics4%
ICT31%
Biotech & Pharma12%
Medical Devices39%
Government Investments VS. Private Funds Invested in Incubator Companies (Aggregate)
1991 - 2012
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,000
2,250,000
2,500,000
2,750,000
3,000,000
3,250,000
3,500,000
3,750,000
Thousand Dollars
Cumulative Government Invesments 5,100 21,600 44,980 68,560 99,560 130,660 162,160 192,760 222,591 254,158 286,308 313,440 339,460 364,673 396,126 428,915 461,760 509,389 556,419 600,803 643,980 690,508
Cumulative Private Funds 0 100 7,950 19,045 52,026 90,580 152,652 248,729 342,260 645,705 762,910 847,140 932,903 1,127,845 1,303,012 1,741,701 2,174,698 2,544,406 2,867,147 3,154,910 3,432,141 3,564,567
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Highlights
• The incubators program is the primary “Manufacturer” of start-ups in Israel
• The incubators program is the only opportunity for early-stage, high-risk innovative projects that are not yet able to raise money from the private sector
• The incubators program is an important source of deal-flow for the venture capital industry
Highlights (Cont.)
• The incubators program is especially important in times of economic crisis
• The incubators program has a significant impact on the life-science industry in Israel
• The incubators program has a crucial role in developing an entrepreneurship culture in Israel