“I’m more afraid of dying on the road in a traffic accident,” MPM Capital founder and managing partner Dr. Ansbert S. Gadicke remarks sadly. As reported a day earlier, two of his colleagues canceled their trip to the BioTech 2002 Conference at the last minute, and he got on the plane alone. Gadicke says their wishes should be respected.
MPM is not unique in having its highest ranking executive come to the scene of the never-ending war, while more junior officials remain behind. Industry sources say that the most senior of the foreign executives prefer to take the responsibility on themselves by coming to Israel. They make a point of setting a personal example.
In addition to that, the first day of the conference begins quietly, but the entire hall is filled, as well as the corridors - The beehive of business talk and diplomatic feelers was only just beginning to buzz.
At the conference opening, moderator Yaffa Beck, executive VP and COO of D-Pharm, thanked everyone who arrived from overseas and draws a round of applause. Beck called on the foreign companies - come hither, cooperate with us, we want you to help us turn our technology into salable products. Someone in the audience whispered, “They’re begging,” but that’s not necessarily the case. In Beck’s flat American-accented English, it sounded more like an auctioneer selling a product.
In the panel of Israeli venture capitalists, all the speakers managed to be both pessimistic and optimistic simultaneously. The prize for the most popular question with the audience went to the president of Ernst & Young, who asked the venture capital investors, “Why don’t you tell us once and for all how you calculate company valuations?
The answers were not uniform, but they were interesting. Clal Biotechnology Industries VP business development Ophir Shahaf declared, “We won’t give up a deal with a truly worthwhile company because of the valuation.” Concord Ventures general partner Batsheva Elran said a good operating plan should help the entrepreneurs themselves realize how much money they needed to maintain the company until the next financing round. Evergreen Partners partner Dr. Ronit Bendori stressed that a venture capital fund is not “a bunch of people sitting behind a desk and examining start-ups;” they also strive to raise money from their institutional investors, perhaps even more than the entrepreneurs themselves.
The speakers also gave other advice in the form of a message to start-ups that can’t manage to raise money from the funds - a common problem these days. InnoMed managing partner Dr. Dalia Megiddo advised against leaving the university too early and in favor of relying as much as possible on university research grants, because “There are only five or six concerns in Israel willing to lead biomedical investments.” Apax Partners (Israel) partner for healthcare Amos Goren proposed the market test - if a company’s attempts to raise money have failed again and again, it means something. There is no point in going over lists of tens and hundreds of venture capital funds: “Go home and think about your business plan.”
One point, however, gave much food for thought after the discussion. Megiddo said, “If they took all the government aid and gave it to one major biotechnology company to open a branch in Israel, it would solve all the current infrastructure problems, including professional experience and management personnel.”
Published by Israel's Business Arena on March 25, 2002