Carmel Ventures is Israel's best venture capital firm for 2009 and Genesis Partners managing partner Eddy Shalev is the best venture capitalist, according to a "Globes" survey. The survey is the only one of its kind in Israel that examines entrepreneurs' attitudes of venture capital funds.
This is the second "Globes" ranking of Israeli venture capital funds and their partners. The rankings aim to mark the funds and partners most appreciated by entrepreneurs.
Genesis was ranked second, followed by Sequoia Capital, Vertex Venture Capital, and Pitango Venture Capital. The second ranking venture capitalist was Carmel Ventures general partner Shlomo Dovrat, Vertex managing partner Yoram Oron, Pitango managing general partner Rami Beracha, and Genesis general partner Yair Shoham.
A well-known venture capital industry adage says that funds want to sell companies, while the entrepreneurs want to continue fostering the firms they founded, in the belief that they will be the next Check Point Software Technologies Ltd. (Nasdaq: CHKP). The tension between the two groups intensifies during economic downturns. However, the entrepreneurs gave venture capitalists fairly good grades for 2009, suggesting that the latter passed the test.
Few founders and executives of venture capital-backed start-ups are wholly satisfied, and they were parsimonious with their grades and warm words for venture capitalists.
One entrepreneur said, "It's a pity that you didn’t conduct a survey about the worst venture capital fund." He offered two names for the title, and added, "Regrettably, it's not possible to rely on venture capital funds in times of crisis. The saying, 'a good friend is tested in hard times', was not met. Most funds exploit the situation to revalue company values downwards."
On the positive side, an entrepreneur said, "We're quite pleased, and not only from the politeness of our investors. They've been good to us."
Another entrepreneur said, "The fertile dialogue between the funds and entrepreneurs and company depends on calibrating each sides' level of expectations."
In 2009, Carmel Ventures beat last year's top-ranked firm, Genesis. Unlike funds founded in the 1990s as part of the government's Yozma Venture Capital program, Carmel Ventures was founded by the general partners Shlomo Dovrat and Avi Zeevi in 2000.
Dovrat was named the best venture capitalist in last year's "Globes" survey. He founded Tecnomatix Ltd. and Oshap Ltd., and led their IPOs and Nasdaq, and subsequent acquisitions by USG Corporation (NYSE: USG) and SunGuard Data Systems Inc., respectively.
"Globes": What is the most important part of your work with entrepreneurs?
Avi Zeevi: "Transparency, so that entrepreneurs know what to expect. We're proud that entrepreneurs whom we didn’t invest in come to us for advice."
Why do entrepreneurs pick Carmel Ventures?
"Maybe it's because of our entrepreneurial background. We've all been there: we've fired, we've sold, held offerings, and raised capital. This enables us to understand the entrepreneurs. We'll continue to work hard to keep this title. Most importantly, we like what we do. Working with entrepreneurs is a pleasure."
Eddy Shalev is known as a gentleman in the venture capital industry. He began his investment career at the Israeli office of Oscar Gruss & Sons before moving onto Oppenheimer, now a part of CIBC.
He co-founded Genesis Partners in 1997. It now manages $618 million in four funds, including in the $100 million Genesis IV Fund, which is still being raised.
What is the most important thing in working with entrepreneurs?
Shalev: "Understanding that entrepreneur's first meeting with a venture capital fund is the start of the loss of illusions. It's the first sobering up. When Eyal Kishon and I founded Genesis, one of the first and most important things for us was to adopt the culture of looking at things straight in the eye."
What's your outlook?
"We're returning to normal. There's an excellent deal flow, and I hope that nothing will stop this marvelous Israeli industry. It's important that all the relevant parties understand that we have here an industry that can be easily killed, but is worth preserving."
Published by Globes [online], Israel business news - www.globes-online.com - on May 31, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009