Be part in the next Israeli Exit

Israel is indeed a startup nation. Whether it is the geopolitical and environmental conditions in which the state exists, or  past investments in higher education or simply the ‘Jewish genius’, it is impossible to deny the amazing data about the amount of foreign capital flowing into investment in Israeli entrepreneurial companies. In the same way, one can also be impressed by the amount of Israeli startups in the last decade that have merged into giant companies or acquired by global players, what is known as "Exit" in common terms.

However, such an "Exit" is a rare occurrence among entrepreneurial companies and is only possible after the company has managed to reach some level of initial prototype or product and in rare cases, when it already has an active market and a yielding business model. Many companies never manage to reach this stage in their running. This is due to the fact that these companies, which are characterized by the development of a unique, innovative technology or process, face many difficulties in their early stages. In particular, a significant number of startups fail to reach the stage when they have something to present to the world beyond an image presentation, due to funding difficulties. That is, much of the startup companies fail to reach the much-awaited Exit, due to the difficulty of raising funding for the establishment and development stages, even if they have a fantastic idea that meets a real need and can ‘conquer the world’.
 
Moreover, it is important to understand that the possibility of achieving a significant excess return, often called an "upside", lies in the investor's ability to reach and identify market opportunities, and to invest early on. Startups and innovative ventures are characterized by having no tangible assets in the initial stages. They usually hold an idea with potential, and are founded on a core team, invested in promoting and developing the idea. This makes it difficult for those companies to raise banking debt or loans from insurance and credit companies, because institutional investment policies require them to demand realizable collateral and impose covenants, financial obligations that restrict the company's development. Later in the company’s cycle, when it already has assets and its value has risen, it reaches a stage where it can raise debt from institutional bodies, and do it cheaply, and then it no longer wants to raise capital through equity share sales.
 
In contrast, for the private investor, the situation is the complete opposite. For the private investor, who is not constrained in investment policy like the institutional bodies, it can be highly lucrative to invest in startups early on, through the acquisition of Equity. At this point, as mentioned, the stock is cheap in light of the fact that companies have no better capital raising alternatives, and its growth potential, i.e. the potential for upside, is high. In this context it is worth mentioning that the alternative investment channels available to private investors are not attractive and stand at a single rate of return and sometimes a loss.
 
This is exactly the opportunity that Smart Funding offers you with a web equity fund-raising platform. The regulator has set new investment regulations in 2017 that allow the public to unite and enjoy investment options that have so far been reserved for large investors. 
 
Sounds great - but what if it fails?

True, there are quite a few startups that have not stepped up from the stages of establishment and development; Some fall apart for human reasons, others because of the business or competitive environment, others simply do not have the innovative or exhibition element to stand out from the rest. These difficulties are similar to the familiar conditions in which all companies in the market operate, only to a greater and more severe degree than in the traditional sectors of the economy. Hence is the possibility for the private investor to obtain a higher return than, for example, investment in industrial or real estate companies and to be part of the next Israeli Exit. 

Therefore, the key to making a proper investment is to spread the risk. Invest in small, diversified investments in a large number of companies in its initiation processes. Thus, we reduce our direct exposure to the private "troubles" of each of the companies individually, while at the same time, increasing our ability to benefit from the upside in case that one of our portfolio companies, or even some of them, succeed in the entrepreneurial stage and reach an Exit.
 
At Smart Funding you will find investment options that undergo rigorous professional vetting and have high chances of success. We create the opportunity of meeting and acquaintance with the company or entrepreneur, take care of the transfer of all relevant business and financial information and accompany you all the way to the realization of the opportunities you choose.