Venture capital companies are the life blood of new invention and innovation in the economy. They provide start up capital to fund prototyping and development of new technology. There are hundreds of venture capital firms in the United States which operate by attracting investment in risky new ventures and hope for high rates of return.
The Wikipedia list of American Venture Capitol firms includes 81 pages of companies, most of which have high technology portfolios.
Bloomberg LP, headed by former New York mayor, Michael Bloomberg is a well-known venture capitol organization that specializes in broadcasting, financial software and data management. Gates Capital Partners is another well-known firm headed by Microsoft founder, Bill Gates. Gates specializes in start up investment in high tech start-ups. Khosla Ventures is an example of a less well known company providing venture capitol to start-ups in bio-fuels, bio-plastics, and alternative energy. Shasta Investors is a venture capitol firm investing in consumer messaging software and consumer space technology. Greylock Partners invests in wireless networking technology and computer data centers.
Many such venture capitol firms make major investments in Israeli high technology. The high technology sector in Israel (nicknamed Silicon Wadi) is second only to the United States in terms of growth potential. Israel has the highest proportion of engineers and technicians per capita in the world. The Jewish state developed its high tech capacity when thousands of technically trained professionals immigrated out of the Soviet Union and Europe over the last 50 years.
Investment in Israeli high technology comes from stock market investment. Currently, 150 Israeli firms are listed on the New York Stock Exchange, 63 Israeli high technology companies are listed on the NASDAQ. Individual venture capitalists also make major investment in the Israeli high technology sector. Warren Buffett is typical of venture capital investors who often touts his investment in Israeli start-ups to the world. Bill Gates has made major investments in Israeli high technology. Canaan Partners have offices in Herzelia, Israel. Greylock Partners also has a branch in Israel. Major US high technology companies have offices and branches in Israel. These include Google, Apple, Intel, HP, Siemens, GE, Lucent Technologies, CISCO, and IBM among many others.
The Israeli government offers many tax incentives to venture capital investment in Israel. The State of Israel offers conditional grants of up to 24% of tangible fixed assets. Tax laws have allowed relief from taxes and tax reductions to increase foreign investment in high technology start-up companies through the recently passed “Law for the Encouragement of Capitol Investments.”
Inventions that come out of Silicon Wadi companies have been of great benefit to the world and advanced the fortunes of those American companies which have partnered with them. Currently, an Israeli high technology company is constructing one of the world’s largest desalinization facilities in California. Israeli companies have made major contributions to software and hardware development as well as high technology weapons development and agricultural technologies.
In addition, investment in Israeli high technology has paid high financial dividends, many companies have shown investment returns of 10% or higher in recent years.
Israel is one of the safest places in the world to make venture capitol investments according to Warren Buffet and others. Israel boasts a well-developed transportation system with modern international gateways, strong intellectual property protection for patents and trademarks, a transparent banking system, and an advanced legal system based on common and corporate law.