There is a new player on the global crowd funded equity scene.
Angel list has taken the headlines globally with hundreds of thousands of tech startup profiles and tens of thousands of registered angels.
But John Medved Israeli/American industry visionary and founder of OurCrowd equity crowdsourcing platform says his platform is the largest in the world and has differentiated by being curated and highly quality centric.
John Medved is a successful angel, VC, founder and industry leader with global perspective and a a deep understanding of the tech startup and investor scene in the US and Isreal based on first hand experience over decades.
John Medved (right) is pictured above with SydStart founder Pete Cooper (left) at Sydney based Pollenizer in trendy startup warehouse and digital creative precinct in Surry Hills.
I met the charming and larger than life Medved at Sydney based incubator and accelerator Pollenizer last night and was able to enjoy first had some of his excellent synopsis on the Israeli Startup Nation miracle. He was surrounded by locals and internationals alike trying to get a slice of his time.
Medved appears in the real life book by the same name ‘Startup Nation’ by the way (and is frankly much more engaging and animated than the authors in my humble experience). It was written by his friends who didn’t realise their book would take the world by storm in more than 20 languages and end up effectively rebranding their small yet highly influential and connected nation.
His key observations are –
- Israel tech startup funding is around 60 times the volume of Sydney Australia (no doubt some may challenge this point but it makes for a good debate).
- Many innovations perceived to be of US origin in the tech startup scence globally actually originated from Israel
- 40 incubators in Israel, were government run and are now all privatised
- Dozens more are run by local and international groups but only the ex-government ones received co-funding from the government
- This co-funding matches private investors at a ratio of 1:5 so if your startup can raise $100K from angels, the Israeli government will chip in a further $500K, these funds are distributed via the incubators who act as gate keepers and are expected to add value in accelerator programs and oversight
Probably most interesting though is that most of the OurCrowd funded businesses were not beneficiaries of these programs despite it being widely acclaimed as a key element of the Israeli startup success story.
OurCrowd is an interesting model because they –
- Take a board seat and are active in the company
- Have raised $24m vs Angel List at $14m (yes much smaller than we all assumed)
- OurCrowd are based in the second most influential startup city Tel Aviv, after San Francisco (at number 1 overall) and before Los Angeles (at number 3) on the Startup Genome/Compass Rankings. Sydney comes in at 12th overall but 5th on some measures and 1st overall in ‘data driven’ attributes.
- Differentiate via careful curation, not everyone is allowed on and this is paying off, everyone has been fully funded so far.
- Focus only on their local jurisdiction today in terms of regulatory compliance and operating hub but can invest anywhere globally
The curation model is based on six principles (these are an excellent basis for any startup to consider for any investor discussion) –
- People – are key, this is a deal breaker
- Market – large and growing, ideally global
- Simple – the product can be complex but the ability for people to understand it in one or two sentences is crucial, this is a rarely used criteria and possibly unique although intuitively most would agree we apply this one
- Sponsored – ideally via co-investment
- Traction – they must have momentum and signs of product market fit being achieved
- Price – good value at this round and the likelihood of good value at follow on rounds
They have already done 8 follow on rounds and consider Australia and the Philippines (Medved’s next stop on his global tour) to be excellent value buying for investors.
With thanks to Mick Liubinskas and Phil Morle of Pollenizer and Dean McEvoy and Mick again as part of the Endeavour Institute for the opportunity to meet John. If you would like to see him he is speaking at 50 York St at Blue Chilli incubator/accelerator tonight Fri 25th Oct.