As investors are drawn to Tel Aviv like lemmings to the sea, Jeff Pulver, outlier, VoIP pioneer and active business angel and mentor, is moving in the opposite direction, concentrating on filling Israel’s funding gaps.
“In 2013 I will be looking for women-led start-ups and Israeli-Arab led start-ups,” says Pulver. And, he adds, he will search for great start-ups in out-of-the-way places in Israel.
Start-ups founded by women are few and far between. Start-ups outside of Tel Aviv find it more difficult to attract funding. And Arab-Israeli start-ups face special challenges when trying to raise money. A new venture fund recently made the first institutional investment in a Palestinian start-up (see the story on pages 14 and 15). Most entrepreneurs in the territories have to make do with seed money from NGOs, if they can get any help at all.
Thanks to Pulver and others, that looks set to change. Nazareth is quickly becoming an up-and-coming area in Israel for tech. Kinnernet 2012, an annual invitation-only geek fest organized by DLD Tel Aviv Co-Chair Yossi Vardi, moved to Nazareth this year, after taking place for years near the Sea of Galilee. Last month Pulver participated in the first hackathon in Nazareth with about 80 people, including Arab-Israeli and Palestinian geeks. And, in December, Pulver will be hosting an event inNazareth designed to foster the tech community and encourage would-be entrepreneurs in the Palestinian territories to come out and pitch ideas.
“It turns out that that if you are a geek it doesn’t matter what is your race, religion or nationality. We like Star Wars and Star Trek; it is pretty predictable what your tastes are going to be. There are no boundaries when it comes to geeks. We are geeks,” says Pulver, who is credited with helping legitimize and commercialize VoIP, now a trillion dollar marketplace, early in his career.
Still, investing in untested entrepreneurs requires a leap of faith. That doesn’t faze Pulver, an American who already manages a portfolio ofmore than 25 Israeli start-ups, even though he lives in the U.S.Since 2007 his primary focus has been on making pre-seed investments in Israel, making him one of the most active mentors in the market. He gives small amounts of funding or sometimes just advice. “I am actively seeking out new entrepreneurs in most cases, trying to empower a bunch of dreams in parallel and see what happens,” says Pulver, a social networking guru and consummate networker who has more than 470,000 followers on Twitter.
Pulver spends roughly three months a year in Israel, in time chunks of 10 to 14 days, frequenting the Hotel Montefiore in Tel Aviv so often that the management has put a plaque on the door of Room 26 in his honor. In 2011, in part thanks to a change in Israeli tax law, a new fund called the Pulver Micro Angel fund was set up in Israel by Zeev Oselka and Oded Caspi, which can opt to co-invest in deals with him.
When deciding which companies to invest in or mentor Pulver goes with his gut. Lots of people say that. Pulver means it. Once his good friend Vardi asked him if he would invest 100,000 shekels in Stay in Touch (SIT), a company started by three 17-year-old girls, without even knowing what they were pitching. Pulver said yes and committed on the spot.
He didn’t live to regret it or most other investments. Taking bets on very young Israeli companies has paid off in different ways, says Pulver. Some of his companies have been accepted into accelerators, such as Seedcamp Europe, Microsoft BizSpark and TechStars Boston, and look set to go on to bigger things. Others already have: Wibiya, a toolbar development company he invested in, was sold to Conduit for $45 million.
Then there is his involvement with Interlude, a company launched by Pulver’s friend, Yoni Bloch, a popular Israeli rock star and tech entrepreneur.Pulver didn’t invest but instead made some introductions in the U.S entertainment industry. Interlude’s technology ended up being used to create the interactive music video which S-Curve Records made to launch the career of American singer Andy Grammer. Pulver had a cameo role in the video, which went on to win MTV’s 2010 Interactive Video award.
“The best results come from connecting people,” says Pulver, whose motto is “the next person you meet can change your life.” In the case of Israeli start-ups that are lucky enough to engage with Pulver, there is a good chance that might just be the case.