One of these does not look like the others… Israel, like Australia, has too small a domestic market to be able to nurture a venture backable company. From the beginning, Israeli startups have to look to a global market. That often means eventually moving customer facing components (sales/marketing/business development, and often the executive team) of the company closer to the markets, usually the US. Development can often stay at home, where often costs are lower.
There is a long history of Israeli companies making this progression, and the partners at Lightspeed have been investing in Israeli companies making just this transition for many years. Many Israeli Venture firms end up leading the first round of investment in Israeli companies, then look to a US based Venture firm to lead a later round and help those companies move their market facing operations to the US and fill out their management teams. One of the reasons that this is common may be that the Jewish diaspora has led to many partners at US VC firms with ties to Israel. When faced with a very long flight to look at a potential investment, and VC’s general preference to invest within the same area code, having some personal connection to the geography can help bridge the gap.
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