Israel seeks new stock market ideas to keep high-tech firms and talentJun. 5, 2013
After Silicon Valley, Israel is widely considered the world's second-largest high-tech centre - but not one of its estimated 5,000 start-ups went for an initial public offering (IPO) last year. By contrast, 66 high tech Israeli companies were bought for around $10 billion in total.
"We are trying to provide a financial infrastructure in order for start-ups to grow in Israel instead of being sold abroad," said Sraya Orgad, co-chairman of the committee appointed by the Israel Securities Authority (ISA) to promote investment in public companies.
There are several reasons behind Israeli firms' reluctance to head for the stock market, including the cultural tradition that entrepreneurs in the country prefer to work on small start-ups than run big companies and so tend to sell and move on to the next project rather than consider IPOs.
In addition the venture capitalists who fund start-ups tend to prefer the quick exit afforded by a sale rather than a drawn-out IPO process. And foreign firms who prefer to pay for new technology rather than develop it themselves know that there are plenty of companies looking to be acquired for the right price.
For the full press release on Reuters click here.
See also: The Jerusalem Post story "Exit Nation? 95% of Israel start-ups sold abroad".