Israel's silicon valley seeks NIS 500 million state investment

Leaders in Israel's technology industry and the venture capitalists who make their dreams happen met with Prime Minister Ehud Olmert on Thursday to examine ways to protect the field from the fallout of the global economic meltdown.

Among those at the meeting were Dr. Orna Berry, chairwoman of the Israel Venture Association and a partner in Gemini Israel Funds; Zvi Slonimsky, former CEO of Alvarion; Giza founder Zeev Holtzman; and chairman of Teledata Networks and IVA CEO Yifat Adoram.

The primary suggestions raised at the meeting were extending state support to startups and technology exporters, doubling the budget of the Chief Scientist's Office and creating a plan to save venture capital funds whose foreign sources have dried up due to the global crisis.

For companies with annual revenues of less than $30 million, attendees proposed a loan insurance system for bank and non-bank loans.

For companies with revenues exceeding $30 million a year, insurance would be provided by the Israel Foreign Trade Risk Insurance Corporation.

The industrialists and venture capitalists envision a state-funded lending program for funds and institutions that invest in technology companies and raise capital. Alternatively, a government venture loan fund would be created.

The proposal calls for the state to spend NIS 500 million over a period of 10 years.