A Venture Capitalist Hopes to Shake Up GA Participants

Meet California-born Israeli Jonathan Medved, whose startup brings together Zionism and crowdfunding.

“Oh My God! This is ridiculous! No way!” exclaims Jon Medved, shocked by the number popping up on his computer screen. His face – all hipster 5 o’clock stubble -- erupts into a roar of laughter, his eyes – right behind those designer reading glasses -- twinkle. “That did not just happen! Too cool!!”

One of the newly featured startups on his venture capital equity crowdfunding platform– OurCrowd – is up to $140,000 in funding. Ten minutes ago, just $20,000 had been pledged.

“Wait a minute, I need to check this is not a glitch,” he announces as he gets up and barges out of the room – open collar Hawaiian-style shirt that clashes, and yet somehow also matches, his colorful kippa -- talking to himself: “So amazing cool!

“Did someone mess around with the system?” he roars out to no one in particular, his black sneakers thudding around the hallways as staff dodge out of the way.

California-born Medved, 58, one of Israel’s top venture capitalists and serial entrepreneurs, started OurCrowd in February together with a team of Israel-based hotshot investors and entrepreneurs, as a way to find and invest in select early stage high-tech companies in Israel — and give individual investors from around the world the opportunity to join in and invest too.

Modeled, to some extent, after such ground-breaking platforms as KickStarter and IndieGogo, OurCrowd uses the same idea of collective cooperation of a group of people (the “crowd”) to pool resources together in support of a specific project. But unlike those platforms -- in which people donate money in exchange for various, non-monetary rewards — OurCrowd is part of a new sort of model, one that invites people to contribute funds to a business or project in exchange for equity.

And no, no glitch there today. The platform has been an enormous success, registering over 2,000 investors (one has to be an accredited investor, and be vetted, to partake -- with a minimum $10,000 investment) from 19 different countries. All together, since February, OurCrowd has raised over $24 million for 29 venture capital startups -- of which 27 are either based in Israel or founded by Israelis.

The startups that OurCrowd promotes – ones Medved’s operation invests in itself – are a diverse bunch, focused on everything from mobile communication and cyber security to clean energy, medical devices, gaming and e-commerce.

In choosing the one or two startups to fund every month from among the thousands of applicants, one of the prerequisites, Medved says, is that the companies donate a portion of their equity -- through a partnership with Tmura, the Israeli Public Service Venture Fund -- to a charitable cause. Soon, confides Medved, the site will begin to offer investors the option of also earmarking a part of their equity for charity. Friends of the IDF? Magen David Adom? The Jewish National Fund? If and when companies and their investors succeed — so too will their chosen charities.

Medved -- who moved to Israel in the 1990s, lives in Jerusalem with his wife and four children, and manages to describe himself as a “passionate Zionist,” twice in a 45-minute interview -- will be at the General Assembly of Jewish Federations of North America on Monday, discussing how OurCrowd fits into what he sees as the sea change in relations between the Diaspora, Israel, and the whole businesses of giving.

Forget charity, think investments

“All these people coming to the GA have invested millions supporting Israel and are proud Jews. But I would say 95 percent of them have never invested in an Israeli company. They have read ‘Start-up Nation.’ They are proud. But they just have not had the opportunity,” Medved says. “But guess what, the way to help Israel the most and be truly connected here is to invest.

“Maimonides, in his writings on the laws of charities,” continues Medved, who is modern Orthodox and does not flip open a laptop, pick up a phone or even think investment on Shabbat, “…says, to sum it all up… that the best form of giving -- is to give someone a job.”

“And here, that’s what we are doing. Helping the fisherman fish kind of thing. We are both investing in companies that are creating economic wealth – and also encouraging those companies to give back to Israeli society themselves. It’s all there.

“The new model for giving is about partnership. The old model of Jews in Diaspora just supporting Israel is at its end. We are all stepping up to the plate here,” says Medved. “It is happening big time.”

Basically, OurCrowd, he says in conclusion, is the ultimate win-win-win situation, brought to you by an new and improved Israel - innovative, confident, and philanthropic towards its own – but still keen on Diaspora help and input.

Bloombergs