Thursday, September 11, 2014

Israel Seeks to Boost Angel Investment in Tech With Tax Break

Israeli Economy Minister Naftali Bennett is working to revolutionize the way early-stage startups that drive the country’s economy are funded.

Bennett, himself a former high-tech entrepreneur, is pushing ahead legislation that would let angel investors write off 100 percent of the money they put into young companies.

“This is the most aggressive angel law that I’ve heard of,” said Bennett. “It is explosive.”

In addition to boosting Israel’s technology industry, which makes up about half of industrial exports, the legislation would also cool the housing market by siphoning off investments from real estate, he said. Housing prices have jumped about 80 percent in nominal terms since 2007.

Israel has 6,000 or so active startups, but only about 1,000 raise venture capital, according to Koby Simana, head of the Tel Aviv-based IVC Research Center. “It is a good opportunity for both start-ups and private investors.”

Last month, Mobileye NV (MBLY), which makes software to avoid car accidents, raised $890 million, a record for an Israeli company going public in the U.S. Data security company CyberArk this week filed to sell shares in the U.S. for as much as $80 million.

Source: Bloomberg

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