Call for Proposals: Establishment of Three New Venture Incubators (Israel)

The call for proposals is open to submitting proposals for the establishment of Deep-Tech Venture Incubators in technological areas characterized by high-risk where there is a high and challenging levels of complexity and technological innovation, strong IP and considerable potential markets.

This incentive program is designed to boost the establishment and capital investments in new start-up companies at early stages, from ideation or commercialization of IP from research institutions, through capital investments in the Pre-Seed and Seed stages to investments in series A and beyond.

Alongside the venture capital investment, the incubator must provide high added value to the incubator companies (Smart-Money), including technological and business guidance, connection to a network of strategic partners, potential customers, additional investors, consultants, opinion leaders, legal, financial and administrative assistance, and more.

Funding Information

• The Venture Incubators selected in the competitive process will receive concessions to operate Venture Incubators in Israel for a period of up to 5 years, during which they will be able to benefit from the leverage of their investments in the initial stages, through various grants from the Innovation Authority and the Start-Up Fund in particular, including the Pre-Seed, Seed, and Series A programs.
• In addition, the Venture Incubators selected in the competitive process will be able to receive cumulative grants of up to NIS 40 million over 5 years, for the Venture Incubator’s management fee and for the purchase of equipment for a central laboratory for the free use of the Venture Incubator’s portfolio companies.

What can you get?

• The incubator will be able to invest in startup companies through a variety of grants from the Israel Innovation Authority:
  • In the Venture Creation phase (before establishing a company):
    • “Ideation” (“Tnufa”) fund for promoting ideation among entrepreneurs: a budget of NIS 250,000 with an 80% grant rate
    • Applied Research Fund for translational research in research institutions: a budget of up to NIS 1,250,000 with a grant rate of up to 90%
  • In the capital investments in start-up companies stage:
    • Startup Fund – Pre-Seed Program: an investment round of up to NIS 5,000,000 at a 60% grant rate or a grant of up to NIS 1,500,000
    • Startup Fund – Seed Program: an investment round of up to NIS 25,000,000 at a 50% grant rate or a grant of up to NIS 5,000,000
    • Startup Fund – Round A Program: an investment round of up to NIS 75,000,000 at a 30% grant rate or a grant of up to NIS 15,000,000

Eligible Activities

• The incubators that will be selected as part of this competitive process will facilitate processes to create new startup companies from diverse sources, including the commercialization of IP from Israeli and foreign research institutions into new startup companies, or entrepreneurs with a groundbreaking technological idea and significant market potential. The incubators will define their own structured and innovative mechanism for venture creation.

Who can apply for a concession?

• A Consortia comprised of Venture Capital Funds and large Companies with synergistic goals.

Eligibility Criteria

• The proposer is a corporation lawfully incorporated and registered in Israel and operates pursuant to the laws of the State of Israel for purposes of profit
• The proposer has financial resources and commitments vis-a-vis the Innovation Authority concerning the availability of financial resources in the scope of at least NIS 120 million for the benefit of the incubator and the Incubator Companies, for the length of the concession period
• The proposer has a professional team designated for incubator management that includes at least a Chief Executive Officer, a Chief Technology Officer and a Chief Business Officer, each in a full-time position
• The total scope of direct or indirect holdings, by shareholders, in the proposer, of non-profit entities will not exceed 20% (fully diluted). They will not be controlling shareholders of the concessionaire, either together or separately
• A shareholder of the proposer, the proposer itself or a related company of the proposer or of the proposer’s shareholder, will be a controlling shareholder in not more than two incubators operating by force of:
  • This Incentive Program
  • Incentive Program No. 36 Technological Incubators
  • Incentive Program No.22 Biotechnological Incubators
  • Incentive Program No. 29 Technological Innovation Labs
  • Incentive Program No. 39 Entrepreneurship Incubators in the Periphery
• The proposer or one of its shareholders is not an owner of restricted accounts and is not in the process of receivership, freezing of proceedings, liquidation, etc
• The proposer and its controlling shareholder comply with the Industrial Research and Development Regulations (Conditioning of Approvals – Minimum Wage), 2011
• No financial support was received from a governmental entity or the Innovation Authority to execute the proposed activities, directly or indirectly, that was not according to this Incentive Program’s provisions.

For more information, visit Israel Innovation Authority.