The entrepreneurs’ top VC - Carmel Ventures1
Globes - Batya Feldman and Shmulik Shelah
Carmel Ventures is Israel’s best venture capital fund, according to the third annual "Globes" survey of entrepreneurs’ attitudes towards venture capital funds. Its founders and general partners Avi Zeevi and Shlomo Dovrat are the best two venture capitalists.
2010 was the third year that "Globes" has ranked Israeli venture capital funds and venture capitalists, on the basis of entrepreneurs’ attitudes, rather than by investments and returns. It is the only survey of its kind in Israel.
Genesis Partners was ranked second in 2010 and Sequoia Capital was ranked third. Genesis managing partners Eddy Shalev and Jonathan Saacks tied with Dovrat for second place as the best venture capitalist.
Carmel Ventures is considered one of Israel’s top venture capital funds. It was founded in 2000 by a group of entrepreneurs, Zeevi and Dovrat among them. The two men cofounded Technomatix Ltd. and Oshap Technologies Ltd., which was sold for SunGard Data Systems Inc. for $223 million in 1999.
Rina Shainski and Ori Bendori later joined Carmel Ventures as general partners, and Ronen Nir and Itzik Avidor joined as partners. The firm currently manages $607.5 million in three funds, and it has 31 companies in its portfolio.
Carmel Ventures has had eight exits, including three in 2009, one of which is especially worthy of mention: the sale of CopperGate Communications Ltd. to Sigma Designs (Nasdaq: SIGM) for $177 million. Previous exits by Carmel Ventures include the sale of Actimize Ltd. to NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) for $282 million, and the sale of Followap Telecommunications Ltd. to Neustar Inc. (NYSE: NSR) for $139 million.
Carmel Ventures invests in companies at every stage. Its focus areas are software, telecommunications, Internet, semiconductors, and consumer electronics.
After the vote, Zeevi said that Carmel Ventures was very proud and flattered. "We invest everything we have in entrepreneurs, and in truth, we are more dependent on them than they are on us. Companies have many investors, which can finance and support them over the years, but we depend on the companies’ success. Their success enables us to raise capital for follow-on funds," he told "Globes".
Carmel Ventures aims to be an entrepreneur and manager-friendly company. Zeevi says that this is partly because he and Dovrat remember their days as entrepreneurs. "We know what they’re going through, so we take care to help in any way we can. The most important thing is not to disrupt."
Zeevi is an old fox in the Israeli venture capital industry, first as an entrepreneur and executive in high-tech companies, and since 2000 as a general partner at Carmel Ventures. In line with Carmel Ventures’ image, Zeevi is known in the local industry as an industrious man who demands that the entrepreneurs of the firm’s portfolio companies invest as much as he does. He is considered a hands-on investor in the companies he is responsible for as well as in companies overseen by his colleagues.
"Entrepreneurs are our target audience. We invest efforts. This is true for all of Carmel’s team, who seek to add value and be available for entrepreneurs when they need them," he said.
"Globes": Why do you think entrepreneurs voted for you?
Zeevi: "Over the past decade, we’ve proved that we’re investors who know how to help raise capital, for strategic thinking, reaching customers and markets with a comprehensive overview, and most of all, for being available to them 24 hours a day. All the fund’s people work as a team and are involved in all the companies."
How is this expressed?
"We try to understand what they’re going through, to be with them when there are problems with customers, markets, or money. In hard times, we try to be there and help them build large companies, or at least not to disrupt their progress. Our operative background helps us identify with them, through all the troubles, and definitely during the good times."
How do you see your job?
"Our agenda is no different from that of the entrepreneurs. We’re dependent on them and they’re dependent on us. Therefore, openness and transparency are critical. As former entrepreneurs, we keep up an honest dialogue, for better or worse."
Zeevi added, "This is a people business. That’s why it’s important to be humane even when taking the tough decisions. We make mistakes, but we try to learn from them."
Carmel Ventures was ranked the best fund last year, but you personally were also voted the best venture capitalist this year. How does this affect you?
"Obviously, it’s flattering. I always try to identify with the problems facing entrepreneurs and managers. I try to talk honestly with them, and not to conceal anything from them, for better or worse.
"Most important, I love my work, and I wake up with renewed enthusiasm every morning. I enjoy working with entrepreneurs, and I think that this influences the results. In addition, and I don’t simply say this, at Carmel we’re a team - 30 partners and other employees - whom I enjoy working with, and each of whom contributes his part."