Billions Flow Between Israel and Silicon Valley

January 30, 2009

Gal Hoffman, an associate in Fenwick & West's corporate group, is quoted in the Silicon Valley Business Journal article "Billions Flow between Israel, Silicon Valley."

While they are far apart geographically, Silicon Valley and Israel have a similar appetite for risk-taking and entrepreneurial thinking, and they are making high-tech cross-border operations more attractive to investors, startups and established companies.

Over the past 20 years, Israel has experienced tremendous growth in its high-tech industries. The Institute for Study of Entrepreneurship and Management of Innovation estimates that the country's startups number 3,000, and it ranks second to the United States in the number of NASDAQ-listed companies. The Israel Venture Association states that venture capital investment in Israeli companies topped $2.08 billion in 2008.

Israel boasts about 40 domestic funds today, said Gal Hoffman, an Israeli-born and trained corporate lawyer practicing in Fenwick's Mountain View Corporate Group.

"What you have to keep in mind is that a major source of money in those Israeli funds is from the United States," said Hoffman, whose practice encompasses VC financing. "The relation is very strong if you look at venture capital investment. Whether or not it's an Israeli fund or a U.S. fund, a large amount is coming from U.S. institutional investors."

High-tech giants such as Google Inc., Hewlett-Packard Co., Microsoft Corp., Cisco Systems Inc. and Intel Corp. have also opened operations in Israel.

"I can't think of one major U.S. player in this field that doesn't have an R&D center in Israel," Hoffman said.

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