MGMT 895-751

ISRAEL: VENTURE CAPITAL AND ENTREPRENEURIAL MANAGEMENT

Global Business Week | MBA Program for Executives

September 6-10, 2015

Faculty: Raphael (“Raffi”) Amit Professor of Management The Robert B. Goergen Professor of Entrepreneurship

Doug Collom Adjunct Professor of Management

Staff Member: Amy Hazen, Associate Director Location: ,

Dates/Times:* Sunday, September 6: 5:00pm – 9:00pm Monday, September 7: 8:30am – 6:30pm Tuesday, September 8: 8:00am – 6:30pm Wednesday, September 9: 8:00am – 6:30pm Thursday, September 10: 8:00am – 9:00pm *Specific times may vary as activities are scheduled Course Credit: 0.5 cu

Course Theme: Venture Capital and Entrepreneurship in Israel

In the last 25 years, Israel has gained prominence as one of the leading technology and innovation centers in the international community. With thousands of startups that flourish in the country today, Israel has more startups per capita than any other country in the world. Israel first achieved renown in the technology sector in the 1990s for its innovation in the semiconductor space, then moved heavily into software in the 2000s, and today is branching out into a range of sectors including: internet, mobile, big data, communication infrastructure, cyber security and defense technologies, enterprise software, agri-tech and health tech. As you might suspect, this growth faces a unique challenge; because Israel has a small domestic market, Israeli startups, by necessity, must look to international markets for growth.

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Course Objectives:

This class will highlight the globalization of venture capital and entrepreneurship and concentrate on entrepreneurial finance, product-market strategy, organizational issues, and business models of Israeli technology companies. The learnings will be based on (i) insights from leading VCs, entrepreneurs and government officials (ii) a range of readings and supporting industry facts to provide context for the technology environment in Israel and its relationship with the U.S., Europe, and the rest of the world; (iii) daily site visits to companies that will provide students with an opportunity to participate in a dialogue with the executives of the companies we visit.

Class activities will include short lectures; site visits to venture capital backed companies and incubators; and debriefing presentations by student teams. Site visits include different cities within Israel including: Metro Tel Aviv; , known for a range of technologies that emerge from The Technion-Israel Institute of Technology; Beer-Sheva, known for cyber security, agri- technologies and homeland security technologies; and , known for health tech, media and life sciences. Students will be expected to do the course readings, to participate in discussions and class debriefings and to write a paper related to Israel’s entrepreneurial community.

The class will be led by Professors Raffi Amit and Doug Collom, who teach MGMT 804 Venture Capital and Entrepreneurial Management as an elective course in Term 6 for the MBA Program for Executives, both in Philadelphia and in San Francisco. Raffi is the Robert B. Goergen Professor of Entrepreneurship and Professor of Management. Raffi was born in Jerusalem, Israel and is knowledgeable about Israeli technology and venture capital communities. Doug is an Adjunct Professor of Management. He spent over 25 years as a partner with a large law firm in Silicon Valley advising technology startup companies prior to joining Wharton.

Study Team Formation

Class assignments will be undertaken by study teams of up to 5 students per team. Study teams must be formed with team names submitted to the professors and Amy Hazen no later than Friday, August 21, at 5:00pm PDT/8:00pm EDT.

Each study team will be responsible for:

• Study and evaluation of a pre-designated Israeli company, assigned by the professors, prior to arrival in Israel. Each designated organization is one that we will visit. Study team members will be responsible for researching the background, industry and business model of the assigned company, and for leading the Q&A session immediately following the company’s presentation to our class.

• A debrief on the team’s assigned company to the class at end of the day (in some cases, immediately following the visit). Each debrief will consist of a presentation not to exceed 10-15 minutes in length and will focus on key observations and insights. Oral presentations without PPT are of course acceptable. Recall that there was learning going on before PowerPoint. 08/10/2015 2

Grading Criteria: • 45%: Final paper on a topic of your choice related to the course: 12-16 pages, double spaced, excluding tables, displays or references, using Times New Roman 12-point font, due no later than Friday, September 25, 2015 at 5:00pm EDT

• 25%: Individual participation in lectures, discussions, and company visits

• 30%: Preparation/briefing/debriefing work, by study team assignment, based on readings, lectures, and company visits

Required Reading:

Senor, Dan and Singer, Saul. Start-up Nation: The Story of Israel’s Economic Miracle. Twelve, New York, 2009.

Optional reading:

Drori, Israel; Ellis, Shmuel; and Shapira, Zur. The Evolution of a New Industry: A Genealogical Approach. Stanford University Press, 2013.

Please make every attempt to read these books before the start of the course. They will provide a solid context and important historical insights. These books will NOT be available at the Penn Bookstore.

Other readings are indicated in the syllabus below and will be compiled in a course pack. The course pack will be available on Canvas and Study.net.

Given the concentrated schedule that we will have while on the ground in Israel, it is highly recommended that you complete ALL of the required readings in advance of our trip.

Company Visit Etiquette:

This course will involve bus travel and a number of site visits to companies in some of the major cities in Israel. Please note the following:

• Please be exactly on time for our travel by bus. It’s important we stay on schedule—any stragglers will force the entire group to be late or will be left behind.

• Attire for class instruction and for all off-site visits is business casual (no jackets are needed). Be sure to bring and wear your silver Wharton nametag.

• Attendance at all lectures and site visits is required.

• Please be courteous and respectful at all times during the visits. 08/10/2015 3

• If you ask a question during the Q&A portion of the discussions with executive management of the companies and organizations we visit, please stand up first, state your name, and the company you work for. Speak clearly. Be sure your questions are thoughtful and germane to the presentation.

• Keep in mind that you are not only representing Wharton, you are also representing your class, the faculty and staff who have worked hard to put these visits together, and your country.

Logistics and General Reminders:

• Wharton Sponsored Hotel Nights: Wharton is covering hotel costs for six nights. You will have two options for reservation dates: Check-in on Saturday, Sept. 5, and out on Fri., Sept. 11; or check-in on Sunday, Sept. 6 and out on Sat., Sept. 12. Please be sure that whatever travel plans you opt for include the Sunday, September 6 afternoon session beginning at 5:00pm. You should plan to leave at least 2-2 ½ hours upon arrival in Tel-Aviv for time to pass through customs at the airport and travel to the Sheraton hotel.

• Breakfasts: Breakfast will be included each day at the hotel, as will high-speed internet. Lunches will also be provided on Monday-Thursday. Most nights you will be on your own for dinner.

• Thursday Departure: Students who seek to depart Israel immediately upon conclusion of the class and the Jerusalem walking tour may do so Thursday evening. U.S. bound flights depart after 11:00pm daily.

• Travel plans: Please share with Amy your detailed travel plans so that appropriate hotel booking can be arranged for you.

• Local currency: Conversion rate for U.S. dollars to NIS (New Israeli Shekel) is about 3.7 NIS/US$.

• Banks/credit cards: Don’t forget to tell your bank you’re travelling.

• International calls: Consider getting an international cell phone plan for the time you’re away.

• Passport/visa requirements: For U.S. citizens, a visa is not required for a stay of less than 90 days. The traveler must be in possession of a passport valid for 6 months beyond your stay and a round-trip airline ticket. For non-U.S. citizens, more information about visa requirements can be found on the Israel Ministry of Foreign Affairs website.

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ISRAEL: VENTURE CAPITAL AND ENTREPRENEURIAL MANAGEMENT Daily Schedule Sunday, September 6 through Thursday, September 10, 2015

Day 1: SUNDAY, SEPETEMBER 6 (Tel Aviv)

Session 1: Orientation and Class This session will include a course Greeting Introduction overview and updated schedule for the week. 5:00pm–9:00pm Course overview Prof. Amit will moderate a panel that Location: Speaker panel includes Dr. Orna Berry, Former Chief Sheraton Tel-Aviv Scientist of the Israel Office of the Chief Dinner organized by Scientist; Currently Corporate Vice Wharton President of EMC; and Zohar Zisapel, founder and Chairman of the RAD Group of companies and one of the most famous and successful entrepreneurs in Israel. Zohar was formally colonel (RES) in Israeli Intelligence Unit 8200 of the IDF and won the Israeli National Security Prize twice for making substantial contributions to the national security of the country. Both Orna and Zohar are featured in Start-Up Nation.

Dinner will follow to allow faculty and students to get acquainted. Spouses and significant others are invited to the panel and dinner.

Required Reading for Session 1: • Senor, Dan and Singer, Saul. Start-up Nation: The Story of Israel’s Economic Miracle. New York: Twelve, 2009.

Optional Reading for Session 1: • Drori, Israel; Ellis, Shmuel; and Shapira, Zur. The Evolution of a New Industry: A Genealogical Approach. Stanford University Press, 2013.

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Day 2: MONDAY, SEPTEMBER 7 (Tel Aviv)

Session 2: In- Industry Background Our first session will provide a class Lecture and Introduction comparative industry overview that will look at: Professors Amit and 8:30am–9:45am • An overview and brief history of the Collom venture capital industry in general Location: and its role in supporting emerging Sheraton Tel-Aviv growth companies

• The typical venture fund structure and investment terms; venture capital objectives and investment strategies; • The history and current state of the Israeli tech community • The significance of the Israeli tech community on the world stage • The unique relationship of this community with the U.S. • Industry and sector strengths in Israel Required Readings for Session 2: • Growth Strategies of Israel’s Burgeoning Medical Device Industry, Knowledge@Wharton, April 2014 • “Israeli Startups are Attracting Investors to its Tech Boom,” by Brett Relander, Investopedia (2015) • “Israeli Startups Raise Impressive $994 Million in the First Quarter of 2015,” by NoCamels Team (April 28, 2015) • PowerPoint: Israel Innovation System and the OCS, Office of the Chief Scientist • “The Best is Yet to Come for Israeli High-Tech,” Israel21c (May 3, 2015) • “Venture Capitalists,” Chapter 9 in High Tech Start-Up: The complete handbook for creating successful new high tech companies, by J. Nesheim (2000) • “What Makes Israel a Hotbed for Startups?” by Yon Yekutiel, Entrepreneur.com (September 19, 2014) • “Why Is the Israeli Startup Ecosystem One of the Most Dynamic in the World,” by Valerie Zarka (November, 14, 2014)

Break 9:45am – 10:00am

Session 3: In- Startup Company Panel moderated by Prof. Amit with class Lecture Fundamentals Amon Yacoby, entrepreneur and colonel (RES) in Israeli Intelligence Unit 8200 of 08/10/2015 6

10:00am–12:30pm Professors Amit and the Israeli Defense Forces; and Eddy Collom Shalev, Founding General Partner at Genesis, an active and experienced investor in Israel with an innate interest in Study Team #1 continuing to mentor entrepreneurs to building great companies.

Readings for Session 3: • “Don’t Build Your Startup Outside of Silicon Valley,” Harvard Business Review (October 23, 2013)

Lunch in Main Dining Room 12:30pm–1:30pm

1:30pm: Travel to Ramat Hayal – A district of Tel Aviv

Session 4: Site Argus Cyber Security Argus Cyber Security Ltd. is a security Visit #1 Ltd. pioneer in the automotive industry, founded by veterans of Israeli Intelligence Unit 8200 and backed by major figures in Study Team #1 the Israeli industry. Argus incorporates both innovative security methods and proven communication networks practices into comprehensive solutions, enabling OEMs to keep up with ever advancing automotive connectivity without compromising on security. Argus focuses on multiple aspects in its solutions, detecting unauthorized access, securing remote connectivity, reporting irregularities and keeping up with new threats as they emerge.

In addition to several ARGUS executives, Yoram Oron, Founder & Managing Partner at Vertex Venture Capital Israel, will participate in this session. Yoram led the Series A syndicate investment in Argus. 5:30pm–6:00 pm Study Team Debrief for Team #1

Housekeeping and Announcements for the Next Day Dinner and Social Activity on Your Own

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Day 3: TUESDAY, SEPTEMBER 8 (Haifa: Technion- Israel Institute of Technology)

8:00am–9:30am: Travel to Technion - Israel Institute of Technology

Required Readings for Session 5-9: • Frenkel, A., Maital, S., & Debare, I. (2012). Technion Nation: Technion's Contribution to Israel and the World. Haifa: Technion-Israel Institute of Technology. • Israel Advanced Technology Industries, Israel’s Life Sciences Industry IATI 2015 Report Session 5: Site Technion Technology T³ is the technology transfer office of Visit #2 Transfer T³ Technion - Israel Institute of Technology. Its task is to open the doors to innovation, 9:30am facilitating the passage of new ideas to Study Team #2 successful products and companies in world markets. As part of Technion Research and Development Foundation Ltd. (TRDF), T³'s success in bridging between the laboratory and the marketplace has been critical in affirming Technion's position as a global pioneer of innovation. Benny Sofer, T3 CEO will address the class.

Rafi Nave is the inaugural director of the Technion-wide Entrepreneurship Center, a new interdisciplinary unit designed to leverage the Technion's expertise in innovative technologies and applications through research and hands-on education. Most recently he served as Senior Vice President of Research and Development at Given Imaging Ltd., the world leader in non-invasive gastrointestinal tract diagnosis. In that capacity, he headed the development and delivery of the PillCam video-capsules. Rafi will present and discuss Given Imaging with the class.

Session 6: Site Accelta Accelta will market technologies that will Visit #3 enable commercial companies and research laboratories to culture masses of Study Team #2 08/10/2015 8

homogenous stem cell lines in a fast and cost-effective manner.

Founders present and discuss the company.

Session 7: Site Sealantis Sealantis develops innovative products Visit #4 based on a proprietary platform of alga- mimetic tissue adhesives, for a variety of Study Team #2 applications and clinical needs in surgical adhesion, leakage control, adhesion- prevention and drug delivery. The Sealantis adhesive technology mimics the underwater adherence mechanism of algae, providing it with a superior ability to stick to tissues and grafts even in a wet environment. The adhesives are bioresorbable and are protein-free, eliminating protein-related risks.

Founders present and discuss the company.

Session 8: Site Applied Immune Applied Immune Technologies (AIT) is a Visit #5 Technologies drug development company specializing in T-Cell Receptor-Like (TCRL) antibodies that are targeted to intracellular-derived Study Team #2 peptides for a variety of therapeutic and diagnostic applications. AIT is also focused on identification and validation of novel therapeutic targets. The company’s vision is to develop highly specific 3rd generation antibodies that will revolutionize the fields of cancer, viral, and autoimmune diseases, as well as other targeted immunotherapies.

Founders present and discuss the company.

Lunch On Campus 1:00pm–2:00pm

2:00pm: Travel to Site Visit

Session 9: Site InSightec Jackob “Kobi” Vortman, CEO, Founder Visit #6 and Chief Technology Officer of 08/10/2015 9

InSightec, founded the company in 1999. Study Team #3 Under his leadership, InSightec developed and marketed its Magnetic Resonance guided Focused Ultrasound (MRgFUS) technology and received CE mark in Europe and US Food and Drug Administration approval for its technology.

Study Team Debrief Teams #2 & #3

6:00pm–6:30pm: Estimated arrival at the Sheraton Tel Aviv

Dinner and Social Activity on Your Own

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Day 4: WEDNESDAY, SEPTEMBER 9 (Beer-Sheva)

8:00am–9:30am: Travel to the Beer-Sheva

9:30am Welcome and overview by Rubik

Session 10: Incubit Technology Incubit Technology Ventures is a 10:00am Ventures technology incubator located in Beer- Sheva and is part of the OCS incubator Site Visit #7 Study Team # 3 program. Incubit, a fully owned and backed by Elbit Systems Ltd, is the first Hi-Tech industry backed incubator.

Haim Rousso of Elbit and Ran Bar-Sela CEO of Incubit to address the class.

Presentation by a portfolio company founder.

Session 11: Deutsche Telekom Professor Yuval Elovici, General 11:30am Manager, Director of Telekom Innovation Laboratories at Ben-Gurion University to Site Visit #8 Study Team #4 address the class.

12:15pm Cyberark Roni will address the class

Study Team # 4 Session 12: Capital Nature Capital Nature is a leading investment 1:00pm firm focused on funding and accelerating early stage ventures, as well as academic Site Visit #9 research in the emerging Renewable Study Team #4 Energy in Israel. In addition to incubating early stage start-up companies, Capital Nature also funds applied academic research in the area of renewable energy, and operates a test and validation center in the Eilot region.

Capital Nature was established in 2011 and operates the Israeli National Renewable Energy Center in the Arava, as part the initiatives of the State of Israel to promote development of Renewable Energy technologies.

CEO will address the class. 08/10/2015 11

Lunch 2:00pm – 3:00pm

Session 13: Netafim Founded at a time when Israel aimed “to 3:30pm make the desert bloom,” Netafim has been a leader in global agricultural Site Visit #10 Study Team #5 development since its founding. Always growing and diversifying, Netafim integrates a rich legacy with down-to- earth rural values and cutting-edge agronomic and technological expertise to lead the way in drip and micro-irrigation solutions worldwide.

Company executives will address the class

4:30pm–5:30pm Study Team Debrief Teams #3, #4, and #5

Housekeeping and Announcements For the Next Day

6:30pm: Expected return to Tel Aviv

Dinner and Social Activity on Your Own

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Day 5: THURSDAY, SEPTEMBER 10 (Jerusalem)

8:00am–9:30am: Travel to Jerusalem (Note: Those who depart on Thursday will check out and load their luggage onto the bus in the morning.) Session 14: The JVP Media Beautifully situated in the heart of 9:30am Quarter & Yissum Jerusalem's "Cultural Mile", the JVP Media Quarter gives expression to the vision of fusing technology, creativity and Study Team #5 social action in one exciting complex. The JVP Media Quarter is the brainchild of Erel Margalit, the founder of Jerusalem Venture Partners ("JVP"), a leading Israeli venture capital firm with over $900 million under management, through seven venture capital funds, and a twenty year track record in Israel and international markets in building and successfully exiting world class media technology companies.

Yissum is the technology transfer company of the Hebrew University of Jerusalem. It is responsible for marketing the inventions and know-how generated by the University's renowned researchers and students. Working Lunch Organized by Wharton • Study Team Debrief: Team #5 • Class Wrap-up and Conclusion: Professors Amit and Collom

Guided Walking Tour of Old Jerusalem Guide: Tamar Hayardeni Organized and Sponsored by Wharton 2:00pm – 5:00pm

Light Dinner

9:00pm Airport drop off and bus returns to hotel in Sheraton Tel Aviv Final paper due no later than Friday, September 25, 2015, at 5:00pm EDT. The paper should select and discuss a key topic relating to Israeli entrepreneurship and innovation, whether at the company- or industry-level, based on the companies and speakers in our class. Papers will be graded on the basis of depth of insights and observations, lessons learned, analysis of strengths and weaknesses of the Israeli tech community, and basic writing fundamentals for an essay of this nature.

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