August 17, 2019

Jonathan Medved on the Secret of OurCrowd’s Success

Jonathan Medved

Serial entrepreneur Jonathan Medved, 63, is the founder and CEO of OurCrowd, the world’s largest equity crowdfunding platform. Since its launch in February 2013, OurCrowd has reached committed funds of over $1 billion and allows accredited investors (under U.S. law, those with an annual income of $200,000 or assets of $1 million outside of their primary dwelling) to invest in startups. To date, OurCrowd has raised funds for more than 170 companies. In May alone, OurCrowd portfolio company Beyond Meat became the first venture-backed “meat alternative” company to launch an initial public offering (IPO) and Zebra Medical’s artificial intelligence-based, chest X-ray triage product was approved by the U.S. Food and Drug Administration. The Journal spoke with Medved about the role of investors in today’s Israeli startup scene.  

Jewish Journal: How is OurCrowd different from traditional venture funds?

Jonathan Medved: In the old days, if you bought Apple or Amazon at IPO and sold it, you could make a thousand times your money. Today, it’s when you invest at an early stage. But it’s controlled by a small group of venture capital funds and investors and the average person is left out. … unless you use a solution like OurCrowd you can’t [invest in these companies]. OurCrowd is a larger and more innovative structure. Other VC (venture capital) firms take[only] minimum checks of several million dollars; in a venture fund, you don’t pick the deals — venture managers find companies and negotiate terms and deploy your money. We let the individual build his own portfolio: Zebra Medical doing AI (artificial intelligence) driven analysis of radiological images; Skytran developing a next-generation flying car system; a Tevel [Aerobotics Technologies] automated fruit-picker. For a $10,000 check, [accredited investors] get the ability to invest in the same deals alongside Bill Gates and others. 

JJ: Why should people invest in Israeli startups? 

JM: Because you can make money. And today it’s important for everyone who has funds to have exposure to private startup companies. But to do so in Israel [means] participating in the most important part of Israel’s economy, tackling global challenges — water, energy, air, health, education, financial inclusion — and that’s a good thing. It’s building Israel’s ties with the rest of the world, and making the world interdependent on Israel. That’s what the Jewish state was set up to do: not just to serve as a safe home for Jews but as a place where Jewish civilization could take a leadership role based on our courage, our daring, our chutzpah and our brains. That’s really what the whole Startup Nation is about.

JJ: How does the Israeli-Palestinian conflict impact Israeli startups or other investments in Israel? 

JM: Not in the least and it never has had an impact. There’s no market in the Palestinian Authority and there is great interest in Israeli tech from the Arab world. The boycott has been a total failure. There are sad people like (rock musician) Roger Waters who need to get a life. But among business people, it’s not an issue. [The conflict is] not on the radar of companies that count. It’s simply impossible to boycott Israel, considering the almost 500 multinationals that operate in Israel. While it’s important to seek peace — and sometime in the future we will get peace — the situation for Israel and its position in the world has never been better. 

JJ: Are there startups that are working on products or solutions that could pave the road for peace? And if so, how does OurCrowd support them? 

JM: Some of our companies are employing people in the Palestinian Territories; some companies are looking to employ Israeli Arabs. We need to hire more Arab engineers, Charedim, more women. That’s a worldwide problem. Peace will come when people want to make money and work together rather than kill each other. So almost every Israeli company is part of the peace process. … Israel has lots of issues, whether it’s with the Palestinians or with Jews of different religious beliefs; we have lots to work on, but bottom line: what a success. 

JJ: According to the OurCrowd website, the 2019 OurCrowd Summit in Tel Aviv had more than 18,000 attendees. Could you share some highlights from those events?

JM: Just seeing masses of investors from the entire world flock to Israel was a blessing. Thousands of people came, especially from overseas, to share in the Startup Nation, especially in today’s world with tragedies like Poway and Pittsburgh (shootings). … We live with BDS [boycott, divestment and sanctions] and hate: To see that it’s not the whole story, that there are many places in the world where Israel is admired, and many people who admire Jews, it’s pretty exciting to be part of that. They come because they want to change the world for the better: To support UPnRIDE, helping to get disabled people upright, to enable a disabled person to stand under the chuppah; to back Climacell (weather forecasting technology) and help provide for the first time cutting-edge weather data to Africa, to fund Sense Education (an artificial intelligence solution for student submissions and automated testing) enabling countless students to learn and get ahead. So many of our companies will really make an impact on the world. To see them and the reaction of the mostly non-Jewish crowd from abroad was a wonderful thing. 

JJ: What trends are you seeing in the Israeli startup scene today? 

JM: Artificial Intelligence is clearly the center of what’s going on now. Every industry will be disrupted. If you look at data from Forbes as to how many startups [there are] per country, it’s the United States,
China and Israel. (A 2018 Forbes article said Israel has the “largest number of startups per capita in the world, around one startup for every 1,400 people.”) When people look at that, it’s just bizarre how Israel with our small size has not just startups, but that we go to the moon, even if we didn’t land there softly. The fact is that we have an extraordinarily good defense system, like Iron Dome to protect us. We rank high in happiness. (In the 2019 U.N. World Happiness Report, Israel ranked 13th on the list of happiest countries.) This country of ours is a crazy, rough-and-tumble, wonderful democracy where people argue freely and then vote … we have a huge amount to be proud of.