Yair Safrai, formerly with the Concord Ventures venture capital firm, and Cecile Blilious, who managed the Israeli activity of Dutch social fund the Noaber Foundation, are working to set up Impact First Investments, an Israeli social venture capital fund. The fund will seek to raise $25 million.
Blilious: "The aim is to invest in companies that have both business and social potential. We want to return the money to the investors, and hope that we will also make a profit for them, but this is not the factor we seek to maximize. We are interested in maximizing the social impact of the companies in our portfolio. We have the instruments to measure this, quantitavely and qualitatively."
Blilious says that the difference finds expression both in the selection of the companies, and in the way their futures are planned. "We don't necessarily aspire to a huge exit in a short time; we will also be happy with companies that set up manufacturing activity in Israel and return the money to us gradually."
The fund proposes a different compensation model. "We won’t take 20% of the profits from an exit, as is customary for a venture capital fund, but only management fees, at the normal level for funds."
Investment in the fund is not tax deductible. "The investors who have approached us so far are people whose vision coincides with ours business activity that is also beneficial to society." As yet, there is no official commitment on the part of investors, but Blilious estimates that the fund will make a first closing shortly.
As for the companies in which Impact First is interested, they are such as do not stand a great chance of raising capital from a regular venture capital fund, but Blilious does not rule out the possibility of bringing them to a point at which they will be of interest to commercial funds. "They could be from healthcare, cleantech, support for people with disabilities, as long as they have potential for wide international impact. For example, software that does simultaneous translation of voice to text for the deaf, or a chip implanted in a tree that tells you how much water the tree needs, to prevent water being wasted."
Blilious and Safrai are partners in the fund together with Dr. Yoav Ben-Dror, who is chairman of several companies, among them Radiancy and Dagon Batey-Mamguroth Le-Israel, and was also involved in several of the companies of the Shlomo Ben-Haim and Lewis Pell group that were sold for hundreds of millions of dollars. "Because of our social activity, we receive a great deal of voluntary help, or at prices that we can afford, for example from Ernst & Young and from the Horn & Co. law firm. We hope that that the state too will understand that it is worth supporting this kind of fund," says Blilious.
Published by Globes [online], Israel business news - www.globes-online.com - on August 22, 2012
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