"For the fresh entrepreneur, raising the initial money seems a particularly difficult problem, but it’s important he should know that this is just the start," said Israel Multimedia Forum general manager Ran Zamir, who promotes investments and partnerships between Forum members. "You come all aglow with a business plan, convinced you have the cleverest thing in the market. But it turns out that, just at that stage, there are no sources of finance."
"True, there is the Fund for Encouraging Small Businesses, but it does not provide working capital. The Chief Scientist supports development, but not if you deal in distributing titles or building commercial Internet sites. In such cases, it is almost certain that you will not receive aid."
"Many entrepreneurs succeed in crossing the threshold by raising money from private sources, or bring the cash home after breaking saving schemes or taking a mortgage, or else they touch family and friends for the money. At this stage, your head is in the computer screen, and nothing interests you besides the project."
Emanuel Greengard of SGH volunteers a piece of advice for this stage: "Your first investor is closer than you think - its your bank. You have to earn the trust of the people who make decisions in the branch. Put them in the picture, and keep them informed. The branch manager has the authority to let you have flexible sources of finance. They are, indeed, based on your resources, but at the outset, these are the only sources available."
Greengard: "It’s important to have a realistic target for which to use the money raised. At this stage, the target must be precisely marked out, or else the money and the entire project will go down the drain." Quarter Multimedia general manager Meir Levy: "The seed money needs a well defined end-product: a business plan, and working product, a demo, in short - something tangible, to give the next investor a sense of a genuine product."
All the participants agreed that an entrepreneur at the start-up level has to get hold of the money quickly. In the initial stages, this is of decisive importance. In this respect, the situation of the Israeli entrepreneur is extremely unfavourable: in the USA, one venture in ten, or less, succeeds, while here the success rate is one in twenty.