Nacht: Israelis still see the medical sector as risky

Marius Nacht, photo: Tamar Matsafi

"Entrepreneurs in the medical sector want to build sustainable companies, not make a quick exit, " Marius Nacht told the EY Israel "Globes" Journey 2019 conference in Tel Aviv.

Recruiting employees dedicated to the goal, suitably qualified, and looking towards the long term is the biggest challenge for a young company in Israel today, a panel on the subject of entrepreneurs and economic opportunities held yesterday at the EY Israel "Globes" Journey 2019 conference concluded.

The panel participants were Check Point cofounder and leading investor in aMoon Marius Nacht, Mellanox founder and CEO Eyal Waldman, Credit Suisse investment banking and capital markets, Americas head David Wah, and Lihi Segal, cofounder and CEO of DayTwo, which developed and markets a system for making nutritional recommendations, based on the bacterial composition in the intestine. The panel moderator was Credit Suisse managing director and chairman of IWM strategic client partners Babak Dastmaltschi.

Nacht said, "Entrepreneurs of companies in the health sector are more suitable for the long term. They study for 12 years before even beginning any innovation in this area. They are not young veterans of IDF Intelligence Unit 8200 who already want to start something independent, sell it, and move on. In the medical sector, entrepreneurs work at a company for another 12 years after their studies and specialization, until they see results. These entrepreneurs are more to my taste; they want to build sustainable companies."

Dastmaltschi asked Nacht why he had to intervene and raise a venture capital fund for the medical industry in Israel, and why there would not be enough venture capital activity in the sector without him. Nacht answered, "This sector differs in the availability of capital from the high-tech sector in Israel, in which there is no shortage of capital. The entire world knows ab out the high-tech sector in Israel. Apple has a huge R&D center in Israel, as do Microsoft and most of the world's leading companies. The medical sector in Israel is still regarded as risky - a binary gamble. The main shortage of capital is in the later stages, so companies conduct offerings prematurely, aren't very marketable, and can't raise capital on the stock market the way that they should. If they don't make early offerings, they are liable to be sold too soon. We therefore mapped this stage as the right place for us to invest in these companies, also because the technology is becoming important in health, perhaps even more so than in biology. Today, with billions of dollars being managed, aMoon is one of the leading funds in Israel. It is definitely the biggest in the medical sector and one of the biggest in Europe."

Wah said, "At the current conference, I saw more gender diversity than in any other conference in the sector that I have experienced. I think that it's very important to include women employees and managers in the sector. Today, technology is relevant to all sectors and all products, so diversity in personnel is very important."

Waldman commented, "In our sector also, you need at least five years to sell and be profitable, and decades in order to really build a company. In my opinion, it's important for the founding manager to remain the company's CEO. That's how it was at Check Point, Nvidia, and also at Microsoft and Apple with Bill Gates and Steve Jobs. To replace a CEO in the middle of the growth process is traumatic, and less than half of these changes are successful. Be patient and do mentoring. An entrepreneurial CEO is usually a pretty smart and ambitious person, and he can learn. Shape continuity in the organizational culture and in goals."

Nacht agreed, but noted that from his talks with venture capital funds, when a manager is fired, the funds usually claimed that they did it two years too late.

Waldman said that the entire founding team remained in the company over 15 years, and that many senior and junior employees also remained in the company for this length of time.

Published by Globes, Israel business news - en.globes.co.il - on September 19, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Marius Nacht, photo: Tamar Matsafi
Marius Nacht, photo: Tamar Matsafi
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