BDO in first partnership of its kind, providing guidance and financial support to initial-stage Israeli start-ups seeking to penetrate the US market
“Israeli tech companies have a major advantage thanks to their multidimensional thinking - an important value in growth of the cross-industry ventures we are seeing around the world”.
As part of BDO's Tech Week events, global experts in BDO network came together to discuss the value offered by Israeli tech companies and the challenges of the global markets: the session was hosted by two senior global BDO executives, Scott Rodie, Leader of BDO’s Global Technology, Media & Telecommunications (TMT) team, and Tony Spillett, Head of Technology and Media and BDO UK, along with Brian Mac Mahon, founder of the accelerator, Expert DOJO.
The announcement of the first partnership of its kind between BDO, the law firm of Pearl Cohen and accelerator Expert DOJO, which is based in Los Angeles, was made as part of BDO's Tech Week events. Thanks to this collaboration, 20 initial-stage start-ups will receive professional and financial support of up to $100,000 for exposure to the US market. As part of the partnership, 20 leading initial-stage start-ups are being recruited.
The program objective
Tomer Nitzan, Presiding Officer of the US-Israel Desk at BDO, said, “The objective of the joint program, which is now being presented for the first time, is to build a bridge that will enable innovative technologies from Israel that are just getting started to break through to the United States. The program was borne out of the recognition of the gap between the good ideas local initial-stage start-ups have and the tremendous potential they promise, and the limited ability to succeed in foreign markets and, specifically, the US market. That is why we are offering our experience and strengths as an international firm, along with the finest legal counsel, and professional and financial support from the US through a comprehensive service that will enable start-ups to thrive and succeed in the United States.”
“Work fast like sprinters, but prepare to run a marathon”
The session was hosted by two senior global BDO executives: Scott Rodie, Leader of BDO’s Global Technology, Media & Telecommunications (TMT) team, and Tony Spillett, Head of Technology and Media and BDO UK.
Rodie addressed the value of Israeli tech companies and related to the challenges they face in global markets. “We recognize that Israeli tech companies have a major advantage, thanks to their multidimensional thinking - an important value in growth of the cross-industry ventures we are seeing around the world. If we take the cannabis industry, which is currently in the spotlight, it combines technological innovation with agriculture. Israel has a great deal to contribute in those areas.
However, if we look at the global market, we find that the major question marks are focused on human aspects - how to build a quality team around a concept, given the shortage of talent, or what story we need to tell to attract people and create leadership. We need to understand that investors pay very close attention to leadership ability. They want to know not only what you are doing, but also why you are doing it. What is your vision for the future? It is an indication of your ability to attract talent and customers.
I believe that the key to success is to work quickly, like sprinters, but prepare to run a marathon. To focus, plan and build milestones for the future, but to do so without missing the opportunities along the way.”
Spillett discussed how to relate to the UK market and how this impacts on penetration of global markets. “The UK market beckons numerous start-ups that identify the opportunity inherent in establishing themselves in the UK - penetration is relatively easy, significant networking advantages and the access to remote markets. However, we frequently see a desire to locate in the UK as a quick springboard to remote markets in the East or the United States. While this line of thinking is logical, it misses the opportunity proximity to important markets in Europe offers.
The time component is one of the greatest challenges. This challenge is put to the toughest test, as the aspiration to penetrate foreign and remote markets grows. In these cases, it is important to work with local teams that provide local support and highly valuable information, followed by the need to invest time and abilities in creating integration between the teams.
On the other hand, there are success stories, when a decision was made to pass on markets that offer strong potential, but have a high penetration barrier, in favor of markets where penetration is easier, such as English-speaking markets. At the end of the day, these ventures made the right move, and this should be taken into account.”
Brian Mac Mahon, founder of the accelerator, Expert DOJO, said, “The familiarity and experience I have gained from working with Israeli start-ups has taught me about the significant differences between them and their American counterparts. US entrepreneurs invest a great deal of energy in branding and marketing, a shiny veneer covering a mediocre product in the best cases, which leads to failure in the end. Israeli entrepreneurs do the exact opposite. They build something incredible right from the beginning, but most fail when it comes to branding and understanding of the US market. As the connection between us and BDO and Pearl Cohen is natural, and we are able to leverage our experience with the US market to put the missing pieces into place for the incredible ideas that grow here.”
Darie Ofek, Partner, Pearl Cohen, said, “Our unique work as an Israeli-American firm enables us to see the big picture, to be familiar with the ecosystem in each place and, naturally, the US market is a dream market for all start-ups. Our offices in LA provide us with up-close familiarity with what is going on in Palo Alto and the ability to help Israeli businesses reach, grow and succeed in the US. The potential for doing so is great thanks to the thriving market in the United States, the reputation Israeli technologies have earned, and the value they bring with them - Israel has well-established deep tech that is poised to respond to what is lacking in the local ecosystem. In recent years, we have experienced impressive growth in Israeli ventures on the West Coast, and we can even see this in the growing amount of Hebrew we hear in the high-tech centers in the region. That is why, together with our partners, we have reached the understanding that there is actually a tremendous opportunity for initial-stage start-ups to develop in the US market.”
BDO TECHWEEK 2019