Part 2 of 2: Successful recruitment of startup employees: most definitely possible mission

In the 1st part of “Successful recruitment of startup employees”, we discussed about how to properly manage talents’ recruitment process by 3 key guidelines for recruiting employees:

  1. Marketing the job to the candidate and creating value for a candidate to choose you.
  2. Management of a precise and fast recruitment process.
  3. Creating an experience for the candidate.

In this part we will discuss about how do we begin? (Or: Ways to reach all these talents?)

Recruiting team members call this “Developing Recruitment Sources” – and this is a complete theory that we can elaborate on much more. Nofar Gotlieb, our recruitment manager, summarized for us the most effective recruitment sources:

  1. A Friend Brings a Friend – True, it’s no secret that employees are our best ambassadors (especially when they are happy in their jobs), but you can manage it properly and make it the most effective and fast source for you. It begins with the employees knowing that you are recruiting. They need to know the open positions and share them on their networks, groups and forums. Many times it is a friend of a friend or someone who was with them in school. You should also clarify with whom they should share CV submitted, and if you share with them feedbacks throughout the recruitment process, it will enable them to feel meaningful in recruiting their friends – and they will bring many more. According to Nofar, our recruitment manager, your employees can also help you market the position or tell you if the candidate is hesitant and why, and by doing so you will be able to create a more successful dialogue with the candidate, one that will lead to signing a contract.
  2. Professional Communities – the best people aren’t really looking for a job. But if they hear about a really attractive job – they’ll consider applying for it. Make sure you are present in the professional communities and networks relevant to the profiles you are looking to recruit (these can be found everywhere – LinkedIn, Whatsapp groups, Facebook, GitHub, Meetup, technological forums, etc.), and make sure to advertise the positions in an way that will attract them to get in touch with you personally, and this does not have to be a prize.
  3. Investing in marketing and employer branding – even if you are a small start-up. Most start-ups emphasize recruiting developers, and usually postpone recruiting marketing team members for a later stage. This is the typical situation, but it is not necessarily the proper situation, since it is better to start establishing the brand from the very beginning of the start-up, even by hiring a part-time or per hour marketing consultant. Building the brand right from the start helps to attract worthy employees who want to take part in a well-known start-up that has good growth prospects. Therefore, it is better for the entrepreneur to position the start-up from the early stages by using the various media, lecture at appropriate conferences and take an active part in the relevant communities.
  4. Employment agencies and Head Hunters – specialize in developing recruitment sources and they can save you valuable time by screening irrelevant CVs. Work with 2-3 companies that you trust to create value for you, and they will make sure you receive a pipe of candidates. Make sure to provide them feedback if a candidate is unsuitable so they can refine the search and pinpoint the next candidates they deliver to you.

So, what do talents want? (Or: Money is not everything)

In an ideal world, you would recruit, invest in and nurture employees and they would stay with you for many years. In reality, things are quite different. In high-tech, the average employee’s turnover is one year and 9 months.

We tried to characterize the key features that attract the talents to the leading companies in the economy:

  1. Professional Challenge – Working with super advanced technologies, working on a product that has a significant contribution to the community, professional challenges across different interfaces, enabling employees to feel that they are part of the technological and business vision, and if the startup succeeds, they can be partners of the Exit or they can advance fast both in respect to the position and the pay.
  2. Good working relationships – In the reality in which we spend most of our time during the day in the workplace, it is important to create a pleasant working environment and good relations with co-workers. Make sure you recruit pleasant people who will enrich the various teams, encourage team building, knowledge sharing and social gatherings while working. (The best part is the Happy Hour)
  3. Professional Development – Allow your employees to take courses that interest them, test new technologies, bring new ideas, produce a discourse, and make them feel that they are advancing and have influence.
  4. Work-life balance – The most common approach today is that there is an understanding and acceptance that the personal life of the employees are important and it is important to let them incorporate them with the work, as the assumption is that an employee who has the opportunity to invests in his or her personal life will be more meaningful to the organization, and will experience less burnout.

Organizations that allow flexible hours and on and off work from home – manage to attract more candidates.

  1. Salary – it’s true that the salary is important, but that’s not everything, so it is at the end of the list. Most candidates rate the salary relatively low, provided of course that the other terms are realized.

 

What convinces good employees to stay with a start-up? (Or: How to create employee engagement?)

Every organization wants its employees to be connected to the vision, the work, the product, and the culture of the organization. 

If you give room to the following three cases, you will succeed in strengthening employees’ sense of connection, which will also lead to a situation where employees choose to stay in the organization for a long time:

  1. Creating a sense of meaning – The more connected the employee will feel towards the organization, the more meaningful it will be for him or her. You can create a sense of meaning among employees by showing appreciation, whether verbally, by providing financial reward, consulting on important issues and listening to what they have to say. The more meaningful his or her role is in the organization, the more it will include significant interactions during the work day – the greater sense of meaning he or she will feel.
  2. Good communication with the direct manager – A good, respectful and fair relationship, which includes the opportunity to learn professional matters from the manager, is one of the important things in creating a sense of connectedness to the organization.
  3. Connecting to organization’s values – Connecting to the organizational values, vision and strategy, will create a sense of belonging. Listen to your employees, hear what is coming from the surface, and connect them to your values. This way, the employee will become an inseparable part of the organization while engaging in his or her personal contribution to the final product.

Glassdoor US recruitment website, recently published the results of a survey of 5,000 employees in four countries: USA, UK, France and Germany. The survey found that 77 percent of the participants in the survey take into account the workplace culture before applying for a certain position and 56 percent said that the company culture is more important than the salary in the context of job satisfaction.

 

In conclusion, recruiting talented employees to start-ups is a complete Theory. It is important to be focused, on the process and act quickly. Recruitment experts, us included, can help you make the process more precise, maximize it, and help you succeed in recruiting the talents you are looking for.
Remember that every candidate who met your product becomes your ambassador at the end of the process. Finally, make sure you recruit the best, and that the candidates you interviewed leave with a good taste and a wish to continue.

 

 

* Prodware Israel is the Israeli operations branch of the global Prodware Group. It helps organizations reinvent themselves in the era of digital transformation. It is a key player in the global IT industry.

Prodware has also collaborating with Brooks-Keret Company, and together they provide employee placement and outsourcing services with specialization in start-ups. Additional information is available on Prodware Israel website.

 

This Article Was Written By Keren Tirosh, VP of Human Resources & Nofar Gottlieb, Recruitment Manager Of Prodware – Israel.

Contact them at ktirosh@prodware.co.il or ngottlied@prodware.co.il

 

SOFTWARE: TO PATENT OR NOT TO PATENT?

When developing technology, especially in the Hi-Tech field, the question arises as to whether the technology development should be patent protected. The short answer is yes. The longer answer is more complex, and involves several considerations, including the limited financial and human resources startups usually have.

One should bear in mind that patent protection starts with filing a patent application, which is a business tool in its own right, and which should be undertaken in the initial stages of the startup. Entrepreneurs often hold some common misconceptions of patent protection, specifically for software related inventions. This article addresses some.

 

  1. Can software inventions be patented?

 

If the software invention involves a technological solution to a technological problem, then the answer would be yes. Many areas, such as Big Data, machine and deep learning, cybersecurity and Blockchain, concern a technological solution to a technological problem, and hence can be patented (provided that the application meets the other legal requirements). It may become more challenging if the invention is a simple application which does not involve a complex technological solution. Protecting software inventions and products with patents is considerably important given the potential ease it takes to develop a competitive product, once it gets published.

 

  1. Can apps be patented?

 

The criteria for patenting software apps are not different from those relating to patent protection for other software products. For simple apps that do not address any technological problem, obtaining patent protection will be challenging (most apps are indeed not patented).

 

  1. Are there other non-patent ways to protect apps?

 

Yes, through design copyrights and trade secrets. New UI designs can be protected by designs, alongside patents. Such protection is of great value in apps where users develop UI dependency, which reduces the switching to a competing app. The software code itself is protected by copyright, yet not the algorithm. Along with the above, some technology aspects may be kept as trade secrets.

 

  1. Applying for a patent is a great financial expense. The limited financial resources should be invested on technology development

 

Patent filing is friendly in cash-flow management terms. The first application involves a relatively low initial expense. This first application can serve as a basis for obtaining patent protection around the world. In a one year term, one has to decide in which countries to file the patent application. Using international filing route, this decision (and costs) are postponed for an additional 18 months, without losing the rights of the first filed date.

 

  1. Once investment is obtained, part of the investment will fund the patent application

 

The risk: Exposure to investors eliminates patent protection. One of the requirements to obtain patent protection is that the technological invention was not published. Any advertising, including prototype distribution, or pitching to an investor, could rule out any possibility of patent protection. Applying for a patent allows the technology to be disclosed with low concern.

 

In many cases, an investor wants to ensure that a patent application has been filed for the innovative technology in order to avoid investing money in a venture that can easily be copied by competitors. A patent application indicates the serious commitment of the startup founders.

 

Yet another consideration concerns collaborating with companies. In many cases, the startup develops a complementary product to a product developed by a multi-international company, resulting in collaborations with the multi-international company. Protecting the technology with a patent application guarantees that the rights on the technology belong to the startup and reduces the risk that the multi-international company avoids the collaboration with the startup, and invest some of its available resources to develop a competitive product.

 

  1. Technology is constantly changing; why should it be protected now, if may become irrelevant?

 

 A patent strategy, which is a business tool for advancing a company’s development and business goals in its current stage, should also be updated to reflect the changes the company is undergoing. Developments and improvements along the way can be protected by additional patent applications, and, in turn, build a quality patent portfolio. Research shows that a wide portfolio of patents significantly increases the likelihood of an M&A event, thereby raising its value; it is therefore important to develop the portfolio and adapt it to the changing needs of the startup.

 

This article was written by Saleit Shahar, Attorney at Law and Partner in the Hi-Tech Practice of the Reinhold Cohn Group, a one-stop shop for all Intellectual Property matters for startups.

www.rcip.co.il

 

For consultation regarding patent registration and Intellectual Property protection:

03-7109333 / info@rcip.co.il

 

 

 

 

 

We Live in a Digital World – Untouched by Coronavirus

As coronavirus affects nearly every corner of the world, it’s time to focus on nurturing relationships using digital channels

The top headlines in nearly every major news outlet, global and local in most countries, are about coronavirus. International events are being canceled, travel restrictions have been put in place in many countries, and every day the number of infected people rises. Companies have started to reduce, and even stop business travel until this virus either dies out or a vaccine is developed. This even includes local flights within the US, as companies do what they can to prevent the spread of the virus, protect their employees, and their bottom line. Quarantined employees, even if they haven’t been infected, can put a company out of commission. Even Netflix is taking precautions, insisting that actors like Gal Gadot travel on a private jet, which she’s usually against. After all, if for whatever reason she needs to be quarantined, filming stops for several weeks.

What does this mean for businesses? Do we just wait it out? Sure, you can reduce activities in the meantime, but even if you don’t see the affect it has on your bottom line now, you will see it in the future. It doesn’t have to be this way – even in today’s trying times, you can still reach your 2020 goals.

We’ve all prepared for this exact moment. In the past two decades, technology and the internet have taken over nearly every aspect of our lives and we’ve evolved. The world has long ago gone digital, and we’ve got everything we need to continue business as usual without having to place ourselves or our employees at risk.

Trade show canceled? Sure, that’s a shame and nothing beats walking the floor, lecturing at a global event, or presenting your solutions at your beautifully designed booth – but that doesn’t mean you can’t still connect with other attendees. Reach out to speakers, exhibitors, and attendees you planned on meeting at the event and start a conversation on LinkedIn. Schedule video calls and nurture your business relationships using the many tools we have available to us – social media, emails, conference call tools like Zoom and GoToMeeting, and even meeting scheduling platforms provided by some trade shows. While some events are canceled, others aren’t backing down and switching to online events – because it can be done – relationships can be made and deals can be signed with new partners and clients.

Had to cancel that trip to New York or London to meet with potential clients? Don’t just cancel and wait to reschedule after the coronavirus blows over. Reschedule now – have a video call instead. They’ll understand and will likely appreciate the initiative. You can continue reaching out to your audience on social media and via email, you can schedule online demos and video calls instead of F2F meetings, and you can fill up your sales pipeline with qualified leads without hopping on a plane.

It’s all about using the right tools and methodology – from in-depth research into your audience and how to approach them, to outreach and online meeting tools that you can rely on. Building a process that works will serve you and your bottom line well in times like these, and will continue to work and fill up your pipeline when you resume travel. Because next time you go to an event or travel for business meetings, you’ll go there with your calendar already filled up with meetings you know you want. Don’t wait it out, take action now and respond to this crisis by scheduling online meetings with your target audience. With the right strategy, nothing will stop you from reaching your 2020 goals.

This Article Was Written By Dafna Rolls Ish-Shalom, CEO at D|Rolls Associates.

For more information on how you can start – send her a message on LinkedIn or email her at dafnar@dafnarolls.com

 

 

Part 1 of 2: Successful recruitment of startup employees: most definitely possible mission

Israel is known as the Start-Up Nation, and rightfully so.
Currently there are about 7,000 start-ups (!) in Israel, in addition to the more senior high-tech companies found in the country. Each company recruits for a variety of positions and each seeks to manage many open positions, and so the competition to attract professionals increases.

In a press release issued in February 2019, Global Data analysts Company stated that “Israel is one of the dominant leaders in the entrepreneurial world thanks to its high-tech achievements accomplished over the years. Israel has 95 companies listed on the NASDAQ Stock Exchange, third only after the US and China. With Tel Aviv as a center of attraction, the number of start-ups per capita in Israel is the largest in the world”.

Part of a successful start-up is a precise recruitment of employees. This is especially true regarding small start-ups, where successful recruitment of an employee can promote a product, while an unsuccessful recruitment of an employee can, in some cases, cause the company to close.

From experience, I can say that, for the most part, start-ups (unlike senior companies in the economy) are looking for employees that have a unique “DNA” that will fit their organizational culture and their development environment. Most often, they will seek creative, self-driven and highly motivated people, who can see the larger picture, who deeply care about their personal and professional growth, who wish to take part in the technology solutions employed by the organization they belong to. They will seek people who know how to work in teams and have the relevant capabilities to do so, those who wish to be at the forefront of technology and can actually help and contribute to the success of the company during its critical stage.

The initial stage in recruiting start-up employees begin by establishing a specification of the company’s organizational culture and understanding what “organizational DNA” the company wants to produce. After clarifying this matter, you will be able to work with the recruiting team and sketch a precise professional and personal profile of the employees you wish to recruit to the organization. At the same time, you should collaborate with the marketing department and brainstorm the manner of communicating all the things it is important for you that others will know about you.

The more you invest in proper marketing of the company and in strengthening your employer’s branding, you will be able to attract stronger candidates.

3 key guidelines for recruiting employees (or: How to properly manage talents’ recruitment process?)

  1. Marketing the job to the candidate and creating value for a candidate to choose you – It is true that candidates come to you to be interviewed and apparently you select the candidates you prefer, but it is important to remember today candidates interview the recruiting companies just as the companies are interviewing them. just to make this point clear – strong candidates in the market have about 5 job offers on LinkedIn at any given moment, and if these are candidates who are actively looking for work, it is most likely that they will also have at the same time, 3-5 job offers and contracts in hand, from which they will have to choose. Nofar Gotlieb, our recruitment manager, says that this is the reason it is important to create value for the candidate from the stage of the initial interview. That is, to explain to the candidate about the Company, its product and the vision behind it, and not provide information that relates only to the position – make him or her know why it is better for them to work with you. What is your Added Value? Why choose you and not a different company? At the same time, make sure that you also provide the candidate a chance to speak and make sure you listen and understand what motivates him or her and what are the reasons he or she are looking for a job. If you can offer to provide it, you can offer added value, and you should make sure that you emphasis this during your conversation.
  2. Management of a precise and fast recruitment process – Since every strong candidate today has several offers at the same time, a quick response and a precise process – are critical here for completing a proper recruitment process. Therefore, establish an effective, focused and quick recruitment process – conduct combined interviews (e.g., combine professional interview with HR + an exam on the same day), and schedule the candidate once more, twice at the most (and even then – be efficient and make sure that the candidate will meet a number of people during the same day).  In addition – create clarity at the initial stages of the process – explain to the candidate what the recruitment process includes and how many stages it involves.
  3. Creating an experience for the candidate – Today, more than ever, in an era of dominant social networks and information is accessible to all, the candidate’s experience in the process is critical – for candidates to want to work for you, make sure you end the recruitment process on a good and positive note, even if you decide not to hire that candidate. Make sure to return a negative answer to any candidate interviewed and you will receive more points if you explain to him or her in a short sentence why you chose to continue with another candidate. If the candidate reached advanced stages of the process – make sure you talk to him or her on the phone, tell him or her that you will be happy to stay in touch about future positions, and most importantly, let the candidate feel that you really appreciate the time and effort he or she invested in arriving to the interview. A candidate who feels that he or she was really seen during the process, will send his or her friends to you. (See “Friend brings a friend” section below – the most important recruitment resource for organizations!).

In the 2nd and final part of “Successful recruitment of startup employees”, we will discuss about how to begin and ways to reach all these talents and succeed in recruitment for your startup.

* Prodware Israel is the Israeli operations branch of the global Prodware Group. It helps organizations reinvent themselves in the era of digital transformation. It is a key player in the global IT industry.

Prodware has also collaborating with Brooks and Keret Company, and together they provide employee placement and outsourcing services with specialization in start-ups. Additional information is available on Prodware Israel website.

 

 

This Article Was Written By Keren Tirosh, VP of Human Resources & Nofar Gottlieb, Recruitment Manager Of Prodware – Israel.

Contact them at ktirosh@prodware.co.il or ngottlied@prodware.co.il

 

Are you dreaming of an IPO? Perhaps you should sail a boat!

Hey founder, are you dreaming of an IPO?  Perhaps you should sail a boat!

Diane Green, co-founder of the multibillion dollar company VMWEAR  that went public a few years after its inception as a startup , says sailing has taught her to be a better entrepreneur. In a speech which she gave a few years ago at the Y combinator for female fund, she said sailing, a hobby which she’s been practicing since childhood, was “formative”. She told the present founders that captaining a sailboat is very much like building a company. “You have to listen to what the wind and water are telling you and find a way to execute the goals you’ve set”.

Startups are vulnerable organizations that must react extremely fast to changes. In startups the leadership role is complex: they act at the same time   as strategist and executers, and must build from scratch not only a product, but also an amazing and committed team.

Handling the complexity and diversity of those tasks can be acquired through practicing sailing, which is also a powerful method to practice teamwork. However, you don’t have to be a sailing fan, you can practice it during a maritime ODT activity. But why and how can you benefit from it?

 

  1. It can teach you to handle changes. A manager must care about keeping the organization or team relevant, against the ever-changing markets. The pace of change in this era is tremendously fast, and involves everything: Consumer behavior, financials, operations and so on. Change is a key value to deal with within organizations. Sailing a boat is a perfect simulation of change, because of the unpredictability of the surrounding factors, which requires adaptation on the part of the sailing team and its leader.
  2. It will enable the practice of the values of teamwork with your employees – People with no maritime experience can’t sail a boat alone, they need to do it as a team and the team needs to be well coordinated. This activity also requires clarity in the definition of each task and its understanding. When a team does not function well together, the “reward” will be immediate: the boat won’t sail well; when the team works together well, it will. The communication and level of cooperation in a team will immediately translate into success or failure at sea.
  3. It can enable the practice of creativity and innovation – Beyond managerial challenges, there are external forces that dictate critical needs. Creativity, innovation, and strategy, for example. While sailing the boat, a team can practice those values by making smart and creative decisions that concern, for example, the course chosen for the sail. A team can practice how to sail across the wind, as an effective way to solve a problem in a creative way.

 

Nir Zamir, a skipper and consultant who also moderates sea journeys for groups,  explains that these are just a few of the many business, personal and organizational values you can learn or practice at sea, while the main idea is that the boat functions as an accelerator to incorporate them. Sailing takes us outside of our natural surroundings, as we are not marine creatures. This transition from one form of existence to another creates a rapid process of adaptation, backed by the natural uncertainty that the sea and the boat causes.

And after we practice, deal and learn, we just look at the ocean, at the sky and the horizon, and feel, breath and let all in. The challenges, just like the waves, keep coming, but we might be better prepared to face them.

 

This Article Was Written By Sivan Moran, Resource Development Manager at Mifrasim organization, a non-profit organization provides a special, large-scale sailing vessel that creates a unique and influential platform enabling social-educational-therapeutic activities on the boat.
Contact her at sivan@mifrasim.org.il

 

 

Where can you Find the most cost-effective office spaces to rent?

Let us begin with the simple truth – cost matters, it always does. Its importance, however, it is much less than usually attributed to it!

Suppose you work in the field of Cyber or FinTech. Renting an office in Rothschild Boulevard will cost you NIS 8,000 a month (a small office J), while an office, twice the size, in Petach-Tikva will cost you NIS 4,000 a month. It seems you can save NIS 48,000 per year. Amazing! Well, not really…

During the year, you had to recruit 4 excellent employees in PT-Hacking, Defense, Malware and Forensic researcher (I really have no clue what thees titles mean). To recruit employees in Tel-Aviv took you about a month. In Petach-Tikva, however, it took you 9 months. That means the company lost 9 months! Is it worth NIS 48,000? Maybe, but you should be aware and understand the consequences.

However, if you are a company located in the center of Israel, which can apply to the start-up class, offered by the Israel Innovation Authority, and may be eligible to receive a grant of 50% of your annual budget (say NIS 2 million), it could be worth to consider renting an office space one hour driving from the center (say Sderot), you could receive a grant of 75% of the budget (approximately NIS 3 million!) Is it worth the travel? Maybe…

If you are planning to rent an office, stop for a second, define your current “profile” and how you plan to develop in the next two years. This profile will help you understand better the company’s needs according to objective parameters and will help you weigh more accurately each of these parameters.


Formulate you Profile:

  • What is your field of work – AgriTech? FoodTech? Industry 4.0? CleanTech? Cyber?
    • Where is the industry located? Focus on prospective clients
    • Is the company eligible to receive benefits and grants from the government? From local authorities?
  • In what stage is the company currently at – Pre-Seed? Seed? Early Stage? Growth?
  • How many employees do you currently have and how many do you expect to recruit in the near future?
  • What is the “type” of employees you wish to recruit in the near future?


Definition of needs:

  • The size of the office, growth flexibility
  • Do you need a Conference Room? How much will you use it?
  • Can some of the employees work together in an open space?
  • Is the interface with other companies important? With other people?
  • Is the office easily reached? Traffic? Train? Parking?
  • What are the surrounding conditions and how much your employees care about the availability of near gyms, restaurants?
  • Can you rent for a short period? What are the required guarantees?

 

Two additional parameters to consider:

  • How important it is to the “renter” that his clients will succeed – can he be flexible when needed (with startups you always have to be…)
  • What is the ecosystem the renter can offer – leads to investors? Help in recruiting staff? Labs? Benefits from service providers?

 

The (unobjective) author is Elad Yeori, the Co-founder and CEO of SouthUp – a non-profit organization aimed at promoting growth in Israel’s periphery in general in the Gaza Envelope area in particular, create jobs in the various innovation fields and make the worlds of entrepreneurship, innovation and technology accessible to youth.

The organization manages two office spaces for start-up companies and entrepreneurs (Sha’ar Hanegev and Kibbutz Nir-Am) and is currently in the process of establishing its third space.

Contact Him At Elad@southup.org

 

 

 

 

 

Part 2 of 3: Complex Business Scenarios You Should Foresee, and How to Tackle them Head-on

 

In Part One of this series, I discussed the potential scenario of partners attempting to take control of your business in an unsavory manner. In Part 2, I will dive into company information being leaked which can have a detrimental impact on your business’s growth and success.

Recently I had a client whose employee stole an internal database and attempted to sell it to competitors offering the highest sum. The client, suspicious due to rumors he heard in the office hallways, hired my business intelligence agency to either uncover that these were merely office whisperings, or that this was indeed happening and how to put a stop to it.

If you ever find yourself in a similar situation, here are three steps on how to address it.

Scenario 2: There’s been a breach of information

What to do:

Understand the scope: If you uncover confidential information from your company has been compromised – such as an algorithm, upcoming product launch, databases and more – it’s important you first and foremost understand the scope. From that point on, you must reverse engineer the path the leak took to find the source.

Find the leak: My firm had a company who lost a database of experts in the pharma field. So our first mission was to uncover who had access to that database itself and once identified, conduct background checks on this list of individuals to understand if one or more have hidden interests in taking such information. This could be fueled by monetary needs, ill-will towards the company and more. Know that as the business owner, you might already have a strong intuition of who this person or group of people could be. That said, don’t confront them until concrete evidence is in hand as you might set off unnecessary or dangerous alarms.

Take action: You’ve found the source of the breach, and now you have a plethora of options. If the information wasn’t yet sold, you can involve the authorities and secure a lawyer to make sure this employee is persecuted. Or alternatively, you can settle with the employee on your own terms, letting he or she go in the process. If the information was indeed sold, it’s important to know who purchased it and secure a lawyer to address the buyer and prevent them from using it. If you don’t know who the buyer is, consider obtaining a professional third-party who can find out as every day that passes puts your company at risk.

 

In Part Three of this series, I will highlight how to address potential acquisitions that you have a hunch might be accompanied by hidden surprises.

 

Gilad Sarusi is Founder & CEO of Gabriel Intelligence Agency. Contact him at info@gabriel-intelligence.com.

 

What Does Your Cloud Platform Have to Do with Long Distance Running?

 

When I meet entrepreneurs my first question is: “Do you run?” Usually they look at me with puzzled eyes, and then I explain: There is one thing that is common to all entrepreneurs: they are always running. They run after their production, costumers, investors… as an ultra-marathon runner I see an inseparable connection between long distance running and building a startup. You basically go on a journey that will have lots of ups and downs and you need to make sure that you have the best support crew to help you get through.

Let’s run a marathon!

As a startup you are aware of the challenges of making the right decisions, especially when there is always the stress of time, money and tight timelines. As startups are under constant pressure, they tend to go with platforms that they are familiar with. However, the choice which cloud platform to use should be made not only from a technology perspective but also from a business one.

What are the REAL benefits that you get?

All cloud providers offer credits but that is a tactical consideration, one of many, and we are strategic thinkers. In addition to the valuable credits, I highly recommend thinking about your support crew for the journey. Hence, who do you choose to be your partner in both aspects: technological and business.

Here are few benefits you want to make sure that you receive:

  • One-on-one meetings with an architect that specializes in the technological field that your product is in, and can help you build an architecture that will save you time and cloud costs later
  • One-on-one meetings with a professional account manager from your cloud provider who works with potential customers that can be your design partner in the future
  • One-on-one meetings with a business development manager that will help you build a go-to-market strategy
  • Mentorship from the leading figures of the cloud provider in business and technological aspects
  • Opportunity for future collaboration with the cloud provider’s product groups
  • Access to other key stakeholders at the provider’s company that will help your startup grow and sell


So, what’s the bottom line?

“If you want to run fast, run alone (but you won’t get far…), but if you want to run far – run together”. Since the journey is long and challenging you need to think with a long-distance running state of mind. All cloud providers offer credits, that is a given, but are only a fraction of the long-term benefits that you can receive from your cloud provider. Make sure you choose the right partners for your startup long distance running. Good luck!

 


This Article Was Written By Liat Netanel – Ecosystem Business Development Manager at Microsoft for Startups, responsible for building strategic and long lasting business relationships that drive value and create exciting opportunities in the startup world.
Contact her at v-lineta@microsoft.com

 

 

Medium-sized business in growth, what are the financing options today?

 

The Marker published on April 15, 2019 the article “This is how the banks ride on medium-sized businesses.” The article shows that the competition between the banks in the medium-sized business sector is negligible and that in 2018 the banks’ profitability from this activity increased significantly. As of today, this activity contributes to around 16% of the total net profit of the 5 largest banks. In the data presented, at least two main issues arise: First, in some of the banks, the data includes real estate financing, which only Bank Leumi separates from other activities, Second, the data only relates to businesses that the banks are willing to provide finance to.

But what are the options for a medium-sized business which the major banks are unwilling to finance or unwilling to increase its current funding?

In general, banks analyze past performance when evaluating a business for eligibility for providing credit. Companies which are still growing in the present and do not show profit, or high-growth profitable companies which their latest financial statements do not reflect their current and future relevant credit needs, will be unable to obtain bank financing to realize the potential growth. The common solutions available to such businesses in this case are: non-bank credit or raising capital in the form bringing along new equity investors. Investment by a new partner may often results in diluting the existing shareholders, and therefore it is probably the most expensive option with the additional meanings of ownership and control. for example:

An industrial / family owned company may encounter major difficulties in finding a private investor, and in addition it should be considered the difficulties to get along with such new shareholder. In many cases companies encounter shareholders’ conflicts, which increases the risk of management instability and decision-making and may endanger the stability of the company.

A start-up that is already in the stage of sales and the transition to profitability is in the foreseeable future, financing in the form of debt in most cases will be much cheaper for it and will prevent expensive dilution of the shareholders at relatively low value.

Non-bank credit financing – There has recently been a boom of entities enabling non-bank credit financing. Seven of which are traded in the stock exchange and the largest are the Nawi brothers and Peninsula. The new credit legislation increased the possibilities of these companies for financing, but these financing entities mainly operate in the field of checks discounting and provision of short-term bridge financing for limited periods of up to one year and usually with full collateral, so these entities cannot provide for the needs of financing long-term growth

So, what is the solution?

Government ministries have already realized the importance of small medium-sized businesses to growth, as well as the funding difficulties that prevent significant growth. For these reasons, the Ministry of Economy initiated the establishment of two new investment funds to support small medium businesses. One of these funds is the Peninsula Growth Fund, which was established at the end of the first quarter of 2016. The Peninsula growth fund focuses on mid-sized businesses with a turnover of NIS 10-130 million a year. The investment period defined in the fund mandate is five years, and the vesting period reaches up to 10 years. Therefore, the fund can provide long term financing in a unique and creative structures of up to 10 years.

These funds can emphasize the analysis of the company’s future and take certain risks regarding their realization. The funds are therefore capable of financing organic growth of a target company, growth way of M&A, and financing means of control, which often leads to the ability to realize potential growth

Therefore, this solution is a win-win solution for the shareholders of the company. On the one hand, they can receive additional financing which is not available from the traditional banking system and in a much more flexible manner regarding terms and collateral, and on the other hand they do not have to raise expensive shareholders’ equity or be subject to dilution by introducing additional investors.

This Article Was Written By Michal Fishler-Mund, Investment Manager Of Peninsula Growth Fund Contact her at michalf@peninsula.co.il

 

 

 

 

Complex Business Scenarios You Should Foresee, and How to Tackle them Head-on – Part 1 of 3

As a business executive, you’re likely juggling finance, legal, HR matters and more on a daily basis. You have a myriad of crucial responsibilities and in the midst of executing such tasks 24/7, you might miss a few happenings occurring right under your nose.
Some of which could be detrimental to your company and to you, personally.

As the founder of a business intelligence agency, no scenario surprises me. In fact, just the other day a client asked we conduct due diligence on potential business partners, only for my firm to uncover those subjects were sued various times for illegally attempting to overtake other companies.

Here is Part One of a three-part series showcasing a few different situations I’ve seen time and again that you should pay attention to, and my advice on how to address them.

 

Scenario 1: When your partners are attempting to stage a coup

What To Do:

Background Checks: Before you partner with them, conduct background checks to better understand their reputation, criminal background (if any), legal conflicts and more. Remember, don’t rely only on asking around, Google and calling their references. Instead, utilize unbiased professionals or platforms. LexisNexis is a great example of a platform that can source information from 50+ countries, including litigation cases and more.

Identify Motive: When you see this is happening, make it your main goal to understand their motivation and interests. Are they trying to gain money? To take over the whole company? To soil your reputation? To get you out and buy your shares at a low price? Or maybe they’re trying to get ahold of your patents. Either way, understanding their interests will take you on the right path to addressing the issue at hand.

For example, my firm has a case where the CEO was placing the company in debt in order to have it liquidated so he could ultimately purchase it through a third-party sans our client’s involvement. After reviewing the CEO’s actions & conducting our own investigation, we were able to inform our client that this was the subject’s true intentions and provide the appropriate solution.

Consult a Professional: If your partners indeed managed to remove you from the company, it’s important to consult a lawyer as this scenario is quite complex to reverse. Though it’s best to avoid this situation altogether, you now must collect as much evidence as you can to show that the actions to remove you were intentional and not exercised in good faith. That evidence might live in emails, recorded conversations and more. Many times, we help our clients collect such evidence to assist them during this stage.

In Part Two of this series I will dissect how to address when a breach of information within your company takes place – whether that means databases have been hacked or an upcoming product launch has been leaked.

 

This article was written by Gilad Sarusi, Founder & CEO of Gabriel Intelligence Agency.
Contact him at info@gabriel-intelligence.com.