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PAGE 14A By David Rosenberg The Media Line A score or more of people are hard at work on a balmy winter afternoon at TechLoft's big open-area office in the center of TelAviv.Mostofthemare quietly glued to their computer screens. A few are meeting in a confer- ence room whose Plexiglas walls are covered by flowcharts and jottings. Others are quietly consultingwith one another. Off in one corner is a mini-kitchen and coffee machine and just outside is a big wooden deck used to host networking events. It could be the offices of any of hundreds ofhi-tech start-ups in the city and its environments, but in fact the TechLoft's space is the shared home to a dozen or more start-ups---or more accu- rately, seed-stage companies or even pre-seed companies: busi- nesses that haven't yet reached start-up status. Some of them aren't companies at all--just teams of people working to formulate an idea. "We're trying to fill the gap for early stage companies who need that $100,000 and $500,000 that their friends and family can't provide on one hand; while venture capital funds won't provide on the other. There's a gap, which we have set out to fill," Gilad Tuffias. one of TechLoft's two co-founders, told The Media Line. The facility represents a new generation of investors coming to fill a dangerous gap that has developed in Israel's high technology, "namely a way for budding entrepreneurs to take HERITAGE FLORIDA JEWISH NEWS, FEBRUARY 24, 2012 Israel's capital-strapped tech companies find homes in technology nurseries the germ of an idea and begin turning it into a product and a company. While Israel has earned a global reputation as the "Start- Up Nation," the fact remains that it is tougher than ever for nascent companies to get offthe ground. Venture capital (VC) funds, the traditional source of finance for new companies, invested more than $2.1 billion in technology start-ups last year, but just 5 percent of that went into seed stage companies, according to Israel Venture Research. "Even when VCs were thriv- ing, very, very few were investing in start-ups. Many said they did but only a few really did," says one fund manager, who spoke on condition of anonymity. "I'm an active chairman of a start up and we're beating our brains out finding money for the company--and we have a product." Seed companies are by their very nature small and many fail, but they are critical to the hi-tech industry in Israel. Few Israeli tech companies stay independent and grow for the long term. Instead, they tend to put themselves and their technology up for sale after a few years, usually to be bought out by a big foreign company. That means the industry needs a steady supplyoffresh companies embarking on the path of con- ceiving an innovative new idea and developing it into a work- able product for the industry to remain vibrant and grow. TechLoft's strategy is to help these new entrepreneurs by giving them workspace; access to lawyers, accountants and others to help them get their new business in order; and a forum for meeting investors and other entrepreneurs at the same stage in the tech lifestyle. An important component of the TechLoft's concept is for the entrepreneurs to exchange ideas and advice among themselves. It charges a nominal rent of 1,000 shekels ($263) a month per person for the space. TechLoft opened its doors last autumn and is already at work to double its capacity to 70 people with a new open- office one floor above its current loca- tion. Tuffias and his partner Tal Marian are now raising money for a micro-fund, one that will investsums of about $100,000 in the most promising TechLoft's tenants. TechLoft isn't the only one creating an innovative new environment for seed stage companies. Google is planning to dedi- cate a floor at its new research and development center in Tel Aviv to an incubator for as many as 20 pre-seed enterprises. When it opens this August, the center will have places for up to 80 budding entrepreneurs who will be hosted for several months, duringwhich time they will have access to desk space, Internet. meeting rooms aswell as technology and advice from Google employees. "The Israeli developer com- munity is hugely innovative." Yossi Matias, the head of Google's Israel R&D center. told The Media Line in an email. "This incubator project was ini- tiated with a desire to encourage entrepreneurship and to provide support at exactly the stage when developers are most often in need of it." Google'will not invest in the incubator companies, butit does aim to "strengthen" its connec- tions with the developer com- munity, explains Paul Solomon, Google's spokesman in Israel. Even the Tel Aviv municipal- ity has gotten into the act as its tries to turn itself into start-up city. In the Migdal Shalom Tower, not far from where the citywas founded just overa cen- tury ago, part of an underused library branch has been turned into a facility for early-stage entrepreneurs. Twenty-eight people who get approved by a screening committee have -access to "hot" desks, a confer- ence room. a panoramm view of the Mediterranean Sea and a standing invitation to events and meet-ups. The library facility is a part of awider initiative to turn central Tel Aviv into a nursery, not only for Israel's hi-tech industry but forall of Europe, by encouraging foreign tech entrepreneurs to set up shop in the city. "What Tel Aviv is doing here is developing an eco-system that feeds Israel's hi-tech industry," says Avner Warner. economic development director for the Tel Aviv Global City initiative. "Tel Aviv concentrates 2,000 of the 4.000 start-ups in Israel. We want to promote that and open up to the international market. We want to be the technology center of Europe." These technology nurseries are different from the tech- nology incubators of the last generations, which performed a similar role of proving, space, advice and capital. But when telecoms and hardware were at the core of the hi-tech boom, the time and cost of starting up a new company was high. That is still the case for a lot of areas of high technology. But, nowadays, when Internet and mobile technologies are the hotnew growth area, going from idea to viable company can be a matter of as little as 12 to 18 months. Entrepreneurs start offby working on their kitchen table at home or at a eaf. The entire company's intellectual property and operations are uploaded to the Internet cloud. Social media can take care of the marketingatlittle cost. Start to finish, the budding business might need no more than a few-hundred thousand dollars of investment capital. "*'ithoutadoubt, the innova- tions in technology have brought us to a new level and given op- portunities to peoplewithout too many means to get something up and running," says Tuffias, of TechLoft."Ifyou have a talented team of developers and just one investor who believes in you, with the globalizedeconomy and having the Internet reach every point on the globe, if it's a good product and people like it, word ofmouthcan bring it to millions of people within a matter of even minutes." "You don't have to spend millions and millions of dollars on marketing and traveling overseas." he says. "You do all of that from your home or from the beach--or from TechLoft." Nurseries aren't the only ways early-stage enterprises can get off the ground. Angel investors--wealthy individuals who alone or in groups back new companies providing the first hundreds of thousands or millions in investment--have come into their own in the past two years in Israel. The cause for thatwasaKnes- set (parliament) law, popularly known as the Angels Law, which gives them an attractive tax break. Private investors who put anywhere between 25,000 ($6,600) and 10 million shekels ($2.65 million) in hi-tech start- ups have the right to record the amount as a capital loss at the time they make the investment. That can be used to offset other capital gains. The law has brought new an- gel investors into the market at a time when the quality of angels has risen. That is important because young, often inexpe- rienced hi-tech entrepreneurs need advice as much they need capital. "Angels have come back into play and angels have changed in quality here," Ed Mlavsky, founding partner of the VC Gemini Israel Funds, told The Media Line. "In America angels were people who really under- stood what they were investing in. Here, they were diamond merchants and didn't really understand what they were investing in. But now we have a generation of people who made money in hi-tech." Catholic hospital fight leads to Jewish conversation By Jonathan Mark New York Jewish Week As the politics recedes, a quiet conversation begins. If tikkun olam. the social service imperative to serve even the needy of other faiths, such as in Haiti or the inner City, is a religious obligation on the level of Shabbat and kashrut, as many Jews now believe, are Jewish or Catho- lic hospitals sacred spaces and protected institutions on the level of synagogues or churches? Or are these hospi- tals neo-secular institutions, for all practical purposes, not deserving of FirstAmendment immunity from government interference? In January, the Obama ad- ministration announced that contraceptives must be cov- ered by workplace insurance plans. Synagogues or churches would be exempt, but Jewish or Catholic hospitals or welfare organizations whose mission is not ecclesiastical or parochial would not be exempt. The decision was supported by the major Conservative. Reform and Reconstructionist groups, aloog with organiza- tions such as the Society for Humanistic Judaism, the National Council of Jewish Women and Hadassah. A joint statement, with more than a dozen Christian and Muslim groups, declared: "We do not believe that specific religious doctrine belongs in health-care reform .... The administration was correct in requiring institutions that do not have purely sectarian goals to offer comprehensive preventive health care," such as contraception. Orthodox groups were es- sentially alone in the Jewish opposition. The Orthodox Union said it was concerned with the underlying rationale for the government's deci- sion, "that if a religious entity is not insular, but engaged with broader society, it loses its 'religious' character and liberties. Many faiths firmly believe in being open to and engaged with broader society and fellow citizens of other HANDYMAN SERVICE Handy man and General Maintenance Air Conditioning Electrical Plumbing Carpentry Formerly handled maintenance at JCC References available STEVE'S SERVICES Call Steve Doyle at (386) 668-8960 faiths. The administration's ruling makes the price of such an outward approach the violation of an organization's religious principles," such as requiring Catholic hospitals to provide insurance covering contraception. Two weeks ago, the presi- dent amended the original decision and announced that no nonprofit faith-affiliated employer had to provide or make referrals for what they believe is religiously forbidden. Instead, employees of these institutions will have access to contraceptive benefits directly from insurers. Although most liberal groups supported the origi- nal decision, the ending of the political controversy has allowed a discussion about tikkun olam among some liberal Jews that is no longer along hardened political lines but softened by the humility of spiritual introspection. This is true among Catholics, as well. After the political resolu- tion, E.J. Dionne, a liberal Catholic, wrote in The Wash= ington Post, "That so many liberal Catholics supported the church's core claim has surprised both Catholic con- servatives and more secular liberals," recognizing that so much of the church's work for the poor and the dis- advantaged tikkun olam, though Catholics, of course, don't call it that--is what makes "the words of Jesus come alive every day." Rabbi Michael Lerner, editor of Tikkun says, "The galactic demand that we take care of the stranger and pursue justice can't be confined to the synagogue." There are some in the conversation "for whom the Constitution is their highest value, but for those of us who put Torah as our highest value, then there is no separation of religion and the public sphere. That leads us to support government [a democratic arrangement], to the extent that it allows us to care for each other, to pursue chesed [kindneSs] and racha- mim [mercy]." Rabbi Rolando Matalon, spiritual leader of Manhat- tan's B'nai Jeshurun, a liberal Upper West Side synagogue famous for its commitment to tikkun olam and progressive politics, says, "I personally believe that a hospital does the work of God, healing and giv- ing life, alleviating suffering. We believe that anyone who heals or even visits is doing God's work." Every Jewish denomination from the far left to the far right believes that "even Shabbat must be violated in order to save life." Matalon adds, "I also un- derstand that not everyone sees it this way. Hospitals- have to be open to a general public, to both patients and employees, in a nonsectar- ian way. With federal funds the conversation gets dicey. What happenswhen a Jewish woman, who halachically may be justified in having an abortion, goes to a Catholic hospital, if that is the only hospital in the area?_ "I am concerned that more and more doors will be closed to people who legitimately need that hospital's services," says Matalon."I don't celebrate it [abortion]. I don't think it should be done foreverybody in every circumstance, but there are circumstances when abor- tion is warranted. And yet the Church has the right to take a stand against contraceptives? "I don't know. I don't have an answer." Rabbi Irwin Kula, president of the CLAL think tank, says, most Catholic and Jewish hospitals were founded by im- migrant populations at a time when "other hospitals really weren't accessible to Jews or Catholics. The conversation now is, 'How do we retain our religious integrity at the same time that we've become pluralist institutions serving all Americans?" Kula, a Conservative rabbi, says, "There have to be internal conversations before external ones. The left has to have an internal conversation about their fear of religion and co- ercion. The external culture needs to ask itself, how do we create room for people to play out their religious and spiritual values" not only in the pews but in a pluralist society? And the right has to talk about their own fear of coercion, how they fear aworldwithout spiri- tuality, laws and discipline, a world of unraveling of social contracts. "We have to find away to re- spect religion--it's just about the only place in this country where we're even talking about what's appropriate sexually or not. And we need a rehglon that can say, we know almost no one even listens to us anymore about sexuality." In fact. notes Kula, "Jewish hospitals have gotten over" what Catholic hospitals are still working out. "We don't freak out at compromising in order to get government funds." For example, in the all=cha- sidic village of Kiryas Joel in upstate New York, the Satmar leadership long ago agreed that there wouldn't be any mezu- zahs in a Kiryas Joel public school for severely disabled children--all of whom are Jew- ish-in order to maintain the school's legitimacy as a public school for childrenwith special needs that the village couldn't afford on its own. "Think about that," says Kula. "No mezuzahs. Satmar leadership doesn't experience that as an imposition. We're better at understanding the quid pro quo of taking gov- ernment money. We're less worried about that." Kula recalls a story about the time thatRabbiYitz Green- berg was telling some Jewish philanthropists, including big givers to hospitals, that they had to give more money to Jewish day schools. "Someone goes over toYitz and says, 'How can you say that? Don't you know we have to support Jew- ish hospitals?' And Yitz says, 'That's what we'd be teaching in the schools: To give to Jewish hospitals.'" Jonathan Mark is associate editor of The New York Jewish Week, from which this article was reprinted by permission.