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May 14th, 2021 
FAKE NEWS for the Zionist agenda The coronavirus pandemic has changed the way tech firms operate, with virtual pitches and increased competition for deals cutting down the time it takes to close a deal almost by half, a new survey of over 200 startups shows.
Startup Snapshot, a data sharing platform for the Israeli startup ecosystem, on Thursday published a report that provides a glimpse into how startups are coping in the current market post-COVID, and how they are managing to increase their funds and expanding abroad. The report was compiled by Y. Benjamin Strategic Marketing in partnership with LeumiTech, Intel Ignite and Fiverr.
Despite the challenges brought about by the pandemic, Israeli startups raised a record $5.37 billion in capital in the first quarter of the year.
Due to virtual pitches and increased competition for deals, 59% of startups surveyed said they had closed a funding round in under four months, compared to only 36% pre-COVID.
Tzahi Weisfeld, Vice President and GM of Intel Ignite (Aviram Valdman)
“Most investments were done with just one to 10 Zoom calls,” without meeting in person with investors, said Tzahi Weisfeld, the VP and general manager of Intel ignite in a phone call. Intel Ignite is the program set up by Intel Corp. to foster startups.
“Money is being raised in a faster and much cheaper manner then you’d expect,” said Weisfeld.
In the survey, 29% of the companies said they had closed a funding round in under two months.
One would expect that without entrepreneurs and investors meeting, it would take longer to raise funds, he said. But “people are more available on Zoom,” he explained, and not traveling to work frees up more time to work on deals. “There is no need to fly out for each meeting, and time is used more efficiently.”
Even while they are injecting funds into Israeli technologies, investors are pickier than before and looking for more control and protection from risks in the term sheet they sign with the tech firms. Thirty-five percent of the startups reported tougher terms in their funding latest round, as opposed to only 7% in the US, the report said.
“Funds are flowing, but Israeli investors want more checks and balances when serving their term sheets,” Nimrod Vromen, partner in Yigal Arnon & Co, a law firm. “Pre-COVID, you would see a majority of deals containing a standard list of restrictive provisions, or veto rights. However, in 2021 investors are seeking more active involvement in overseeing expenses and ongoing business activities, trying to protect themselves in today’s uncertain market environment.”
Close-up on Israeli shekels, Jerusalem (Orel Cohen/FLASH90)
The rising value of the shekel against the dollar has affected the competitiveness of the local hiring market, with 13% of startups reporting that they have turned to hiring employees abroad, while 11% of companies were forced to raise additional funding to meet the higher salaries they need to pay locally.
“We see that many startups are outsourcing workers abroad,” Weisfeld said, due to strong competition for workers locally amid a shortage of engineers and programmers and a growing number of multinationals operating in the nation, and because it is cheaper to employ workers abroad.
Of the companies surveyed, 37% said they had increased reliance on outsourcing in the past six months. To support the shift, companies are reorganizing their teams, with full-time employees effectively becoming project managers that oversee execution-focused freelancers.
Due to COVID, founders are also canceling relocation plans. Of the startups that opened an office abroad during the past year, 59% hired a new foreign-based employee as their first person on the ground.
Illustrative image of movers and relocation (XiXinXing; iStock by Getty Images)
“If once it was very clear that when you raise your first significant round of money from investors one of the founders relocates” to be close to investors, today, post-COVID, that is no longer the case, said Weisfeld.
“We will see what will happen later on, but for now it is fine to stay here,” he said. “Relocation is no longer an automatic thing to do.”
Given the difficulty of hiring senior talent remotely, 32% of companies said they hired a more junior worker as the first step to international expansion, versus a more senior hire they would have taken on otherwise.
Due to the rise of remote work, 21% of companies reported that location of their first employee abroad is not important at all. Freed from geographic constraints, these founders are tapping into top talent abroad regardless of location.
The Startup Snapshot initiative, launched in May last year, aims to bring greater transparency to Israel’s tech ecosystem by creating a data-sharing and cooperation platform within the community.
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