Here we go! Today 24 April 2012 we moved to the north of the country, destination Nazareth. After a two hours trip by bus we arrived here to discover another reality of Israel, the incubator New Generation Technology (NGT).
Incubators are programs designed to support the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts.
There are around thirty incubators along Israel. They are created to stimulate the industry innovation and to create employment. Normally they host companies specialised in the same field, normally specialized ones, as pharmaceutical, biological or IT sciences.
NGT is an exception: even if concentred on pharma projects, it has been created and was developed around Arab companies, managed mainly by Arabs. It was born 13 years ago to solve an actual problem: very competent professors and researchers with Arab origins were excluded by the other incubators and remained unemployed. The aim of NGT is to change this situation. Here there’s not at all discrimination based on religion. In fact, also if just in minority, also Jewish companies are incubated there.
Companies desiring to enter the program pass through a very meticulous screening process where they have to demonstrate that their idea reaches some predetermined requisites:
- It is patentable
- It exists a market for it
- There are possible contractors relied to the Israeli context
How does it work? People come at the incubator demanding for the admission, once the project has been incubated, it’s the incubator itself that searches for the funding for the project. The majority of them are governmental funds, but rules depend on the single entity. NGT for example requires a minimum of 15% of private funds, normally provided directly by the entrepreneur. The incubator will owns a relevant quote of the stock that is in average greater than 50%, without in any case interfere in the strategy pointing on the shares control. Normally the incubation lasts two years. This limit has been set up by law and can be extended to three years in particular cases.
But why an incubator? Which are the pros for a company to be set up in an incubator? Here what we get of concrete:
- Consulting and mentoring
- Connections with the other companies in the same field
- Externalisation of all the financial aspects
- Access to the shared facilities, from meeting rooms to advanced laboratories
Another good news for those who might be interested is that no exit strategies exist, in the sense that also once outside the two-years period, the incubator will maintains its stocks, granting a better financial stability and confidence with third parties. In addition, in case of success, only royalties will be demanded and in case of failure the invested capital will be considered as a grant.
European countries, why not to take example from our overseas neighbours? Welcome to Israel!