Why We’re The Leading Venture Incubator For Early Stage Startups

Mosche Raines, Managing Partner at Labs/02 and Shai Eisen, Partner at Labs/02

Executive summary: by creating a unique incubator/investor model, Labs/02 has carved out an exclusive space as a Venture Incubator for early stage startups. Combined with several key advantages – from geographical proximity to strategic partnerships – Labs/02 has positioned itself, by design, to be at the forefront of finding and growing tomorrow’s Israel-born unicorns.

In the U.S, 1 in 3 startups move from pre-seed or seed stage to “A” round, according to Crunchbase statistics. While I believe the actual number to be significantly lower than this, what this does show is the potential such startups have.

In a previous post, I spoke about the early stage startup space, and why it’s so exciting. As I mentioned, as much as there is incredible upside to these opportunities, there are also pitfalls for those who are not experienced in this space.

It takes a set of very specific “ingredients” to come together harmoniously, in order to maximize the chances that an early stage startup will translate into a massive success further down the line.

I’d like to propose what I believe these ingredients to be – and why what we’ve created at Labs/02 sets us up to be the leading venture incubator for early stage startups.

Access to cutting edge technology

A successful startup has to have protectable technology that sets it apart. With companies today moving so quickly, a startup can have the world in the palm of their hand, only to have a Microsoft or Google release a similar feature, for free, thus undermining their entire business model.

Protectable innovation is therefore the key to sustainable tech-based success. And what better way to find this innovation, than at the source. This is one of the reasons that Labs/02 has such close strategic partnerships with key academic institutions.

Labs/02 collaborates closely with 2 leading academic institutions in Israel, both of which have worldwide acclaim in terms of the innovation coming out of these institutions. In Jerusalem, a key partner is the Hebrew University of Jerusalem. Founded before the modern State of Israel came into existence, the original Board of Governors included Albert Einstein, Sigmund Freud, and Martin Buber, and the University is the alma mater of no fewer than 15 Nobel Prize winners. In fact, some of the Labs/02 companies are run by faculty and ex-faculty at this prestigious institution. Labs/02 also has a strategic partnership in place with Yissum – the technology transfer company of The Hebrew University of Jerusalem – where Labs/02 gets first and exclusive access to many first-in-world tech innovations.

Through Labs/08, the organization has access to the incredible Beersheba tech scene, specifically in partnership with Ben Gurion University of the Negev – a premier academic institution, and known to be one of the best places of higher learning in Israel. This partnership includes the likes of Ben Gurion University of the Negev (BGN) Tech Transfer, BGN Technologies, BGN Cyber Security Labs, and Oazis, the BGN Accelerator.

These are just two examples of the strategic partners and deal flow sources in the Labs/02 network that enable us to enjoy first (and often exclusive) access to cutting edge technologies.

The double filtering process

One of the biggest challenges when it comes to pre-seed investments is that there are a lot of unknowns. There is no history of revenue, there is no data regarding product/market fit, and there are few (if any) customers who have validated the product and can provide valuable feedback.

In essence, there is uncertainty around the startup’s technology, and its business potential.

Labs/02 applies a unique double filtering process for evaluating early stage startups, that addresses and mitigates these major uncertainties.

The two layers of filters applied are through the Israel Innovation Authority’s robust acceptance program, and the OurCrowd business viability screening process. The IIA helps identify groundbreaking, next-generation disruptive technologies, and the OurCrowd team leverages best practices as a leading VC to ensure these technologies are viable and have significant business potential. Furthermore, by partnering with OurCrowd, we also provide our investors the assurance of seasoned and successful co-investors.

While OurCrowd and its successes are well known, the Israel Innovation Authority might be less famous, but is crucially important when it comes to Israeli tech.

The IIA’s mission is to strengthen the Israeli innovation ecosystem, and promote innovation, entrepreneurship, and disruptive technologies. The IIA has robust vetting procedures to be accepted to its prestigious programs, including evaluation by leading experts to ensure that accepted technology has:

Labs/02 portfolio companies have to pass both of these challenging vetting processes in order to be accepted.

The outcome of this double filtering process is Labs/02 portfolio companies with advanced tech, that are focused on areas with real need, potential, and a viable business opportunity – thus giving a high level of confidence in the opportunity.

Maintaining a hybrid approach

Too many investors in early stage startups give a check and then send the entrepreneur off, checking in once a quarter and otherwise waiting for results. On the other hand, there are incubators out there that give great lectures and seminars, but all companies graduate with, at the end of the incubation period, is a professional business plan. What’s more, some of the better known names in this space are more interested in ensuring that they look good, than in the welfare of the startup company. They put on a great show, but have little to show in terms of results at the end of the day.

We believe in a hybrid, venture/incubator approach. This offers the best of both worlds: funding to help the company grow to the next stage and beyond, while offering deep support, mentorship, and an incredible network.

Scaling successfully

Often, an early stage startup company needs to swim against some pretty strong tides in order to make it to the next stage. And once this next stage does happen, smaller early stage investors are locked out of future rounds.

At Labs/02, we’re proud to be part of the OurCrowd ecosystem – supporting entrepreneurs as they build incredible companies, with everything from introductions, to a network, to easier access to later funding rounds.

This point is critical: the way we structure our investments means that you can mitigate dilution risk, and with 80% of portfolio companies graduating to the OurCrowd platform, you can continue to invest in these companies as they grow.

For more information about Labs/02 or any Labs/02 portfolio company, contact partner Shai Eisen: [email protected]

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Shulamit Brodsky

Finance & Controlling

Shulamit has over 15 years of experience in finance. Prior to joining Labs/02, Shulamit served in finance positions at several companies, and in a VC. Shulamit has extensive experience working with both startups and the Israeli Innovations Authority . Shulamit holds a BA in Economics from Odessa State University, Ukraine and BA in Accounting from Open University, Israel .

Ruby Chen

Venture Partner

Ruby possesses a proven track record in initiating, leading and executing deals ( >25 investments and multiple M&As) at global industry leading companies (Hyundai Motor Company, Amdocs and NICE Systems). Ruby joins Labs02 after establishing and leading the Hyundai CRADLE Israel office creating an Israeli mobility investment portfolio of 10 startups (vehicle sensors, cyber, deep tech, and energy related). Ruby is highly networked with a great reputation in the Israeli tech scene, serving as BoD member, BoD observer and strategic advisor to multiple growth companies.

Shai Michel

Steering Committee

Shay Michel is a General Partner at Merlin Ventures, where he leads the firm’s Israeli office. Shay is a serial entrepreneur who has founded 4 companies in the CDN and IT world, and for the last 5 years has been the managing partner of toDay Ventures, an Israeli seed-stage fund. In December 2020 he joined Merlin Ventures to stand up and run its efforts in Tel Aviv. Shay has worked with startups like Cybereason, Aqua Security, Luminate and Fireblocks from their pre-seed stage to help them define their products and create initial MVPs. At Merlin Ventures, Shay sources and leads deals in Israeli enterprise cybersecurity companies. Merlin Ventures then leverages parent company Merlin Cyber’s 25 year history of working with US Federal agencies and provides the resources and knowledge necessary to help accelerate portfolio companies growth into US public sector markets.

Amir Ben Levy

Associate

Amir is an associate at Labs/02. As part of his role, Amir seeks out disruptive startups, conducts due diligence on investment opportunities, and assists portfolio companies with Business Development and Investor Relations activities. Amir has a solid background in economics and business, having spent 5 years at the Ministry of Finance where he was involved in promoting significant economic reforms. Amir is a graduate of the prestigious PPE program at the Hebrew University of Jerusalem.

Eliav Schreiber

Associate

Eliav researches and evaluates business strategies, products and markets on behalf of the Labs02 Investment Team. Following an investment, Eliav works closely with portfolio companies to assist with everyday challenges and to help prepare for further fundraising. Before joining Labs02 he led research teams as a Captain in the Research & Analysis Unit of Military Intelligence, where he served for five years. Wrapping up an honors program LLB and MBA from the Hebrew University, and passionate about innovation, Web3, photography, and snowboarding.

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Micha Risling

Advisor, Product and Technology

Micha is a high-caliber and innovative executive and strategist with 20+ years of experience and a proven record of building, launching, and leading new organizations, geographies, products and teams for start-ups and mature companies. In his last position Micha served as the SVP of Marketing, Product and Business Development at Valens. Micha has a track record of turning people into leaders. Micha’s unique career crosses industry boundaries and includes the Automotive, mobile, CE and communications industries, with special focus on the Semiconductor industry.

Loni Snape

Advisor, Marketing

Loni is an expert at helping brands tell their story to the right audiences in a meaningful way. She is the founder of 98 Marketing, a marketing firm for startups that specializes in content marketing, social media marketing, and digital strategy. Prior to founding 98 Marketing, Loni founded a music-focused live streaming and crowdfunding app aimed at helping musicians make it big. She brought musicians with millions of followers on board using social media and influencer marketing techniques. Coming from New York, Loni prides herself on working with incredible Israeli startups and helping them give across their message to successfully target the US and other English-speaking markets.

Sandeep Varma

Advisor, M&A, Business Development

Sandeep is an accomplished strategy, M&A and business development executive with an extensive history of navigating hi-tech companies through market disruption and transformational change. With close to 20 years of cross-functional leadership experience, he has driven key strategic initiatives at Symantec, Dell, and CA Technologies to grow revenue, enhance operating margins and enter new markets to increase shareholder value. Sandeep’s strategic initiatives have translated into approximately $5B of buyside, public, private and cross-border acquisitions, divestitures, partnerships and investments in the Cybersecurity, IoT, BigData, AI/ML, DevOps and broader enterprise software markets. Sandeep holds an MBA from the Kellogg Graduate School of Management at Northwestern University and a BA in economics from Wesleyan University in Middletown, CT.

Avi Douglen

Advisor, Cyber

Avi Douglen is a leading software security authority, and has been designing and developing secure applications for over 20 years. His consulting agency, Bounce Security, supports organizations of all sizes in integrating security methodologies and products into their development processes. He spends a lot of time with startups and development teams, providing architectural guidance and training them to build secure products. Avi Douglen also leads the OWASP Israel chapter, is co-founder of the OWASP Threat Modeling project, and is a community moderator on Security.StackExchange.com.

Itche Weinreb

Advisor, Sales

Itche is a Channel and Revenue Expert and former VP Sales at Checkpoint Systems. His unique perspective comes from transforming one of the biggest cyber security companies in the world, creating new revenue streams for both hardware and software products and penetrating new markets. Itche has 25 years of experience in high-tech B2B Cyber Security and Telecom companies such as Checkpoint, Cyberbit and Comverse, with extensive experience in global sales and go-to-market strategy development. Itche has an EMBA from Ben Gurion University.

Tal Gilor

Partner

Tal evaluates and implements venture investments in startups based in Bee’r Sheva and takes an active part in them with all related to strategy, investors relation, and day-to-day operations. Prior to joining Labs/02, Tal spent 11 years working within Motorola Solutions and performed multiple roles, including SW developer, SW Manager, Product Manager, and Open Innovation Manager. In his last role, Tal managed Motorola Solutions Venture Capital in Israel. Tal holds a B.Sc in Computer Science from Ben Gurion University and MBA from Bar Ilan University.

Menachem Shefer

CTO

Menachem Shefer has over 15 years of experience in the IT industry, with global roles in companies at IBM and Samsung. He received his BSc in Physics and Computer Science from Ben Gurion University and he is an MA candidate in Philosophy of Science from Tel Aviv University. Menachem has significant experience with mentoring startup companies in their R&D process to commercialization.

Michaela Lachman Menashe

Finance & Operations

Michaela has over 25 years of experience in finance, human resources, operations, and logistics. Prior to joining Labs/02, Michaela worked at several high-tech companies, such as Operative (SintecMedia), Vyyo (Phasecom), etc. Michaela utilizes her extensive experience in order to assist startup companies with growth.

Shai Eisen

Partner

With extensive experience in the tech industry and expertise ranging from engineering through operations to business and product development, Shai Eisen joined Labs/02 as an operating partner in 2021. Shai brings a proven track record in launching and growing new and innovative products across a wide range of industries and applications. Shai holds an MBA from Columbia University and a B.Sc. in Computer Engineering from Northwestern University.

Ofer Dar

Partner & CFO

Ofer Dar is a seasoned CFO with 20+ years of experience in financial positions of technology companies. Prior to joining Labs/02, Ofer served as CFO of the JVP Jerusalem Incubator. Ofer has extensive experience working with both startups and the Israeli Innovations Authority (formerly OCS). Ofer is a Certified Accountant and holds a BA and MBA from the College of Management.

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Founders

Full Name

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IntellAct: Provides airlines, airports and ground handling teams full visibility into aircraft's turnaround services

Stav Erez

Advisor

Prior to joining Labs/02, Stav was an entrepreneur focused on building startup accelerators and helping founders build businesses from scratch. Stav has a knack for taking ideas she is passionate about and bringing them to life. She co-founded SifTech, the first entrepreneurship center and accelerator program in greater Jerusalem and also founded Jnext. In 2016 Stav joined OurCrowd as Director of Business Development. Stav is a graduate of Hebrew University’s prestigious PPE program and was featured in Forbes 30 under 30 in 2015.

Moshe Raines

Managing Partner

Moshe Raines is the Managing Partner of Labs/02. Prior to Labs/02, Moshe spent 20+ years as an entrepreneur as well as working in various Business Development and Corporate Development executive roles in Israel and the US. Moshe’s experiences cover Aerospace & Defense, Semiconductors, NAND Flash, Wireless Power, and Wireless Mobility with an emphasis on M&A and capital markets. Moshe draws on his vast experience advising companies of all sizes on capital structures, capital raising, M&A and strategic alternatives to be a value-add investor. Moshe received his M.Sc. degree from University of Bridgeport, CT.
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