Tel Aviv: Hotbed of Startup Culture and Money

The startup boom is quickening, big companies are adding startup accelerators, and the government is making it easy for companies to bring in foreign talent.

Many startups contemplate where to plant their roots--both to build and get funding for their companies. Leading contenders are usually Silicon Valley and Silicon Alley. However, the time has come for startups to add another city to their short-list of desirable homes: Tel Aviv.

Much as been recently written about the startup boom in Tel Aviv, known colloquially as Startup Nation, the city with the highest density of startups in the world.

The local government is exceptionally proactive in making the city a promising place for entrepreneurs. The city's efforts to position itself as a hub of the global high-tech entrepreneurial community will be showcased this week with its five-day Digital Life Design(DLD) festival, driven by the mission to create a network of innovation, digital prospects, science and culture.

The city is installing WiFi in all public areas. Last month, Tel Aviv had 60 Wifi hot spots; 20 more will be installed in the near future. This means that creative teams can work where they please, even outdoors.

The hope is that an influx in foreign innovators will bring in foreign investment. So far, it’s working in spades. The country’s startups attracted more than two billion in funding last year alone, a quarter of it from local private equity firms.

It’s easy to get visas for your employees.

Tel Aviv’s local government is pushing for legislation to create the Startup Visa, allowing foreigners with creative muscle to establish residence in Tel Aviv. Obtaining a work visa in Israel is otherwise a bit of a headache (unless you’re a Jew making aliyah, meaning you move to become a citizen.)

Leo Widrich, co-founder of the social media app Buffer (used by more than 1 million people worldwide to manage their social networks), said the team moved out of San Francisco because their engineers couldn't get visas to work in the U.S. The company's founders chose a Tel Aviv incubator for its buzzing startup community and pleasant weather.

There are lots of other startups in town.

Startups are popping up all over Tel Aviv, and they are not just home-grown Israeli companies. Israel as a whole is home to more startups per capita than anywhere else in the world. More companies are listed on NASDAQ than all of Europe. And of all Israeli cities, Tel Aviv is the most vibrant, with more startup action per density than any other city. And it has beautiful weather to boot.

Avner Warner, the head of international economic development for the municipality’s Tel Aviv Global City initiative, encourages cross-pollination of foreign and domestic companies, says "The goal is now to encourage 'foreign entrepreneurs' to join the local ecosystem." It’s useful to consider that the startup environment is supported by Israeli and international investors, many of whom are members of the Jewish diaspora around the world who want to support both the startups but also pour money into the country's stream of commerce.

By many counts, Tel Aviv is currently home to approximately 5,000 startups and at least two-dozen accelerator/incubator programs. Significantly, some are run by Microsoft and Google.

Microsoft and Google have joined the fray.

Recognizing that that Tel Aviv is a hotbed of activity, Google recently opened Campus Tel Aviv, powered by Google for Entrepreneurs. According to Google, "Campus Tel Aviv is a hub for entrepreneurs and developers located in the heart of the startup nation. We offer a space for developers and entrepreneurs to attend and organize events with speakers, mentors and other entrepreneurs; a 'hack space' and device library to develop and test new ideas; and Google Launchpad, a two-week boot camp for early stage start-ups helping with subjects including user interface, product strategy & technology, marketing, business development and more."

Similarly, Microsoft opened its first startup accelerator in Tel Aviv 18 months ago and is already hosting its third batch of young businesses. "The idea is to build extraordinary startups around the world and provide them unparalleled routes to market. We’re giving startups a 'head-start,' and Tel Aviv is the perfect place to do it," says Zack Weisfeld, senior director at Microsoft Ventures. Microsoft provides these companies with a creative workplace, business opportunities, mentors, software tools, and access to customers and partners. But it doesn't take an equity stake. The results so far are impressive. According to the company, 85 percent of Microsoft Ventures Accelerator graduates from the first two classes raised an average of $1 million each.

Whether it’s the startups themselves, the international and domestic investors, the ecoystem for foreign and domestic companies, or the accelerators, it's certain Tel Aviv is emerging as a serious rival to other global tech hubs and is opening its doors to the world. Now is a perfect time for for startups to pack their bags and become a part of Startup Nation.

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