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Itsik Moshe

Georgia should Have Glut of Startups

Government of Georgia should provide efficient support to Georgian startups definitely, otherwise their development is unimaginable, Itsik Moshe, head of Georgia-Israel Chamber of Business, noted.

In his interview with the Caucasus Business Week (CBW) Mr. Itsik talked about the Israeli experience and noted that in 1990s the government of Israel set up special “Risk Foundation” for developing startups, while now there are about 200 foundations in Israel and the government does not interfere in their operation.  There are several factors that should be satisfied for promoting startups: a certain amount of finances, timing in much proportion, good team, idea and business model, the president of the Georgia-Israel Chamber of Business, noted.

What is the main precondition for making startups successful?

Neither idea nor money is decisive for startups. You should be proficient in timing and take a decision to become a country of startups.

Who should finance startups – Government or the business sector should be also involved?

In Georgia the business sector cannot launch startups. There are many reasons for such inference and, therefore, it is desirable to share  the real experience. All international companies find it difficult to get adjusted to Georgian business, while it is useless to establish their methods in Georgia. And startup is an only field, where the Israeli experience may be exactly copied.

Israel started developing startups in 1990s by the government’ s experience. The Authorities of Israel created the so-called Risk Foundation and started financing all good ideas. The foundation used to hold 50% ratios, assist in management, sales of product. 50% of revenues were taken by the foundation and then it used to withdraw from the business. And at the next stage the business sector was joining the startup. Today there are about 200 similar foundations in Israel and the government does not interfere any more.

We know that Israel pays much attention to startups. What about the business sector’s interest?

In Israel all successful companies strive for financing startups, because this is prestige and a chance for making profits. In 2015 this process reached its peak in this sector. 1400 new startups were created. 400 companies attracted 3.5 billion USD and 69 companies were sold for 5.41 billion USD.

 Over the past years many startups were launched in Georgia, including Startup Georgia that is trying to develop the sector thanks to considerable financial support. But besides the already financed projects, there are many other people, who have certain ideas and who try to create new products in the various fields and to develop the existing ones. Besides the government resources, there is the need of other resources too. What is the alternative if the Georgian business sector does not show interest in this direction?

The business sector joins the process, when the successful field appears. The same will happen in case of startups too if it is developed by support of the state sector.

How important is the development of startups for the country and in general, why should we support development of this field?

In Israel startups of about 5-7 billion USD are sold every year. This is the field that does not need either industry or investments or plants.

 What is your position, as a businessman, towards startups? Which field are you interested in? Do you have experience of relation with young startupers?

As part of  Israel-Georgia cooperation, we have formed a format that includes promotion of startups and sharing of the Israeli experience. Our activity is a startup startups, in practice. Several companies have already entered Georgia thanks to us and they work in this field. This is not business for us.

 Several advice that you would give to startupers.

Neither money nor idea is decisive for startups, but it is important to know the problem, proportions for adapting ideas. The following correlation of factors is required for startups:  Timing – 30%, Team – 23%, idea – 20%, business model – 17%  and financing – 10%.

How good and appropriate country is Georgia for startups?

Lack of financial resources retard quick development of the country, but Georgia has human resources, talented people and this is sufficient to boost startups and the whole society will engage in this process.