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Surviving,
Ltd. |
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| Ma’ariv
Business |
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April 30, 2002 |
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Green Venture Capital functions
as a holding company for several venture capital funds (some
public and some private), through which it controls about 120
different technology concerns in Israel. It is no secret that
Green has failed in its mission. The company’s controlling
shareholder, Yitzhak Teshuva, fell in love with the high-tech
sector during the Internet boom of 2000 and aggressively increased
the company’s involvement in the sector, acquiring stakes in
Israeli venture capital funds, including the Samurai Ventures
investment firm, in order to create the technology sector’s “fund
of funds.”
With the devaluation of the technology companies and the capital
funds – due both to risk and to the failure of start-up companies
to pan out – Green began to record large losses, while laboring
under a huge debt of over $70 million (to Bank Leumi). The
company’s value plummeted by about 99%, to a low of $8 million.
Although it has been clear to all that the high-tech industry
has entered a period of steep decline, with the bottom not
yet in sight, Green indicated its recognition of this situation
only last Wednesday, with the announcement of its $650,000
loan to Samurai Ventures. The loan is meant to enable Samurai,
which was founded for the purpose of investing in promising
high-tech companies and ventures, to invest in lucrative real
estate ventures abroad. Samurai is thus admitting that it sees
no future in the technology sector. In the meantime, until
things begin to move, the company is changing its direction
and starting to learn a little about the real estate field
which Teshuva, who gave the loan to Green and via Green to
Samurai, knows so well.
$650,000 is not a substantial amount, particularly where real
estate is concerned. But beyond the loan’s practical significance
is the decision to change Samurai’s corporate mission, at least
in part, so that it will be able to continue holding on to
high-tech companies. Green, which became a barometer of the
venture capital industry due to its extensive involvement with
technology companies, symbolizes the sorry state of this field,
which in the not too distant past was considered to be the
key to ensuring a bright future for Israel.
Teshuva, one of Israel’s most successful businessmen, already
knows that his gamble on high-tech was, to say the least, unsuccessful.
But his commitment to Green – into which he recently poured
tens of millions of shekels through its rights issue – indicates
that he hasn’t given up – as of now.
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