A recent survey conducted by Startup Nation Central, a non-profit organization dedicated to safeguarding the future of Israeli high-tech for the country’s economic and security strength, has unveiled concerning phenomena among investors and executives in the Israeli high-tech sector.
The survey, which is the first of its kind and the most comprehensive conducted in recent times, sheds light on the negative impact of the legal changes on the recruitment of investors in Israeli high-tech companies.
According to the survey, almost 80% of the executives reported canceling meetings with investors in the aftermath of the legal revolution, and more than a quarter of the companies (27%) are considering moving their employees outside of Israel.
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The CEO of Startup Nation Central, Avi Hasson, attributed this decline in investor trust to the legal revolution, stating, “Investors’ trust in Israel has been damaged in a very short period of time.”
The survey was conducted among 1,142 Israeli high-tech executives, including CEOs and founders of technology companies, managers of investment companies, and CEOs of international companies, representing 873 companies. Notably, 84% of the investors who participated in the survey expected a negative effect of the legal revolution legislation on the companies they had invested in, and 80% of the startups anticipated a negative impact on their companies.
Further findings from the survey revealed that 78% of the investors estimated that they would transfer the jurisdiction of the headquarters of the companies they invested in, and 42% of the companies are considering changing the registration or jurisdiction of their companies. This underscores the growing uncertainty and potential ramifications of the legal changes on the Israeli high-tech ecosystem.
Commenting on the survey results, Avi Hasson, expressed concern about the positions of Israeli tech and the anticipated future activities of various stakeholders, as well as the potential additional damage to the Israeli economy. However, he remained hopeful, stating, “If real negotiations take place, I believe that the Israeli innovation industry will also succeed in the current crisis – as it has succeeded in many crises in the past.”
The survey findings highlight the significant impact of the legal changes on the Israeli high-tech sector, with implications for investor confidence, company operations, and the potential relocation of employees. As the situation continues to evolve, stakeholders in the Israeli tech ecosystem will closely monitor developments and seek solutions to address the challenges posed by the recent legislative changes.
