Call for Proposals for the Establishment of Three New Venture Incubators

Summary:

Program Description

The selected concessionaires in the competitive process will receive concessions to operate Venture Incubators in Israel for a period of up to 5 years, during which they will be able to benefit from the leverage of their investments in in the initial stages, through various grants from the Innovation Authority and the Start-Up Fund in particular, including the Pre-Seed, Seed, and Series A programs.

In addition, the Venture Incubators chosen as part of the call for proposals will be able to receive cumulative grants of up to NIS 40 million over 5 years, for the operating expenses (OPEX) of the venture incubator and for capital expenses (CAPEX) such as the purchase of equipment for a central laboratory for the free use of the venture incubator companies.

Who can apply for a concession?

A Consortia comprised of Venture Capital Funds and large Companies with synergistic goals.

What will the Technological Incubators do?

The incubators that will be selected as part of this competitive process will work to create technological ventures from diverse sources, including the commercialization of IP from Israeli and foreign research institutions into new start-up companies, or entrepreneurs with a groundbreaking technological idea and significant market potential. The incubators will define their own structured and innovative mechanism for venture creation.

What can you get?

The incubator will be able to invest in technological ventures through the variety of grants* from the Israel Innovation Authority:

In the Venture Creation phase (before establishing a company):

• “Ideation” (“Tnufa”) fund for promoting ideation among entrepreneurs: a budget of NIS 250,000 with an 80% grant rate
• Applied research in the academia to direct academic research for commercial application: a budget of up to NIS 810,000 with a grant rate of up to 90%
• Commercialization of IP from a research institution for external validation of research results: a budget of up to NIS 3,400,000 with a grant rate of up to 66%

In the capital investments in start-up companies stage:**

• Startup Fund – Pre-Seed Program: an investment round of up to NIS 4,500,000 at a 60% grant rate or a grant of up to NIS 1,500,000
• Startup Fund – Seed Program: an investment round of up to NIS 15,000,000 at a 50% grant rate or a grant of up to NIS 5,000,000
• Startup Fund – Round A Program: an investment round of up to NIS 75,000,000 at a 30% grant rate or a grant of up to NIS 15,000,000

For more information about the Startup Fund

* The term and conditions of each grant type may change from time to time at the discretion of the Innovation Authority.
** The incubator will undertake to invest the majority of the first investment round in each incubated company, minus the Innovation Authority grant from the funding round.

Criteria

Threshold Conditions

1. The concessionaire is a corporation lawfully incorporated and registered in Israel and operates pursuant to the laws of the State of Israel for purposes of profit
2. The concessionaire has financial resources and commitments vis-a-vis the Innovation Authority concerning the availability of financial resources in the scope of at least NIS 120 million for the benefit of the incubator and the Incubator Companies, for the length of the concession period
3. The proposer has a professional team designated for incubator management that includes at least a Chief Executive Officer, a Chief Technology Officer and a Chief Business Officer, each in a full-time position
4. The total scope of direct or indirect holdings, by shareholders, in the concessionaire , of non-profit entities will not exceed 20% (fully diluted). They will not be controlling shareholders of the concessionaire, either together or separately
5. A shareholder of the concessionaire , the proposer itself or a related company of the proposer or of the concessionaire’s shareholder, will be a controlling shareholder in not more than two incubators operating by force of:
   • This Incentive Program
   • Incentive Program No. 3 Technological Incubators
   • Incentive Program No.22 Biotechnological Incubators
   • Incentive Program No. 29 Technological Innovation Labs
   • Incentive Program No. 39 Entrepreneurship Incubators in the Periphery
6. The concessionaire or one of its shareholders is not an owner of restricted accounts and is not in the process of receivership, freezing of proceedings, liquidation, etc
7. The concessionaire and its controlling shareholder comply with the Industrial Research and Development Regulations (Conditioning of Approvals – Minimum Wage), 2011
8. No financial support was received from a governmental entity or the Innovation Authority to execute the proposed activities, directly or indirectly, that was not according to this Incentive Program’s provisions

Criteria:

1. Scope and quality of the experience of the concessionaire and/or of its shareholders (10%)
2. The added value of the concessionaire and its shareholders (15%)
3. Scope and quality of the experience of the concessionaire’s management team (20%)
4. The concessionaire’s business plan (30%)
5. Funding sources of the concessionaire (15%)
6. General impression of Committee members (10%)

Application Process

1. Read the incentive program and procedures carefully, ensure compliance with all threshold conditions according to clause 4.3 in the incentive program, and follow the instructions in the incentive program, procedures, and this call for proposals.
2. Register to the personal area on the Israel Innovation Authority Hebrew website
3. When in the Hebrew site, note to fill out the online form and attach all the required documents as detailed in the call for proposals instructions, including:
   • Mandatory document for the threshold conditions application:
     • A copy of the concessionaire’s incorporation certificate
     • Annexes 2-4 according to article 4.3 in the incentive program
     • CV of the concessionaire’s staff and their employment agreement with the proposer
   • Mandatory documents for the competitive procedure application:
     • Proposal form (annex 1) in .DOCX format
     • Proposal form (annex 1) in PDF format, with electronic signatures (not scanned), alternatively, a clear, readable, signed scan.
     • Budget document (Excel format)
     • A concessionaire who believes that parts of its proposal include commercial secrets and/or business secrets should attach an additional copy to its proposal with the confidential parts blackened out in a clear and unequivocal manner. For the record, no parts of the proposal should be left out, but parts that are confidential – in the concessionaire’s opinion – should be blackened out. The concessionaire must also include a list of all blackened parts and justify his position.
4. Concessionaires that comply with the threshold conditions will be invited to present their proposal to the evaluation committee
   • Concessionaires must follow this call for proposals webpage for any updates and notices concerning this call for proposals
   •  It is made clear, that in case of any conflict or inconsistency between this call for proposals notice and the incentive program and its procedures, the latter will prevail.
   • This call for proposals notice shall not obligate the Authority to choose any proposer or to make any engagement with any proposer
   • This call for proposal notice is a non-binding translation of the Hebrew notice. In any case of conflict or inconsistency, only the Hebrew version will prevail.

Timetable

1. 25 May 2024, 14:00 ILT – last date for submitting questions for clarifications. Submissions to this email address only: bidding.incubators@innovationisrael.org.il
2. 17 June, 2024 – last date for the Authority to provide responses for clarification questions.
3. 17 November 2024, 14:00 ILT – last date for submitting proposals

         Late proposals will not be accepted