"When we look for founders to back, we’re actually looking for the ones who don’t have that experience"
Nicole Priel, VP of Ibex Investors speaks to Michael Matias about the differences between the Israeli and American investment ecosystem
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Tell me who you are.
I grew up in London, Maryland, and New York. At the age of 16, I was working on the floor of the New York Mercantile Exchange, the commodities floor, working for natural gas and oil traders. That really propelled my career into the world of investments.
Why at 16 are you doing this?
I realized that you have to give it your all. If you really want to get ahead in life, you need to put your best foot forward. It was the beginning of experiential learning, and I wanted to build my resume and position myself well career-wise.
What else have you done leading up to and through college?
I volunteered a lot in New York. I started the Zionist Action Committee in high school, and then I went up to Boston in 2005 for university. I studied abroad at Hebrew U when I was 19. That’s where I met my husband. I had been exposed to this whole startup tech ecosystem in Israel, but I was really interested in learning more about it when I returned to Boston. I shot off 24 cold emails to all the VCs in Boston volunteering my time. Flybridge Capital Partners took a chance on me, and it was a great experience.
Talk to me about your experience in that VC.
I set up their social media pages. I created their LinkedIn page. They were undergoing rebranding, so I was helping with a lot of marketing efforts. I sat in on pitch meetings with brilliant entrepreneurs. I even did some due diligence. It set me up well to do VC post-university.
After university, what happens next?
I graduated in 2008. I got a job at ExxonMobil in a management training program for two years. From there, I moved to Israel and rejoined the investment world.
Why choose the investment route?
Half joking, half serious, I’m in love with babies. Once they’re one, not so interesting. Startups for me are like babies. When you’re helping companies from their inception to grow, you pick them up when they cry, you show them the way. It’s very similar to helping nurture small babies. I love cute babies; I love exciting startups. It really gets me going, waking up every morning thinking about how we can help grow this business today.
How many deals have you been a part of?
I have been working in the investment field for over 10 years. At Ibex, we invest across all stages. We invested in 23 Israeli companies since 2012.
What is Ibex Investors?
Believe it or not, back in 2011, the founder of Ibex, this guy from Denver, reads the Startup Nation book, gets on a plane, comes to Israel for a trip, gets back to Denver, and says, “Wow, we’ve got to do something in Israel. The innovation there is out of control.” They started with a really small fund, and they just started investing in private and public Israeli companies.
Do you meet all sorts of interesting startups and bring it back to the group and decide together whether to invest?
That’s basically it. I meet lots of companies. Nowadays it’s mainly on Zoom. We conduct some due diligence. We do have an investment committee to decide if this is a go or no go. With the last investment we made, we did the deal on lockdown. From the first meeting ’til the term sheet, it was 10 days. Despite the miles between myself and my partners in Denver, we move pretty quickly.
What have you observed about the Israeli ecosystem compared to others?
I did not spend time in Silicon Valley, but the ecosystem in Israel is incredibly collaborative. Everyone really lends a helping hand to everybody else. There’s a very open forum for discussion with other funds. We share deal flow; we share ideas. Founders are always willing to help younger founders and mentor them.
Why do you think that is?
It’s David and Goliath. We’re a country the size of New Jersey that’s mainly made up of sand trying to break into the big old United states of America. We’re up against a great challenge, and we need everybody’s participation and cooperation to surmount that.
Is your decision to focus on the Israeli ecosystem a professional strategy or your love for the country?
It’s a mixture of both. Israel’s a great place to deploy capital and be able to get those returns. Personally and professionally, it also obviously strikes a chord in my heart to be a part of it and to help that.
What are some things you’ve observed with young entrepreneurs versus serial entrepreneurs? What type are you most excited to work with?
Maybe this is a bit unconventional, but serial entrepreneurs, they’re great. They know the ups and downs, and when they come up to bat to do it again, it says a certain thing about that person. But when we look for founders to back, we’re actually looking for the ones who don’t have that experience, who have a chip on their shoulder, who feel like they have something to prove, and they’re determined to make it big.
You are foregoing all that experience for the passion, motivation, and initial excitement.
It means there is more hand holding. We learn from our mistakes, but we are prepared to roll our sleeves up and help them. I think that they also have a lot to teach us. We’re happy to give them the chance.
How much understanding is there between the two parties on how intensive this relationship is going to be?
You never know until you jump in. That’s why so much of it comes down to the team and the chemistry between the investor and the founders because you’re literally spending day in and day out with each other for five, 10, maybe 15 years. All those expectations should come up in the beginning with the understanding that things can change, and things will change.
Is that something you can aim to really understand within 10 days?
When you think about it, you develop an intuition and a gut instinct within the first ten minutes of meeting someone. You know pretty much from the outset whether this is something that could potentially work. Sure, I could spend three months speaking to every person who’s ever encountered the founders, but is that really going to make a difference? Probably not.
More funds are taking ownership over this quick decision making. Do you think that is because there are more VCs looking for great talent, which is scarce? Or because the VC wants to be more efficient?
Not necessarily all companies are venture appropriate. There’s this misconception that if you want to start a company, you need to go out and take venture. I feel very strongly that venture capital is not the model for most businesses out there. There’s alternatives, and entrepreneurs need to keep that in mind. Depending on the VC, yeah, efficiency is key. We’re looking to do three to four investments a year, so there’s a lot of deal flow in the pipeline.
What are three words to describe you?
I always live by the mantra: You never know. So many people are afraid to take a leap, afraid to make a change, unsure of what’s to come. I say, “Hey, you really never know what’s gonna be.” This could turn out to be the best decision of your life. Or you think you’re going to do X, but it turns out to be Y.
Michael Matias, Forbes 30 Under 30, is the author of Age is Only an Int: Lessons I Learned as a Young Entrepreneur. He studies Artificial Intelligence at Stanford University, while working as a software engineer at Hippo Insurance and as a Senior Associate at J-Ventures. Matias previously served as an officer in the 8200 unit. 20MinuteLeaders is a tech entrepreneurship interview series featuring one-on-one interviews with fascinating founders, innovators and thought leaders sharing their journeys and experiences.
Contributing editors: Michael Matias, Amanda Katz