Gateways to Israeli Tech
Daniel Cohen, Viola: Web3 is the next revolution
Speaking to CTech as part of a special investor survey, Daniel Cohen, General Partner at Viola Ventures, says he looks for startups targeting a big market and entrepreneurs that have a chip on his (or her) shoulder
“Web3 has become the latest buzzword for what crypto and blockchain are all about. It’s the next revolution that will enable us to interact with and dramatically change a lot of the applications which we’ve been seeing emerge in the past 10-15 years”, says Daniel Cohen, General Partner at Viola Ventures.
Cohen shared his views in CTech’s exclusive investor survey conducted with participants of the Poalim Hi-Tech and Calcalist Road Show event. The event brought together dozens of startups who pitched their venture to more than 20 leading Israeli investment groups and investors.
What trends are you most excited about investing in?
We’re looking at a lot of trends, especially Web3 (or Web 3.0), which has become the latest buzzword for what crypto and blockchain is all about. It’s the next revolution that will enable us to interact with and dramatically change a lot of the applications which we’ve been seeing emerge in the past 10-15 years. We’re also excited about digital health. I think that the aging population creates many opportunities for direct medical-related technologies and those that are focused on extending longevity.
What’s your latest, most exciting investment?
Well, we love all our children equally. Referring to the above question, we invested in Lin Health, an online medical service for people with chronic pain. It reflects the need for better healthcare in the U.S., and promotes the usage of a more holistic approach to healthcare vs. point solutions.
Which industries seem well-positioned to thrive long term? What companies are you excited about (whether in your portfolio or not), which founders?
Unfortunately, I think that cybersecurity will continue to thrive for a while. On a more positive note, we’ve been excited about gaming as the future of media and entertainment.
What areas are either oversaturated or would be too hard to compete in at this point for a new startup?
These days everything is oversaturated. There are pockets of fintech and cybersecurity that are overinvested in, so you need to find the opportunities that are still open in these oversaturated markets and put your money there.
What are you - as an investor - looking for in an entrepreneur or a startup?
I’m looking to enter a big market with an entrepreneur that has a chip on his (or her) shoulder.
What is your approach to VC involvement in the management of the companies they invested in?
We do not participate in the management of companies, they do that. We see ourselves as a support system, as a resource, and hopefully as someone that can provide value to the entrepreneur but they’re the one calling the shots.
What should be the level of a fund's involvement in solving a company's HR problems?
I think right now that HR is one of the challenges for startups. We’ve just appointed a partner to manage everything related to HR. We see this as an important form of support that we can provide to our portfolio companies.
Where will the solution to the HR crisis come from?
I think all of the above is the main issue. On one hand, it’s very difficult to get people to move to Israel. In the U.S. that all works differently. If a tech company needs someone to relocate from Minnesota to California, they can. However, it’s much more complicated to have foreign workers who are not Jewish relocate to Israel. I think that Israel’s character as a Jewish State that may offer better benefits to Jews may complicate things for those that have no ties to Israel whatsoever, but are simply here to do business. There’s another issue of encouraging foreign immigration, since Israel’s character is defined as being the Jewish State and not as an all-inclusive state.
Education investing in this is also a big part of the long term solution. Transportation - if we had a train that would take 30 minutes from Beer Sheva to Tel Aviv. It would solve a lot of issues.
How long will the current upsurge in wages continue?
It will continue for a long time.
How can the damage of the growing gaps between tech workers and general workers in the Israeli economy be minimized?
I agree that it’s a problem, but have no idea what the solution is.
Your golden tip for an entrepreneur presenting a pitch.
We’re looking for a great story. When you think about a pitch, it’s just a storytelling exercise.