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NGT
will invest in up to 4 startup's a year.
The total pre-seed investment per startup of close
to $600,000 will be generated in the following
fashion:
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Each startup
which is approved by the Israeli Chief Scientist
will be granted $500,000 in return for shares
held in trust by NGT. |
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NGT will provide
the startup with a supplementary investment
of close to $100,000 in return for shares. |
NGT can buy back the shares in trust for those startups which prove to be successful for the price of $500,000 (plus interest), within a period of 6 years.
For those startup's that NGT does not buy back the shares in trust within a period of 6 years, the government will become the owner of these shares. In the case of such startups, NGT's direct financing involvement will be limited to only the supplementary investment of $100,000.
Due to the no-risk government loan to the startups, a relatively lower exit value is needed to achieve a level of at least IRR=10.
Due to the no-risk government loan to the startups, a relatively lower exit value is needed to achieve a level of at least IRR=10.
The initial momentum which has marked the first 4 years of NGT's operation is cause for much optimism, however, in order to continue to be attractive for entrepreneurs on the one hand and to economically exploit its franchise on the other, NGT must expand its capital base.
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