Israel, experimentation
Yozma, the venture capital catalyst
Israel put 100 million dollars of public money into ten hybrid venture funds from 1993, with foreign partners and a buy-out option, and by 2002 the country had 131 venture funds with around 10 billion dollars under management.
10,000,000,000 US dollars, capital under management by israeli venture funds, 2002. 100,000,000 US dollars, government capital that started yozma, 1993. OECD, Venture Capital Policies in Israel, STI working paper 2003/3, retrieved 2026-08-27.
The move, and what it needed
The state capitalised new private funds rather than picking companies, required each fund to bring a foreign venture firm as partner, and sold the government's stake cheaply to the private partners once a fund worked, so the subsidy was the upside, and it expired by design.
Preconditions
- A stock of investable technology and founders already present
- Foreign venture firms willing to teach the craft for cheap equity
- A government able to exit a working programme instead of scaling it
Where it travelled: Yozma is the most copied venture policy in the world, and most copies fail on the same two points: no credible foreign-partner requirement, and no willingness to sell the state's stake at the moment of success.
Limits: Attribution is the weak joint: the ten funds were one cause among several, alongside a million-person skilled immigration wave, military technology spillovers and a US stock market that wanted Israeli listings, and the OECD paper credits Yozma as catalyst rather than cause. The 10 billion figure is capital under management, not investment made or returns earned, and roughly 70 percent of it was foreign money. The programme was deliberately closed once private capital led, which is why the status is concluded.
This record describes what Israel delivered. It is linked to Venture capital investment because no comparable dataset measures that capability. It does not affect the score or confidence.