How the US is falling behind Israel in helping startups and why Reg A+ is the answer in 2020

Israel has become the center for Tech startups and the future for the European cannabis markets.

Israel the Startup Paradise

Israel has gained recognition throughout the world as being leaders and helping companies grow by government-initiated subsidies and grants. Israeli startups today are fortunate to benefit from an extensive variety of programs and initiatives that are available in Israel which are not available in other countries. For example, Israel has in place over 30 programs that are tailor-made for startups to help them secure funding for their businesses.

US is the World of Unicorn Fever

The United States, unfortunately, has not seen fit to step in to help companies the same way as Israel.  This has left the United States with a culture where VC’s have dominated the investment industry. VCs give false hope too many accredited investors by inflating the value of the companies they have initially invested in.  Proof of this can be found with WeWork, Uber, and Lyft.

Silicon Valley has taken Valuations over innovation

Silicon Valley has long taken nepotism before innovation. Facebook no longer is an innovation company it is an acquisition company. Snapchat Has Fallen since its IPO has failed to produce anything new since its Inception.  YouTube which is owned by Google has kept the same format but now through influencers and monetization is the second largest search engine in the world.

Israel, on the other hand, has taken steps to help companies innovate.  The success of startups in Israel is 10 times that of the US because they look at helping to grow technology and innovation from the government down.  The US VCs don’t get a say how to value the Israeli companies that they invest in, to the extent that is dictated in America.

Israel is benefits startups

One of the benefits of doing business in Israel is its size. Israel is a small country, and as such, it is much easier for entrepreneurs to conduct market tests, and to determine the needs of their target market. Identifying and solving the problems of your target customer is one of the core elements of entrepreneurship, and the smaller size of Israel reduces the cost and the time of this process. By understanding and resolving the problems of their customers faster, Israeli companies can now go to market more quickly with a product that serves a market need. If there is a shift in demand for their product or service, it is easier to pick up on these changes and then pivot accordingly. This ease of access also enables entrepreneurs to be in touch with their business partners, suppliers, in addition to their consumers.

Private unicorns versus public listed companies

Companies and startups in Israel are helped by a lack of inflated valuations and more on the success of the product and the company itself.  In Silicon Valley if you have the big VCS like Drapper Ventures backing you,  you are more likely to succeed financially than if you have a smaller VC with the lesser-known name.  Becoming a unicorn is less about your product or your service it is more about the VC who invests.

Uber has shown what can happen when a company is overvalued at $72 billion and yet continued to raise money in Series H, I, J, K. In 2017 Uber was supposed to be the biggest and most anticipated IPO of the year.  In 2018 the Uber IPO became a disaster with the stock and company valuation less than half of what it was in 2016.

THE JOBS Act is finally good for all investors

The JOBS Act of 2012 put the ability for investors to gauge companies and help the economy and small businesses.  The problem with the JOBS Act is that it was too little too late.  Now with Title IV of the JOBS Act, more investors can invest in startups through red CF and Reg A+ which helps investors gain more and eliminate or minimize the influence of big VCS which will help smaller companies and give real valuations of companies worth based on their products rather than their initial investor.

This should be a good thing for all companies and help investors to see the true potential of companies while minimizing the influence of VC’s and their predatory practices. It is still not on par with the involvement that Israel and its government has placed in building new innovation and new companies.

Israel will dominate European Cannabis Markets

If you are to look at the Cannabis industry you will notice that Israel has become and will become the leading player in the European cannabis markets. Meanwhile, the US cannabis markets will fluctuate and many of the current publicly-listed marijuana companies will fail.  investor expectations in marijuana and CBD will lead more investors to go towards Israel as an investment versus staying with the US Cannabis markets due to regulations and lack of government support.

Securities Act of 1933

The SEC has had a tough time trying to fix the issues that they themselves created back in the 1930s. The securities acts restricting regular investors from investing certain high-risk securities.  Equity crowdfunding should have been the biggest investment vehicle since 1933.  Instead, what we have is uncertainty of who can invest, how much they can invest, and where they can invest. For accredited investors and the high net worth individuals, this has never been an issue but for Main Street investors and issuers trying to raise capital the SEC has stepped on its own toes.

Reg A+ and Reg CF will mature in 2020

Reg A+ and Reg CF should see the final demise and put the final nail in the coffin for all the VC vultures in Silicon Valley that have helped themselves by rigging a system in their favor at the expense of regular investors.  They have also helped destroy many innovative companies. Quick buyouts and acquisitions get out of long term deals and gain the maximum returns for the VCs before the company has had time to build their service or product correctly.

All investors should be rejoicing but they can now invest in the same companies at the same time and reach the same returns on investment that previously was only enjoyed by these species.

Stop the Silicon Valley Ponzi Schemes

The situation is very simple the Israeli government has purposely and effectively salt to build innovation and bring new jobs new technology it has stood behind its companies and helps fund many startups.  the United States government has left this to the feces and it caused a Ponzi scheme in Silicon Valley that is enriched the rich and locked out the 98%.

Equity Investors

If you are an investor any income now is your opportunity to finally be able to get in early-stage for as little as $500.  Look to equity crowdfunding as a new way to invest your money should be the most important part of your investment portfolio for the next 3 years.  Equity investing and Reg A+ investing will yield higher returns than the stock market or any other investment vehicle. Therefore, the investor needs to research and understand the companies that they are investing in.

Most investors do not fully understand their 401k, so this gives investors who are in the know the opportunity to build a robust portfolio and take back their earnings and build higher returns on investment.