The Midas List Europe is the definitive ranking of the top 25 tech investors in Europe, Israel and the Middle East. This year, Avi Eyal of Entrée Capital claimed the top spot ousting Index Ventures partners Danny Rimer. He recently sat down with Forbes in New York to discuss his thoughts on investing and what he looks for in founders.
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00:00 My name is Avi Ayal, I'm the co-founder and managing partner of Entree Capital.
00:08 We're a venture capital firm.
00:10 I'm based in Tel Aviv and we have offices in London, Tel Aviv and New York.
00:16 We're not first time investors, we've been doing this for many years and I think that
00:24 our own personal experiences have given us a certain view of the world and a view of
00:32 how we would like to run our businesses and we try to impart that knowledge to the founders
00:39 and those that we work together with and we hope that that makes a difference to them.
00:47 My background is, I came from a lower middle class family.
00:52 I had to pay my way through college and before.
00:57 I started my first business when I went to university and studied engineering and I used
01:02 that to pay my way through university and I think that that's kind of the background
01:10 that I've had and the way that I've worked and always been hungry and I think that's
01:15 what we try to do at Entree.
01:18 When we meet founders, we don't believe in a pitch, we believe in a process and getting
01:26 to know each other.
01:29 We look towards people that we want to be comfortable working with over a longer period
01:33 of time and again, we prefer directness, we prefer folks that have an interesting story,
01:41 things where they've overcome a certain hardship or they've worked their way into a position
01:48 or to a solution and to an opportunity.
01:53 We feel that our biggest successes are the businesses that we've been in the longest
01:58 and so it's a marriage that one needs to work at and so a lot of the meetings and the way
02:07 the founders answer the questions and the level of honesty and thoughtfulness they put
02:13 into it will get us to a fair amount of comfort.
02:18 Twenty years ago when I was raising money for my companies, it was a very old school
02:24 approach, very investment banking type driven.
02:28 A decade ago when we started Entree Capital, it was driven by an understanding of the technology
02:40 in depth and what could be, imagination and things like that but still very much tied
02:46 to that investment traditional way of evaluating companies and understanding them and I feel
02:55 that in the last couple of years, the pendulum has swung probably a bit too far into the
03:00 imagination and into the every business is a unicorn, every business can be huge and
03:09 I think that folks with less experience came into the market and I think it betrayed some
03:16 of the fundamentals that existed 10 or 20 years ago and in the last year or two, I think
03:23 a lot of that's returned and it is a generalization and there were firms on both sides, both extremes
03:30 of this argument but I think that what we'll see is fewer venture firms over the next 10
03:39 years with a lot more due diligence and a lot more expectation of financial and other
03:50 business driven metrics at an earlier stage.
03:59 I think October 7th was a tragedy, literally a genocide and in many respects a wake up
04:08 call not just for Israel but for the rest of the world.
04:12 As regards our funds specifically, I'm extremely grateful for the people that we have around
04:20 us who stepped up above and beyond.
04:26 Some people were drafted, some folks undertook unbelievable volunteer projects.
04:33 We've all worked double hours to help our portfolio, to deal with where there's been
04:41 tragedy, to deal with those folks who've been affected and I think we've all contributed
04:48 and feel like we, even though we've done a lot like everyone else, everyone feels they
04:52 should do more.
04:53 By and large I think it's a small event in the next five decades of companies and invent
05:05 things and everything else but I think it's been a big wake up call and I think it's mobilized
05:12 and brought Israel as an ecosystem and by and large Israel as a country back together
05:22 again in conversation of its values and what they want, what the country needs.
05:35 Thank you for including me in the list a number of times now and it's a nice reward for our
05:43 firm to know that the work that we all do together results in some recognition and we
05:52 feel that it's an opportunity that certainly in this year and at this time that Israel
06:01 is on the map and that as a venture firm which is rooted in Israel we can do and do continue
06:10 to do business both in Israel and outside Israel and that even in the darkest times
06:17 there's a ray of light and hopefully we can take this as a signal to other firms and to
06:26 other founders to say there's a value system and there's a certain way of doing things
06:31 and hopefully that will get us our fair share of success.
06:35 Thank you.
06:36 [END]