S.F.‘s Blumberg Capital to try its hand at Israeli startups

Taragin pointed out that the founder of Blumberg Capital, Sha'ar Zahav member David Blumberg, has been active as a consultant to Israeli high-tech companies -- most notably Check Point Software -- since the early 1980s.

According to Taragin, an Orthodox Jew, the idea to start an independent VC fund managed by Blumberg came from Lord Jacob Rothschild of RIT Capital in London. Blumberg Capital was established in February 2000, and its investors include RIT Capital, Silicon Valley Bank, and CEOs of established high-tech companies.

Taragin said he expects the fund to invest 25 to 30 percent in Israeli and other foreign companies. Blumberg Capital will typically invest $1 to 2 million in a company, for a 15 to 25 percent equity stake, and then become a very active member of board.

"There is a lot of doom and gloom out there nowadays," Taragin acknowledged, "but this is an excellent time to be either a VC fund or an entrepreneur."

"From the point of view the funds, valuations are down. On the other hand, entrepreneurs will find advantages, too. There is less competition, and finding both affordable office space and good personnel is easier these days." Taragin emphasized that the added value the fund brings to an Israeli high-tech company is the firm's Silicon Valley connections.

"Throughout the years, Blumberg has worked closely with just about every major VC fund -- Lightspeed, Sequoia, Mayfield, Kleiner Perkins -- and high-tech companies such as Oracle and Hewlett-Packard on the West Coast," he said.