When speaking about successful Israeli angel investors, one of the first names that is mentioned is Gigi Levy-Weiss. Gigi served as a pilot in the IDF and was the CEO of 888 Holdings, one of the world’s most popular online gaming entertainment and solutions providers, until 2011. iAngels chose Gigi as a lead investor because he successfully invested in many of Israel’s most promising startups. He was involved in several high profile exits such as Playtika and has also invested in multiple unicorn companies including Plarium and Kenshoo, and looks to continue his success with current investments in MyHeritage, Bizaboo, Silo, and Air – the father company of Meerkat.
This interview with Gigi gives an in depth look at Levy-Weiss’ investment history and strategy, along with advice for new investors and observations on the Israeli startup scene.
When did you start investing in startups? What drove you to it?
I started investing 11 years ago when a friend came to me with an intriguing idea. A year later I got a nice check, and thus began the period when I invested as a hobby. For seven years I continued investing while maintaining a day job, and then four years ago I decided to angel invest full time.
What’s the most exciting exit you have been a part of?
Playtika. We got the company up running generating millions of dollars in revenues and we sold it in less than one year. I was involved to the point that I spent almost as much time working on the company as the founders did. It was truly amazing to see the company grow from two people with an idea, to an exit of over 100 million in less than a year. I was able to see, not only how the company grew but also how the founders evolved into better entrepreneurs and better managers.
What in your opinion are the benefits of Crowdfunding for the investor?
Crowdfunding is an amazing way for people to get into high tech investments without having to go through the entire process of vetting companies and understand what is happening. iAngels – best companies and best angels in the market –present a great way for people to come into the ecosystem. I would look at the value the platform brings me and how they help by bringing me the best deals out there. Understand what is it that they saw in general. iAngels provides the best value as they cherry pick from the best angels and this is why I think it is the best for the investor
What accomplishment are you particularly proud of in your career as a manager?
For me, being a CEO at the same time as being a valued investor is something that I’m particularly proud of doing. Throughout the years I was not merely an investor, but was also able to work together with the founders and help them achieve success. This was extra rewarding because it bundles together what I did as an entrepreneur and as an investor as well.
What are the most important lessons you’ve learned as an angel?
From day one, I realized that the only thing that really matters is the team. A great team with a so-so idea will manage, whereas a so-so team with great idea won’t. This point is heavily emphasized in my due diligence process. How driven are the entrepreneurs? How assertive are they? Can the be agile? How well do they work together? All of the companies I’ve invested in have changed the idea along the way, which proves that a team, not the idea, is the true recipe for success.
You have witnessed the evolution of a company into a unicorn from up close (kenshoo, plarium). What was special about these companies?
None of the unicorn companies came from cookie cutter themes. The challenge is finding the themes that are truly exceptional. And dealing with this challenge relates back to what we just talked about regarding the importance of the team. Most unique ideas do not originate from the average startup entrepreneur. Therefore in order to identify a unicorn, the focus must be on the people.
One tip for new investors?
You should not invest in only one or two companies. The reasoning behind this is that statistically speaking only one out of every ten startups will see a successful exit. Therefore 10 companies is the minimum size of an angel portfolio
While platforms such as iAngels provide investors with a higher quality of deal flow since it works hand in hand with the best angel investors in Israel, investing in only one company is never a good idea. A word of caution: investing in startups is a high-risk high-reward endeavor. Never use money you cannot afford to risk and invest it in startups.
What red flags would you tell Angels to look out for when making investments?
Anything that reflects negatively on the team is a red flag. Part of my due diligence is to go back and forth with the founding team to see how they handle challenges. If they cannot handle me, how can they handle the rest of the world?
Can you give an example of how Angels made a difference for a company?
Individuals who dedicate all of their time to being angel investors can add great value to a company. Whether it be through connecting the company on the business development side, connecting them abroad, or connecting them with more financial backing, if an angel is in love with your company it could be very beneficial.
Are we in a bubble?
A bubble is when valuations are detached from the economic value of the assets we are investing in. So let’s take a look at our current situation: are we in an era in which valuations are high? Yes. But are we in an era in which they are detached from reality? No. There is not a single field not being disrupted by a tech company. Valuations may be high but they represent the understanding that the world is changing.
Are Israeli Entrepreneurs too focused on making an exit?
No. Companies understand that if they do not move fast on acquisitions, they will lose out on the opportunity. This causes companies to have aggressive acquisition strategies in which they are willing to pay crazy premiums making it hard for entrepreneurs to turn them down.
Can you comment on the cultural difference between founders in Israel and in Silicon Valley?
First and foremost, entrepreneurs in the Valley enjoy proximity to the tech world that Israelis simply do not have. From my experience though, Israelis are much more committed to projects because they don’t like to say that they failed. This particular trait can also be detrimental at times, but in general this allows Israelis to deal more efficiently with difficulties.
I think the most important difference is that Valley entrepreneurs are more equipped to cultivate growth and market scale. This is something I try to teach to my startups. Take Meerkat as an example: they are growing exponentially every single day. Most Israeli companies would not know how to deal with such growth.
To co-invest with Gigi Levy click here!
Investor Community Manager, iAngels