A couple of weeks back, I wrote about Israel’s new “Angel law” to promote investment in seed-stage companies by private individuals. Great idea, although the launch seems to be full of bureaucratic bugs, reminiscent of a computer programme that should not have passed quality control.

Interestingly enough, Paul Green, an IIB colleague, has just blogged about a similar proposal from the UK. On the surface, it fortunately appears to avoid many of the tangles, which the mandarins of Jerusalem have seen fit to insert.

That said, you have to wonder just why Israel needs such a law. IVC is a resource centre, located just outside Tel Aviv, and records much of Israel’s high-tech activity. It’s March newsletter reveals a phenomenal array of investment news. Just listing a few items at random: –

• Video advertising management and optimization technology company HIRO Media has announced that it has closed a $5 million funding round.
• Dragonplay Ltd. has raised $14 million in its first financing round led by Accel Partners, and joined Founder Collective and Entrée Capital.
• Android apps ad company StartApp Ltd. has raised a further $4.3 million from Ascent Partners and Cedar Fun.
• Mobile website developer DudaMobile Ltd. has raised $6 million from Pitango Venture Capital.

All very positive and encouraging, and the newsletter is much longer and more detailed. However, you cannot ignore the fact that there is a need for an angel law. There is still a lot of innovative commercial activity taking place in the Holy Land, which is not being matched by the money available in private pockets – and I myself can vouch for several stunning projects deprived of resources.

The Israeli Ministries of Finance and Industry should be congratulated for taking a proactive approach in trying to bring the two sides together. However, they have yet to appreciate the benefits of the boring style of the Brits.

That is to say that as the civil servants try to control all aspects of commerce and then demand that profits are only achieved in set or limited ways, the results are liable to be very disappointing. There will be more chat and printed legislative paper rather than cheques being transferred between bank accounts. In the end, the Israeli companies cited above are in danger of being the exceptions to the rule.