VC Policy: Yozma Program 15-Years Perspective

22 Pages Posted: 4 Apr 2016

Date Written: January 1, 2009


This paper deals with a policy instrument supporting the emergence of VC industries. It is based on the Israeli experience with the Yozma program, which triggered the creation of the VC industry. This program dealt with specific system failures of the entrepreneurship process – the early stage equity gap and the lack of complementary assets and skills in entrepreneurial firms.

Israel’s high tech cluster development was strongly related to the development of a local VC industry (Avnimelech & Teubal 2004a, 2004b, 2004c). VC emergence in Israel was a policy-enhanced process in the sense that a targeted government policy directed to this goal (Yozma Program, 1993-1998) triggered it. Accompanying the process of VC emergence was the transformation of Israel's high tech sector toward a startup-intensive ICT cluster. We suggest that the feasibility of building a dynamic and innovative cluster, which exploits the ICT revolution, may be depended on the emergence of a capable domestic VC industry. Therefore, understanding the specific characteristics of Yozma program and the process it triggered could generate significant policy implication related to the process of VC industries and high tech clusters development in other countries.

Keywords: Venture Capital Policy, Innovation Policy, Targeted Policy, Yozma Program, Israel

JEL Classification: G24, O38

Suggested Citation

Avnimelech, Gil, VC Policy: Yozma Program 15-Years Perspective (January 1, 2009). Available at SSRN: or

Gil Avnimelech (Contact Author)

Ono Academic College ( email )

Tzahal Street 104
Kiryat Ono, 55000

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