Israeli innovation wins hearts, now needs to win minds
Israel’s reputation as a global startup powerhouse is well earned, yet a new study published in the Journal of Business Strategy reveals a striking perception gap that Israeli entrepreneurs must address to unlock international capital.
Dr. Eliran Solodoha, senior lecturer and head of entrepreneurship research at Israel’s Peres Academic Center, surveyed 151 experienced investors, 87 Israeli and 64 American, who each assessed the same Israeli blockchain gaming startup developing an NFT-based racing game. Israeli investors, familiar with the local ecosystem, culture, and networks, perceived the company as less risky even when information was incomplete. American investors, relying on formal and measurable data, found that high innovation amplified uncertainty rather than reduced it.
The study’s core finding reframes a widely held assumption: innovation does not automatically reassure foreign investors. For local investors, a compelling innovative vision compensates for information gaps. For foreign investors, that same vision, absent supporting evidence, signals a risk they cannot easily verify or quantify. The research draws on signaling theory, which holds that entrepreneurs use markers such as patents, partnerships, and early traction to demonstrate quality, but shows that investors interpret those signals differently depending on their familiarity with the market.
The opportunity here is clear and actionable. Israeli entrepreneurs targeting international funding can close this gap by pairing bold innovation with structured transparency: financial data, evidence of real-world usage, partnerships with recognized entities, and English-language reporting frameworks. Israel’s startup ecosystem has already demonstrated world-class creativity; building the verification infrastructure to match it will transform impressive pitches into closed deals.
Read more in Ynet.
