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Bait & switch the online mall. From the September 2000 issue Call it serendipity, call it deep
religious faith, or just call it incredible talent and smarts, but
something about 29-year-old Michael Eisenberg, the third partner
at Israeli venture capital firm Israel Seed Partners, has enabled
him to be immensely successful at such a young age. This is a man
who doesn't do much sleeping. Whether he's logging his annual 300,000
air miles, studying the Torah on a daily basis, phoning his U.S.-based
entrepreneurs at two in the morning, or fishing with one of his
three children, Mr. Eisenberg is a constant bundle of energy.
We met up with this devout Orthodox Jew for a quick dinner at
Il Fornaio in Burlingame, California, near the San Francisco International
Airport, before he caught a flight to New York. His past, we discovered,
is chock full of interesting thoughts and experiences, with stories
worthy of a man twice his age.
The great-grandson of a famous British orthodox rabbi, Mr. Eisenberg
discussed the challenges of being a venture capitalist based in
Israel. "There is great technology in Israel," he said, "but you
need to understand what the market's looking for before you decide
if the technology has a role in this world that we live in. I've
got to fly 200,000 to 300,000 miles a year so I can smell what's
being talked about at all these tables."
Our table, unfortunately, was looking a little barren. Il Fornaio
isn't a kosher restaurant, and as the rest of us gobbled a fried
calamari appetizer, Mr. Eisenberg sipped a Coke. As embarrassed
as we were for our thoughtless choice of restaurants, he was used
to visiting Silicon Valley, with its dearth of kosher eateries,
and surprisingly content. He just wanted to talk business.
In fact, as the photographer was shooting Mr. Eisenberg's best
side, the yarmulke-clad entrepreneur was pitching the shutterbug
on his latest venture, PrimeShot.com .Mr. Eisenberg immediately
phoned the CEO of this online event-photography network, David Holder,
to convince the photographer that joining PrimeShot would add 30
percent incremental growth to his business. This is a man who is
always working.
His start in the Israeli high-tech world came through a lucky encounter
with Shlomo Kalish, an Israeli fighter pilot turned investment banker.
Mr. Eisenberg started the consulting and investment bank Jerusalem
Global with Mr. Kalish because, as the story goes, Mr. Kalish had
the Israeli network, and Mr. Eisenberg spoke fluent English and
knew some investors.
Learning the investment banking business in a four-hour crash course
from some finance buddies in New York, Mr. Eisenberg raised the
money, and Mr. Kalish did the consulting. At the ripe old age of
25, Mr. Eisenberg closed his first deal, with participation from
Oak Investment Partners and Benchmark Capital. How did he gain access
to Benchmark as an unknown investment banker touting an unknown
company -- online digital imager PictureVision? "Chutzpah," he replied,
and for some reason it worked. Mr. Eisenberg cold-called Bob Kagle,
managing partner at Benchmark, who took the meeting, liked the business,
and invested.
"At the time there was a shortage of capital in Israel, a shortage
of contacts, and a shortage of understanding on how to build a business,"
Mr. Eisenberg said. "There was a window, in my opinion, and we grew
to be the largest investment bank in Israel in only two and a half
years."
Windows of opportunity are Mr. Eisenberg's specialty. After more
than two years of work at Jerusalem Global, he hooked up with Israel
Seed as the third partner. Mr. Eisenberg explained to us that his
joining a venture capital organization was due to a higher calling.
He paused here to send back his Coke so the cherry, which was not
kosher, could be removed from the glass.
"You have to understand something about me," he said. "From 1989
to 1991 I studied in a yeshiva in Israel. There was a rabbi there,
and I asked him if there was a greater commandment to live in the
periphery of Israel, where it's sparsely populated, or if living
in Jerusalem or Tel Aviv is sufficient? He told me it's all the
same, but what really matters is coming to Israel and setting up
a factory that employs 10,000 people. That still motivates me today."
While not exactly setting up a factory at Israel Seed, Mr. Eisenberg
has created jobs nonetheless: his running tab shows 1,500 thus far
and still growing. Working with a group of Jewish individuals who
all came to Israel for idealistic reasons, this VC firm, internally
dubbed the "blue-collar VCs," works hard to improve the economic
condition of their adopted homeland.
And working hard is what they do best. A common belief among those
in the firm is that there is no such thing as a self-contained Israeli
company. Consequently, Israel Seed views its added value as bringing
U.S. management to Israeli startups. But that means working extra
hard to close the deals.
Mr. Eisenberg is accustomed to spending ungodly amounts of time
convincing U.S. executives to take a leap of faith and join Israeli-based
companies. He took a former Konica president, Meg Weston, to Israel
on his due diligence tour of a new company called PrintLife Ms.
Weston liked the company and encouraged Mr. Eisenberg to invest.
But he refused unless she agreed to become the CEO. After a week
and a half of deliberation on her part and constant badgering on
his, Ms. Weston agreed to leave a 1,500-person company to be the
sole U.S. employee at PrintLife.
"It's harder for me to get these people," said Mr. Eisenberg, "than
for Bob Kagle, because Benchmark is here in Silicon Valley, they
are smarter, and their companies aren't split in half. It is a core
challenge, and I have to spend a lot of time explaining why there
are benefits to joining a company based in Israel."
So how does he get them to come on board? He challenges them with
the idea of running a global company and pays more equity then a
U.S. venture capitalist. So far his strategy has worked. Mr. Eisenberg
is responsible for bringing on former MasterCard executive Daniel
Ciporin as CEO of DealTime.com, as well as Ms. Weston at PrintLife,
Eric Tilenius at the online information service GuruNet, and Zev
Laderman at networking-marketer Tradeum
And so the evening ended, but not before we made a mad dash to
the airport to drop off Mr. Eisenberg and return his rental car.
He agreed to stay longer and watch us finish our meal as long as
we would return his rental car so he could make his flight -- the
perfect conclusion for this nonstop venture capitalist. After all,
it was a Jewish holiday the following evening in Israel, and his
family was waiting for him.
�1997-2000 Red Herring Communications. All Rights Reserved.
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