The Challenge Funds
The Challenge Funds are Delaware limited partnerships focused on equity investments in Israel-related privately held and publicly traded companies. The Funds invest in companies with superior management teams and unique technologies in rapidly growing markets.
The Funds' investments are based on two major categories:
The high-tech sector and related areas.
The Funds' policy is to work closely with portfolio companies and to seek to have board representation in order to build highly successful enterprises.
Joseph Ciechanover and Edgar Bronfman Sr. found the first Challenge Fund (the "Fund") in July 1995. The Fund was one of the first investment funds in Israel and an important source of capital for alternative, Israel-based investments. After Challenge Fund I invested most of its capital, the management of the Fund together with most of its investors set up Challenge Fund II in 2000.
The funds were both set up in the State of Delaware with offshore affiliated funds.
Our purpose is to generate superior returns for our investors by building a diversified portfolio of Israel-related companies.
Criteria for Investment
The Funds' investment professionals take into consideration a number of factors when making investment decisions:
A unique product or technology aimed at rapidly growing markets.
Superior management team and board of directors.
Potential strategic partners or investors in the company.
Growth potential of the company.
Competition and barriers to entry and/or unique patents.
Financing required for further expansion and cash flow needs.
Likelihood of attractive return on investment
Liquidity channels to provide suitable exits within a reasonable time frame.
Ability to monitor the company's activities.
A venture capital fund can only provide added value if it possesses sufficient expertise. The Challenge team is comprised of highly qualified professionals with a broad and balanced range of backgrounds in different industries. The Challenge team has over 15 years of experience of working together and mapping out markets and investment opportunities quickly and effectively. In addition, Challenge can call on an extensive pool of industry experts, whose relevant know-how and networks are used to evaluate potential investments and to help our portfolio companies grow and succeed.
The Challenge team is made up of professionals with a deep understanding of entrepreneurship, finance, law, venture capital, mergers and acquisitions, initial public offerings, strategy and execution. The team has extensive experience investing in technology start-ups at various stages and guiding and managing them through exit transactions.
The Funds' distinguishing characteristics are the unparalleled experience and breadth of contacts of their principals. The Challenge team utilizes these assets to locate and evaluate high-quality investment opportunities and to assist the Funds' portfolio companies through board representation, close consultation with management and targeted industry introductions.
The Funds are an active member of the Israel High Tech Industry Association. A number of the Funds' portfolio companies support Tmura, a foundation that makes donations to education and youth-related charitable organizations.