Glilot Capital Partners Shares Its Profits With the Entrepreneurs it Back
Glilot Capital Partners, which invests in early-stage startups, and has a quarter of a billion dollars under management, has announced that its new fund will share its profits with the entrepreneurs in which it invests. Glilot is the first and only fund in Israel, and one of the few worldwide, to do so.
Normally, the managing partners at a venture capital fund are remunerated based on a percentage of the fund’s profits. These profits are calculated after the repayment of the investment to the investors has been completed, followed by distribution of the profits among the fund’s partners. Glilot is taking a different approach by setting up a mechanism that allows the fund’s profits to be distributed not only among the partners and managers, but also among the entrepreneurs in which it invests.
This way, Glilot is creating strong joint interests among the portfolio companies, while assuring entrepreneurs a twofold gain: one from the success of the company they founded, and the other from the fund’s general success. This combination of interests will strengthen the cooperation among the companies and help first and foremost young companies to break quickly into the market, cope with challenges and grow rapidly.
Furthermore, the scheme will increase the entrepreneurs’ chances of success, which will not depend solely on their own company’s success but also on the success of the fund’s other portfolio companies. Furthermore, the scheme will encourage entrepreneurs to build a solid and profitable company rather than aiming for a fast exist, since they will enjoy profits before their company will be sold or goes public.
“During most of our careers we have been entrepreneurs, and that is also how we manage the fund. We will do everything to enable our companies to succeed, at least as long as the entrepreneurs themselves believe that’s possible,” stated Kobi Samboursky, Glilot Capital Co-Founder and Managing Partner. “We are in the same boat as our entrepreneurs, and what better way to prove that we are with them all the way then by sharing our profits with the entrepreneurs we back?”
“Our thought was that entrepreneurs can offer each other meaningful help, so why not bring them together in a single community?” added Arik Kleinstein, Glilot Capital Co-Founder and Managing Partner. “Sharing profits will provide the entrepreneurs with an incentive to support each other by sharing their experience, offering support or even helping to close a deal with a customer.”
Glilot Capital Partners was founded in 2011 by Kobi Samboursky and Arik Kleinstein, and currently has $240 millionunder management. Its portfolio includes companies such as CyberX, YouAppi, Intsights, Exceed a.i, Protego, BrandTotal, Inflowz, Mintigo, Genoox and Upstream. To date, Glilot has invested in 20 companies. Six of its first eight portfolio companies were acquired by global corporations: Aorato by Microsoft, Insightera by Marketo (which in turn was recently acquired by Adobe), LightCyber by Palo Alto Networks, Porticor by Intuit, BlazeMeter by CA Technologies and Solebit by Mimecast.
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Glilot Capital Partners