The security warming did not help cool the storm caused by the tweet of Papaya Global CEO Einat Gaz, who announced that in protest of the legal reform of Justice Minister Yariv Levin, the company would take its money out of Israel and abroad.
A notable commenter to the tweet was none other than one of the company's investors, the "Sharks" show personality Dobi Francis, who claimed in a LinkedIn post that "sometimes venture capital investors and company managers forget who owns the house", and in an interview with Israel Hayom later, Francis continued the critical line against Gaz's step and statement, and said: "Let's be professional - if you are a politician, then be a politician to the end and don't do politics with savers' money; if you are a CEO - you will manage to the end."
Justice Minister Yariv Levin, photo: Oren Ben Hakon
The response according to Frances was not long in coming, and this time the responder is one of the main venture capital investors in Israel, Alan Feld, from the Vintage Venture Capital Fund.
Feld wrote on LinkedIn that "Einat Gaz is a serious and ethical woman. She is an amazing entrepreneur and an amazing woman. You can agree or disagree with her. But the attack on her, especially from one of her investors, is unjust and inappropriate. You can disagree with an entrepreneur you have invested in, but the place The right place for discussions is on the board and not on the pages of the newspaper. That's not how entrepreneurs behave."
Following Prime Minister Netanyahu's statements that he is determined to pass reforms that will harm democracy and the economy, we made a business decision at Papaya Global to withdraw all of the company's funds from Israel, in the emerging reform, there is no certainty that we can conduct international economic activity from Israel, this is a painful but necessary business step.
— Eynat Guez (@EynatGuez) January 26, 2023
The public debate on LinkedIn is considered relatively unusual among investors and entrepreneurs, who do not usually confront each other in public and do not release messages to the public that go beyond mutual support.
Among the many commenters were well-known figures from the world of venture capital, including Gigi Levy, who supported Peled and wrote that he "completely agrees with Alan. Beyond that, unfortunately, anyone who ignores the potential damage to the economy in general and high-tech in particular is just burying his head in the sand. Really, in my opinion, it has nothing to do with the proposed revolution ( (which I do not support), to think that it and the way in which it is carried out will have no significance on the economy, and especially on the flow of money to the country, is naive. To say that no one abroad is worried - this is already a real distortion of reality."
The high-tech protest, this week, photo: no credit
Frances himself responded to Peled and said that "Einat or you are not the issue here at all. You are not interesting. Neither am I by the way. The issue is statesmanship, impartial conduct and representation of all the individuals we serve regardless of our political views. As for criticizing her - I did not bring This is for me. It is clear that the media will turn to the company's investors for a response when the company's CEO decides unilaterally and resolutely to issue such a PR announcement without preparing us as the company's investors and certainly not on our behalf.
And my response accordingly.
Silence sometimes means consent and I am not ready for anyone to make political capital at the expense of Group 11."
Papaya Global offices.
Will more companies follow suit?, Photo: no credit
The funds came out of Israel - are they essential?
Beyond the investors' quarrels on LinkedIn over the question of where it is recommended to wash the laundry, the public discussion on social networks also dealt with the essence of the business step announced by Gaz.
This is how, for example, Zvi Lev, director of the development center of the Japanese corporation NEC in Israel, analyzed Gaz's announcement about withdrawing the funds from Israel:
"Since and to my understanding the company's development center is in Israel, and most of its employees are here, I assume that they will expect to continue receiving wages. So the taxes will not be affected either. Since the vast majority of the company's business activity is abroad, I estimate that most of the funds are related to payments, receipts, etc. whose origins are abroad remain there, because there is no logical reason to transfer them to Israel - fees, forms from the banks to prevent money laundering."
"The High Court protects us all": the high-tech demonstration in the Sharona complex // Photo: Paz Bar
"Since the company is still a start-up company, there is reason to assume that most of its "money" is investor money. These often remain in accounts abroad, but it is possible that they were all held in Israel."
"Therefore, the most that the CEO, who is anxious about our future, could do is to spend one hundred to two hundred million dollars that were sitting in an account in Israel abroad. The payments will not stop, the taxes to the state will not stop. Is it essential? The answer is, no and no," Lev concludes.
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