Jerusalem, Israel David Rosenberg – Israel’s venture capital funds – the principal source of finance for Israel’s vaunted high technology industry – are running out of money, but industry executives say the dry patch should end soon while new classes of investors should ensure the country’s start-ups get the cash they need to develop software, biotechnology and green technology.

The country’s venture capital (VC) funds saw the capital they have available to invest in the future fall to just $1.4 billion at the end of 2010, according to a survey published Tuesday by the IVC Research Center and accounting firm KPMG Somekh Chaikin Israel. With the VCs investing an average of $520 million annually over the past three years, their stock of capital could run out in less than three years without new capital.

But VCs raised no new money in 2010, the IVC Research Center said. It was the first year of nil new investment since 2003 when the industry was pounded by the bursting high tech bubble and the Palestinian intifada. The year 2009, when VCs raised $239 million, wasn’t much better. In 2005-2008, they raised an average of just over $1 billion a year.

“There’s no doubt at all that it is difficult to raise money for VC. VC as an asset class is not held in the same high regard it once was,” Ed Mlavsky, chairman emeritus of Gemini Israel funds and a founding partner, told The Media Line. “I think it’s coming back, but there were the years of the big bubble and blowouts.”

Venture capital is a critical component of the Israeli economy, where high technology created by start-ups the funds invest in have been responsible for booming exports and high-paid jobs and attracting foreign investment. But VC funds need to raise capital themselves from investors like pension funds to invest in start-ups and that has been a struggle amid the global financial crisis.

Venture capital has had to compete for investors with hedge funds, which in recent years offered higher returns and allowed investors to take out their money out more easily than VCs, where funds are locked up for years. Things got worse for VC when the global financial crisis laid low the investment community, including the U.S. investors Israeli VCs depend on as backers.

For investors, the financial crisis is long over, but the Israeli VC industry, like its U.S. peer, has been slower to recover. The IVC expects some improvement in fundraising by the funds, forecasting Israeli VCs attracting some $800 million in new capital during the year. The new cash is critical, said Koby Simana, chief executive officer of IVC Research, which monitors the industry.

“Without improvement, it threatens the survival of numerous Israeli high tech companies that cannot raise needed capital,” Simana said. “VC funds will not be able to finance new companies or, in some cases, support their existing portfolio companies.”

One reason for his cautious optimism is new legislation approved by the Israeli government introduced to encourage domestic investors to invest in venture capital. Until now, local investors generally didn’t back their own country’s VC funds, but IVC estimates they will invest some $220 million over the next two years, although most of that will occur in 2012.

In addition, the government is sponsoring in a public-private fund specializing in biotechnology that will be raising capital this year, UVC said.

Finally, venture capital is starting to come back into fashion among U.S. investors, who have soured on hedge funds, said Mlavsky of Gemini, which manages more than $700 million. In any case, Israeli technology start-ups have other sources of capital, including foreign VCs that invest in Israel, technology incubators that provide seed funding and facilities for fledgling companies and private investors, known as angels.

Israel’s incubators have been privatized in recent years, which has led to an improvement in management, he said. The angel community has grown more sophisticated as it comes to encompass people who made their fortunes in high tech and understand the business. The cost of starting up a new company, especially in the Internet, has fallen, he added.

Foreign VCs are already a major presence in Israel. Last year they provided 70 percent of the $1.26 billion raised by Israeli tech companies in 2010, the biggest proportion in at least a decade, according to IVC data. Bessemer Venture Partners, a U.S. firm with $2 billion in VC under management, is reportedly raising up to $1.5 billion for a new fund that will invest in Israel and India, as well as in the U.S.

Even with the flow of investment threatened by VCs’ financing woes, Israel’s high tech sector is still thriving. Exports in fields such as computers and communications equipment posted double-digit growth last year and foreign companies are acquiring start-ups for their technology, a seal of approval for Israeli technological prowess.

Mlavsky said he sees no let-up in the number of new companies being formed or the quality of the technology they are developing. As the industry matures, more companies are being headed by entrepreneurs with the experience of leading a young and growing company.

“In many ways deal flow much better than it used to be,” Mlavsky said. “There are a lot of repeat entrepreneurs.”

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Regardless of what you might have been made to feel, day trading can be a very easy, but nevertheless lucrative, way to make cash – even from the comfort of your house, supplied you have a personal computer with world wide web access of course.

How to Make a Living with Day Trading

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The way to earn money in day trading is to purchase low, and sell high. Obviously, the question is – how do a trader know when to buy stock and sell?

Here you will find some essential advice for you to earn cash with day trading.

Read the market news and stay informed about the stock market. You’ll need to stay on top of developments in the markets, like mergers, takeovers, and earnings announcements for leading businesses. It’s important to have a strong overview of the news in the markets.

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