Technological innovation has become humanity’s great leap forward. Today, companies around the world are devising and developing the next generation of both hardware and software solutions. From engineering to sales, the start-up playground is rumbling with excitement, deadlines, and an off-the-cuff attitude, or as Guy Navon Ph.D., Head of Discount Tech, says about the entrepreneurs of today, “they live in the now, and don’t necessarily plan ahead.”
Guy is a veteran economist, who for the last 9 years has risen through the ranks at Israel Discount Bank. Now, he is leading their ride into the future, as the Head of Discount Tech – a dedicated banking service for high-tech companies. Discount Tech is part of the corporate banking division headed by Yuval Gavish, Deputy CEO.
Discount Bank has identified that banking needs change throughout the life of a start-up. Rather than tech-focused entrepreneurs getting lost in banking practices and bureaucracy, why not have a bank suited to the start-up’s own growth, at their own pace. “This means each company gets its own portfolio manager who will act as a one-stop-shop for our clients, helping to manage day-to-day finances and reducing background noise, as much as possible,” says Guy Navon.
According to Guy, Discount Tech’s reach is not limited to just banking services, it helps connect the entire innovation ecosystem. “We provide services to the VCs and angels, as well as the entrepreneurs, companies, and their employees. We accompany the start-up throughout their journey from early-stage Seed rounds to scaling around the globe.” He sees this also as a huge catalyst in helping Israel’s transformation. “Israel is evolving from Startup Nation to Scale-Up Nation, and I expect we will see more and more unicorns, decatrons and even megatrons over the next decade. This is something nobody would have dreamt about ten years ago.”
Guy especially notes the collaboration with major venture capital firms across the ecosystem, and how they require “certainty” while trying to rally entrepreneurs and their start-up’s to scale globally and become market leaders. “VCs are helping start-ups and founders navigate through every stage of growth, who, in turn, become heavily reliant on the VC fund ecosystem. This ecosystem rallies them to raise equity rounds every 2 or 3 years, diluting the founders’ equity.” While equity dilution may seem to be the best route for realizing an entrepreneur’s ambitious ideas, and sometimes it really is, the picture is a bit complex.
“We see Startup’s in the early growth stage with returning customers, low churn rate, good unit economics measures and yet they are still significantly tied to VC equity… they don’t understand how to balance between debt financing and equity funding. This is where our portfolio managers enter to guide and mentor these companies.”
Guy highlights the “stamp of approval” that start-ups, who adopt a forward-looking banking mindset, enjoy - especially on the venture capital front. “When start-ups work with the bank, their data is much more reliable, and it can help lead to VC backed funding rounds. This planning supports certainty, a recurring motif for Guy’s vision of the Discount Tech. He further emphasizes that Discount Tech “understands that when start-ups look for certainty, they are looking for certainty also during the bad times. We work alongside the major VCs, the founders, the company, to ensure their capital and support their journey.”
Discount Tech is an active partner in the Israeli high-tech ecosystem. Guy views it as crucial for the bank to be involved with start-ups from their founding stage and onwards. Guy highlights Discount Group’s strength beginning with Discount Tech in Israel, strengthened by Discount Capital's ability to lead start-ups through funding rounds and corporate development, and rounded out by our US Bank's IDB Tech offering that can assist in setting up banking services in NY, Florida, and California. In addition, Guy and Discount Tech play partner and mentor to many early-stage start-ups participating in the 365x and Sigma Labs accelerator programs - as part of the Sarona Partners ecosystem. “We mentor the entrepreneurs on the funding process, how to prepare the company to raise money, and how to prepare for the long term.”