Editor’s Note: The company examples in this post reflect what each team shared with Genesis members at the time of the session, and both are still developing.
When a startup shuts down, the post-mortem usually says the same thing: it ran out of money. CB Insights analyzed 431 venture-backed companies that shut down since 2023, and among those where the cause could be identified, 70 percent ran out of capital. Its analysts describe that as the final cause rather than the root problem. Forty-three percent had never found enough customers who wanted the product, 29 percent launched at the wrong time, and 19 percent could not make the economics of each sale work, with many companies citing more than one reason. Together, the 431 companies had raised $17.5 billion before they closed.
That pattern changes what an investor is worth to a company. If a shortage of money is usually the symptom, an investor who supplies only money is treating the symptom. What a struggling company more often needs is an investor who has seen the market before and can say whether it is real, who can introduce it to customers and partners, and whose involvement gives other people a reason to take it seriously. CB Insights also found that among the 206 companies with tracked business relationships, partnership activity dropped 44 percent in the final year compared with the year before, which is consistent with a company whose network is thinning out as it struggles.
Academic research points the same way. Researchers at Stanford, MIT, and Dartmouth studied what happened when new airline routes made it easier for venture investors to visit the startups they had backed. Startups whose investors could visit more easily produced more innovation and were more likely to reach a successful exit, such as a public listing or a sale of the company. Because the new routes were unrelated to the quality of the startups, the researchers could separate the effect of involvement from the effect of simply picking strong companies. A separate study in the same journal found that companies backed by better-networked venture firms, meaning firms with stronger relationships with other investors, were significantly more likely to survive to their next round of funding and to reach an exit. Both studies looked at venture capital firms, and both describe what an investor’s time and relationships can do for a young company.
That is the model Genesis is built around. Genesis describes its work as identifying promising companies in Israel and other countries and leading them into new markets, bringing human or financial capital and helping them scale profitably in the United States and beyond. Its members are described as industry leaders and entrepreneurs, which means the experience on offer comes from people who have built and run companies themselves. Two recent examples show how that looks in practice.
Boson Energy turns non-recyclable waste into hydrogen, and the company is evaluating locations in the United States. Genesis introduced the team to an advisor based in New Jersey who can help explore landfill and utility authority sites, and the next steps are identifying specific sites and setting up a U.S. entity. Biomicroscience, a medical device company developing technology for cardiovascular and neurosurgical procedures, is moving into first-in-human trials in Israel and at three U.S. hospitals, and Genesis is working to connect the team with strategic partners in cardiology and neurosurgery. Neither introduction is just a check. Each is a door the company would otherwise have to find on its own.
The same pattern shows up in the room. In a recent session with a pharmaceutical compounding company, members raised questions about how the FDA’s evolving stance on peptide categories could change the size of the company’s market and about the practical side of delivering peptides in auto-injector pens. Those are questions a company is better off hearing early, from people who know the terrain. Members who want to go further can join due diligence sessions hosted by co-founders Amiel Aviman and Ranny Yarom, where a company is examined in more detail.
For founders comparing offers, the more useful questions tend to come after the valuation discussion: what the investor has done for other companies, whom they are willing to introduce, and whether they know the market well enough to say when an idea is not working. The amount on the check shows how long a company can keep going. The investor’s experience and relationships help decide whether it is going in the right direction.
Genesis is an invitation-only investment and social club with chapters in Miami and New York/New Jersey. For Israeli startups interested in the U.S. market, contact info@genesisbh.net.