Investors Should Back Entrepreneurs Who Are Willing to Learn, Says Venture Capitalist

It is impossible to tell which companies are going to be successful but what investors should be looking for are entrepreneurs that are willing to learn and develop, Michael Eisenberg, a managing partner at Tel Aviv-based firm Aleph Venture Capital said.

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Eisenberg spoke Tuesday with Calcalist reporter Sophie Schulman in CTech by Calcalist's investor conference It Tech Two To Tango, held at the events space of Labs, a coworking space located on the top floors of the Azrieli Sarona Tower in Tel Aviv.

"What we are looking for are entrepreneurs that are learn-it-all, but unfortunately most people are know-it-alls," Eisenberg said.

Eisenberg also referred to online insurance company Lemonade Inc., one of Aleph's portfolio companies. Earlier this month, citing two people familiar with the matter who spoke on condition of anonymity, Calcalist reported that Lemonade is planning an initial public offering in New York within the next six months at a company valuation of $2 billion.

According to Eisenberg, Lemonade set out to change the insurance industry's business model. Traditional insurance companies make money by investing the funds paid by customers and by rejecting claims, Eisenberg said. Lemonade's model is based on a flat fee of 25%. With excess funds going to charity, it has no incentive to reject justified claims, he said.

According to Eisenberg, the only way for companies to grow is by doubling down and making big bets early on. Companies need to scale up in advance and invest in recruiting talent as soon as possible, to support expansion, he said.