Q&A with Virginia Secretary of Commerce & Trade, Michael Schewel
The Virginia-Israel Alliance newsletter recently conducted an exclusive interview with Virginia Secretary of Commerce and Trade Michael Schewel to get his thoughts on the opportunity he sees to build stronger ties between Virginia and Israel. As one of the primary architects of the VITAL program, Secretary Schewel is excited about the tremendous possibilities this program can bring to the Commonwealth of Virginia today and in the future.
Prior to being appointed Virginia’s Secretary of Commerce and Trade on January 14, 2002, Michael Schewel worked at the law firm of McGuire, Woods, Battle & Boothe for 22 years where he was most recently head of the law firm’s corporate law department, which included approximately 145 lawyers in 9 offices around the country. Secretary Schewel also formerly served on the Virginia Fair Housing Study Commission and was a Commissioner of the Virginia Housing Development Authority for 8 years.
Why are you interested in helping to foster business opportunities between Israel and Virginia?
Because it is good for Virginia's economy. One of my responsibilities is to find ways to enhance the economy of Virginia and VITAL is one way of accomplishing this. Israeli companies and entrepreneurs are known for their innovation and creativity, as well as their scientific and technical ideas. Combining these Israeli strengths with some of the assets already in Virginia, presents an incredible business opportunity, while helping to facilitate research and create jobs. Virginia Governor Mark Warner, a former successful entrepreneur himself, is also dedicated to fostering an environment where new ideas can be hatched, cultivated and brought to market.
The VITAL program brings together all the right elements for success: the attractive network and talent pool in Israel, one of the nation’s leading educational institutions with Virginia Tech, a state that is committed to bringing in new technologies and innovation, and a rich venture capital (VC) community. Virginia is already known for its vibrant technology community, which is on par with the nation’s leading technology hubs of San Francisco, Boston and Austin. The VITAL program will certainly continue to build on Virginia’s strong technology foundation.
Beyond technology, are there other sectors where you see opportunities for Israeli companies?
I see technology touching many different sectors in Virginia, ranging from pharmaceutical and information technology to security technology and agricultural technology, all of which are areas where Israel has traditionally excelled. We hope that the Israeli companies that come through the VITAL program will apply technology to a number of industries and market sectors.
What’s the outlook for VC funding today?
Certainly, the state of venture capital is not the same as it was a few years ago, where the money was flowing more freely and into companies that didn’t always have viability or the right business fundamentals in place. Venture capital is inherently risky. The dynamics have changed and more companies are chasing fewer dollars, making the competition for funding fiercer. It doesn’t mean that VCs aren’t making investments in attractive deals, but they are being much more selective in the companies they choose to invest their money. However, one of the big advantages to Israeli companies chosen to participate in VITAL is that their access to venture capital will be greatly enhanced and they will gain maximum exposure to an influential audience of venture capitalists.
The Israeli companies who are selected to participate in the VITAL program are early stage companies, which tend to be at a more risky stage in their company development. Inevitably, some companies in the VITAL program will not make it, but we believe many of them will succeed and prosper, which in itself will make the VITAL program a success.
What does VITAL bring to the Virginia economy? What problems does the VITAL program help solve?
VITAL is dedicated to bringing Israeli companies to Virginia that will commercialize Israeli technology in the U.S. While Israeli companies have tremendous technological expertise and a terrific entrepreneurial spirit, they are faced with a small internal market, especially given the recent state of diplomatic crisis in The Middle East. The Israeli-Palestinian conflict can undermine the attractiveness to foreign investors of investments in domestic Israeli companies right now. We see the VITAL program as an opportunity to create jobs and research in Virginia by giving Israeli companies better access to VC funding and a wider market that could greatly enhance their chances for success.
Not only does VITAL help Israeli companies, it also helps Virginia attract companies to this region that are innovative and have a strong potential for growth. Virginia can also offer Israeli companies access to its leading academic research facilities. If we can provide a comfortable home for Israeli companies that helps them solve their internal problems, it becomes a win-win situation for both Israel and Virginia.
The VITAL program has the potential to become the breeding ground for a whole new crop of Israeli companies who may eventually be able to join the ranks of some of the more established Israeli companies already based here in Virginia – from Zim-American Israeli Shipping Company and Amdocs to ECI Telecom, Gilat Satellite Networks, Globecom, Foxcom, Main.net and You-niversity just to name a few.
