JERUSALEM -- If Gil Shwed, founder and CEO of Check Point Software Technologies (CHKP) - Get Report, represents the Israeli military-intelligence-hacker-turned-entrepreneur, then Nir Barkat is this small but influential country's consummate venture capitalist: A cocky, debonair and worldly financier who exudes his nation's success.
The Shwed-Barkat connection is important: Barkat's
venture firm staked Check Point its initial $300,000 in cash in 1993; the firewall software company is worth $3 billion today. But the two couldn't be less alike. As profiled here
Monday, Shwed is a geeky bundle of energy, focused to the exclusion of all else. Barkat, on the other hand, is a calm, cool and collected former paratrooper commander who's paying attention not only to his firm's portfolio companies, but also to Israel and its place in the global high-tech community.
I had lunch in the center of Jerusalem with Barkat a day after landing in Israel, where I'm checking out a high-tech market that, at the moment, is arguably second only to Silicon Valley in the "mindshare" for technology. Every tech company and VC firm that matters these days is doing business either in Israel, or with Israelis. Barkat, as one of the longest-serving venture capitalists in a land that didn't really have VCs a decade ago, is at the epicenter of the activity.
And yet, given his role as an Israeli leader, the 40-year-old former computer programmer is a major proponent of a surprisingly philosophical school of thought: All his entrepreneurs must plan either to move to the United States or hire a CEO there -- or they can forget about being funded by BRM.
"Other than Gil," he says, referring to Shwed, over whom Barkat arguably has little influence anymore, "it's mandatory that our CEOs are in the U.S.," says Barkat. Blessed with movie-star good looks, Barkat arrives for lunch in his off-road racing jeep dressed in shorts, sandals, a striped t-shirt and a wrist watch that looks like it weighs more than my laptop computer.
Barkat practices most of what he preaches. His firm maintains an office in Fort Lee, N.J., where former
investment banker Charles Federman scouts U.S. investments. Also, Barkat's brother Eli lives in California, where he is CEO of Internet software maker
, which went public this summer, raising $60 million. Says Barkat, who flew off the next day to this week's
meeting of tech-industry bigwigs in Arizona: "Without a strong U.S. presence, we're kidding ourselves if we think we can really be helping our companies."
Barkat's conviction rubs off even on entrepreneurs he doesn't fund.
"Nir Barkat is always asking me when I'm moving to the United States," says Daniel Schreiber, the British-born CEO of
, a start-up making Web security software in Beit Shemesh, between Jerusalem and Tel Aviv. Schreiber says that in order to cut down on the amount of time he spends on airplanes, he just may move to the U.S. sooner rather than later.
Barkat's Israel-U.S. dichotomy is a recurring story among Israel's high-tech concerns -- from tiny start-ups to established public companies. The norm is for research-and-development operations to remain in Israel, close to the source of highly trained engineers who've recently finished either their university education or military service. Meanwhile, VCs like Barkat advise the companies in which they invest to immediately set up sales, marketing and business-development offices in the United States, close to their customers.
To drive home the point, Barkat uses a military metaphor he didn't invent, but delivers forcefully. In the Israeli artillery, he says, a commander doesn't stay in the rear with his troops and guns but rather positions himself at the front, where he can spot the locations the bombs should be falling. Ditto for leaders of Israel's high-tech companies, who should be as close as possible to the customers their products target.
BRM first got its start as a software company, writing anti-virus programs. It eventually sold its
Fifth Generation Systems
. But Barkat and his partners were able to apply their lessons learned from selling in the U.S. when Check Point's Shwed needed help jump-starting his company. "At the time, we were higher on the learning curve in terms of how to do business in the U.S.," says Barkat.
BRM struck it rich with Check Point, but not as much as it might have. It sold a portion of its equity to venture capitalists from
U.S. Venture Partners
before Check Point's 1996 initial public offering. It still was left with a small fortune, however, enough to stake BRM's first venture fund with $40 million in 1998. Unlike the typical U.S. venture firm, BRM hasn't accepted funds from outside investors, so it's freer to spend heavily on an in-house staff of investment professionals.
Barkat is flashy and a name-dropper -- he hobnobbed recently in Monaco with Terry and Katrina Garnett, with whom he's done several deals, including a BRM investment in
, which Katrina founded. Terry is a partner at venture capital firm Venrock Associates.
Barkat is also contributing time and money to improving the study of computers and entrepreneurship in Jerusalem and the rest of Israel. He understands that Israel needs to nurture its own, but also to look outside Israel for success. The country is particularly good, he says, at solving problems posed by others.
Says Barkat: "Once there's a paradigm shift, Israelis are very quick to adapt to it."
Adam Lashinsky's column appears Mondays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky writes a column for Fortune called the Wired Investor, and is a frequent commentator on public radio's Marketplace program. He welcomes your feedback at