Medical Devices

Building the Israel-Ohio medical connection: Bridge Investment Fund

Michael Goldberg

Bridge Investment Fund recently scored its biggest win — in the eyes of job-creation-conscious local investors, at least — when Israel-based portfolio company IceCure decided to establish its U.S. headquarters in Cleveland.

That’s exactly what the Cleveland-based venture capital fund was designed to do when it was set up in 2005: Invest in Israeli medical device firms that would benefit from setting up operations in the Cleveland area as they look to break into the U.S. market, and boost job growth and economic activity in Northeast Ohio’s growing biomedical sector.

Of course, there’s no guarantee all of Bridge’s portfolio companies will set up shop in Northeast Ohio. Cold, rational business decisions will rule the day, as illustrated by Bridge-affiliated device maker EarlySense, which last month chose Massachusetts as its U.S. base.


Two other portfolio companies — Navotek and Medic Vision — haven’t made decisions on their U.S. expansion plans.

The $10 million fund is co-managed by Michael Goldberg, who handles U.S. operations out of Cleveland and Tel Aviv-based Avshalom Horan. Bridge’s investors include the Ohio Capital Fund, a state-backed fund of funds.

Prior to Bridge, Goldberg was director of international business development for America Online. He holds a master’s degree in international relations from Johns Hopkins University and an MBA from the University of Pennsylvania’s Wharton School. He also teaches entrepreneurial finance to MBA students at Case Western Reserve University.

Goldberg spoke with MedCity News about how Bridge got started, the promise the Chinese market could hold for Northeast Ohio biomedical companies and why healthcare valuations won’t reach LinkedIn territory any time soon.

Q: How did you arrive at the goal of helping to bring Israeli companies to Northeast Ohio?

A: Bridge was founded at the end of 2005 out of general enthusiasm for and appreciation of Israeli technology in the health space. Earlier in the decade, Early Stage Partners led a Cleveland-based syndicate that invested in Simbionix, an Israeli medical simulation company, which raised awareness locally around Israeli medical innovation.  This investment fostered local interest in putting together a dedicated source of capital to look exclusively at Israeli medical opportunities that had strong synergies with Cleveland’s medical institutions. Individual investors felt it was challenging to evaluate these opportunities on their own, and were interested in putting their capital behind our team at Bridge that would professionalize the due diligence and portfolio management associated with these Israeli healthcare investment opportunities.

Q: With all the success that Northeast Ohio has had in luring Israeli companies to base their U.S. operations here, do you see any other parts of the world where the region could establish similar partnerships?

A: As I look at our Israeli healthcare portfolio, I have found that our Israeli entrepreneurs started thinking about the U.S. market from the moment they’re whiteboarding their strategic plan. Over the last several years, healthcare entrepreneurs in Israel and in the U.S. are finding room on their whiteboards to contemplate strategies to address growing markets in Asia. China, in particular, is an exciting market hungry for healthcare innovation to serve a growing consumer base.

In my previous role with AOL before we started Bridge, I had the opportunity to spend several years working on a joint venture with Lenovo to enter the China market. I remain in contact with friends and investors in China and am currently exploring opportunities for my current portfolio companies to expand there. I believe that Cleveland-based healthcare companies need to figure out if they have products and technologies that make sense for the Chinese market, and, if so, they should move aggressively to engage with partners in China to determine if expansion makes sense for them.

Q: Do you think that IceCure choosing Cleveland for its U.S. headquarters is a validation of Bridge’s model?

A: As investors focused first and foremost on financial returns, we — alongside IceCure’s management team — saw the value to the company in having their headquarters in Cleveland. There’s strong regional enthusiasm for cryoablation as an alternative treatment for breast tumors and the reimbursement environment in Ohio and neighboring states for these procedures is quite good. Our Ohio investor base, including the Ohio Capital Fund, also is interested in seeing Bridge’s portfolio create jobs and economic activity in the region, when appropriate. It’s always great to have a portfolio company sitting down the street because it allows hands-on investors like us to work closely with the company to help them achieve their strategic goals.

But not all of our companies coming from Israel have chosen to set up their U.S. headquarters in Cleveland. EarlySense decided to go to Boston. Still, we’ll continue to work with all of our portfolio companies to show them the opportunities in Cleveland and the region that could help them grow successfully.

Q: Given the excitement surrounding investing in social media companies such as LinkedIn, do you see any hope of such stratospheric valuations coming to the healthcare sector anytime soon?

A: I teach an MBA entrepreneurial finance course at Case Western Reserve University and my students are fixated on the high valuations associated with social media companies. When I bring healthcare entrepreneurs to class, the students are often surprised by how different of an environment it is to raise capital in healthcare, compared with the social media entrepreneurs they read about. Healthcare valuations remain relatively low, and that provides excellent opportunities right now for healthcare investors. Over time I do see valuations climbing, but until we start to see the healthcare M&A and IPO markets pick up steam, we have a long way to go to catch our friends in social media.

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