Israel/U.S. Partnerships Headed For Record Year

Small technology companies in Israel are signing on with bigger U.S. partners, gaining cash, and overcoming their sales and marketing weaknesses.

"Working in large American operations creates more added value," asserts Avi Israeli, managing director of Tamir Fishman & Co., the Israeli partner of U.S. investment bank Hambrecht & Quist LLC.

Israel's cross-border activity has exceeded $1.5 billion so far this year, compared with $1.7 billion for all of 1997.

"But there's a downside," says Yanki Margalit, CEO of Aladdin Knowledge Systems Ltd., an Israeli anti-piracy equipment maker. "Israeli companies look for an exit strategy from day one. Few think about the long term and building an infrastructure."