These two slides should scare the $%^&* out of the Israeli Government, Chief Scientist, Entreprenuers, VCs and Economists.
Israel must invest in innovation in order to come out strong on the other side of this financial crisis. Israel is well positioned to do that but without continued investment in research, innovation and tech infrastructure, it will not happen. If early stage funding dries up, there will not be late stage opportunities in the future. It could be that this is merely a rightsizing of the Israeli VC industry (which is probably needed) but to me that first graph looks like a cliff, not a diet.
Slides courtesy of Dow Jones and sent to me by EY
Source: Israel's Innovation Drought