Introduction

Kolnoa-VC was established by an experienced international management team to harness growth opportunities it has identified in the Israeli film industry.

Kolnoa will provide later-stage capital to a diversified portfolio of films, to be exploited over the next five years for both Israel and worldwide audiences.

Kolnoa’s activities will lead the development of the Israeli film industry toward new markets and increased levels of profitability

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Investment Opportunity

An Emerging Israeli Film Industry

Activity in the Israeli film industry has increased significantly over the last five years. In 2004 23 feature films were made, many of which achieved box office success in Israel, creative success in international film festivals and commercial success in international markets. From almost nothing in 2001, Israeli films in 2004 took 12.5% of the local box office share, often performing better than US Hollywood blockbusters. The emergence of a strong, creative and professional local film industry presents an opportunity for Israel to become an international production center and to produce English-language films for the global market in co-production with other countries. Supporting factors for this proposition include:

• Creativity : Israel's creativity, which has been at the core of the country's success in many other industries, offers tremendous potential in the film business.
• Highly-educated workforce : Relative to its small size, Israel has a large number of film schools. It is also the only country worldwide to operate an official Curriculum of film studies in elementary and middle schools. (for more information see Israeli Film Industry)
• Locations : The country offers a variety of unique locations and landscapes within a very concentrated area, leading to reduced shooting times and costs.
• Facilities : High-quality facilities and equipment are available for international co-producers at rates competitive with those in Europe and in many Eastern European countries. (for more info r mation see Israeli Film Industry)
• Budgetary discipline : Despite severe budgetary constraints, the quality of films made in Israel surpasses that of many significantly higher budgeted films made elsewhere.
• Existing but underutilized co-production structures : Israel has co-production treaties with Canada, France, Germany, Italy, Eastern European countries and Australia, with other treaties in negotiation. This enables the utilization of governmental benefits from participating countries for co-production financing, covering up to 30-35% of the cost of making a film. In most cases, such benefits are non-recoupable, thereby accelerating returns for investors

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Investment Focus

The following table summarizes the Fund’s key objectives, the types of films the Fund intends to invest in and what it will contribute to each project:

Fund Investments and Activities