Fund Structure, Leadership and Design Principles

Present Structure

The ZEP Fund is presently incorporated as an Israeli limited liability company with Reichman University as its sole shareholder. It is managed by a nominal CEO and board of directors that consists of two RUNI executives (RUNI CEO and CFO) and two Zell program representatives (the academic director and chairperson of the program). Investment decisions are made by the Investment Committee (IC) which is comprised of the academic director, the executive director, the chairperson of the program, a rotating alumni representative and the CFO of Reichman University.

Proposed Structure

The shares in ZEP Fund Ltd. would be transferred to either of, the Zell Entrepreneurship Foundation, the donor advised fund where the monies of the Zell Program endowment will be managed or a trusteeship created for the purpose (i.e Dr. Ayal Shenhav, Gross law firm). The limited liability company will continue to manage the investment activities, as its GP, and but would be open to raising a fund or series of funds with additional investors as limited partners. The carried interest (20-30%) from these investment returns would be allocated such that 10% would be allocated to RUNI scholarships and the remainder to program activities designated by the GP.

Fund Leadership

The ZEP Fund would continue to be managed by a CEO and board of directors. The new board of directors could include a Zell Entrepreneurship Foundation appointee, the chairperson of the program, the executive director of the program, and a representative of RUNI. The investment committee would consist of the executive director of the program, the chairperson, academic director, and two alumni professional investors in rotating positions. An advisory committee of syndicate investors would be chosen on a rotating basis to help evaluate deals.

Fund Design Principles

Deal flow opportunities arise where at least one founder is a Zell alumnus, holding no less than 10% and company is fundraising.

The total investible amount for each two year period (i.e Jan 2025-Dec 2026) is US$500,000 invested on a rolling basis (the Investment Period);

During each Investment Period, the investment amount available per company is US$50,000-US$250,000, as determined by the Investment Committee (IC), as long as the total for the Investment Period does not exceed the investible amount for that period.

Follow on investments in ZEP Fund portfolio companies is possible for no more than the the pro rata amount, subject to IC approval and only if at least the lead investor or 50% of the VCs from the previous rounds participate.

The IC will convene in meetings via video conferencing or in person, as called by the General Manager. The IC will review materials, hear pitches and decide on investments and investment amounts by majority vote.

The General Manager will keep updated on portfolio company performance and gather information for the financial statements each year.

The board of directors meets once a year to go over financials and approve them, discuss fund outcomes and fund strategy.

Scholarships to Reichman University will be granted once a year at the end of the calendar year. The amount to be paid to the University to an earmarked account will be 10% of all revenue from the dividends, asset or share sale, merger or IPO of any portfolio company, less the initial investment amount. The University will acknowledge that the monies have been transferred to the appropriate scholarship fund.

Any surplus, above the Investment Period investment amount (US$500,000 over two years) plus US$250,000 and after payment of scholarships and service providers (i.e. lawyers, accountants and bookkeepers for annual filing work), will be available to be spent on deal flow activities in the program and portfolio network activities including, events, workshops, marketing etc. as deemed reasonable by the IC.

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