By Elizabeth Cloutman

As it has often happened in Silicon Valley, the idea for Silicom Ventures hatched in a private home. Two years ago, while meeting in the den of his Los Altos home, Gadi Behar and other members of his stock-investors’ group - many of whose members are high-tech executives - decided to become venture capitalists.

Silicom Ventures focuses on businesses that provide products and services for the Internet and the growing field of interactive digital media. The investment group prefers to invest in the early stages of a company’s development from seed capital to second-round financing. Behar is the managing director.

“We help them with (financing), presentations to investors and, if they need some ideas, we give them ideas as well until … someone acquires them or they go public,” Behar said.

In the past two years, Silicom Ventures has financed the launching of eight such companies. One, WebAppoint, an online scheduling company, was just acquired by Microsoft.

When an entrepreneur comes to them seeking financing for a business idea, Behar said his panel of advisors discusses the idea. His 11 advisors have all served as founders or executives of established companies in various high-tech fields.

If an idea is deemed worthwhile, Behar seeks out other individual investors. The hopeful entrepreneur then presents his or her idea to the investors, who then decide whether to lend their financial support.

These investors are known as angels - individual investors that invest in promising businesses. However, individual investors must have substantial net worth or earnings in order to protect the interests of the fledgling companies.

To satisfy Securities and Exchange Commission regulations, Behar said the individual investor must have a net worth of at least $1 million or an annual income of more than $200,000 for each of the past two years, or have a combined income with a spouse of more than $300,000 for each of the past two years. He also must have a reasonable expectation of reaching the same level in the current year.

Behar came to the United States from Israel 25 years ago and has lived in Los Altos for 20 years. His wife, Tal, who is the executive director for Silicom Ventures, came to the United States 10 years ago after marrying Gadi.

Gadi ran Los Altos Electric, a successful electrical business, for 10 years. He first became interested in investing in Silicon Valley’s booming real estate market.

Silicom Ventures frequently invests in Israeli start-ups, Gadi said.

“There are a lot of start-ups in Israel, 4,000-5,000. We take advantage of the connection overseas to get them exposure in the United States,” he said.

Tal added, “They want to target the big market here because Israel is a small market. They have great ideas and they need to implement them in a big market, so we assist them.”

Gadi said that although Silicom Ventures doesn’t advertise, there are 50-70 investors at each monthly meeting.

Silicom Ventures has established its eight companies successfully through its careful screening process, but he advises, “This is a very risky business. Either you lose the money or win it big. You have to be prepared that the money you put in may be gone.”

For more information, logon to: www.silicomventures.com.