Treasury weighs a tax break for founders, Mashinsky settles in New York, and Israeli cyber raises $2.4 billion

Noa Israel's Treasury is weighing a tax break that could let tech founders sell their shares tax free on gains of up to about 45 million shekels, Bizportal reports. The aim is to stop founders moving to the United States.

Eli And at the same time, the ministry is looking at raising the tax on employees' stock options.

Noa Good morning, it's Sunday, the eleventh of October. I'm Noa.

Eli And I'm Eli. From the end of the week and the weekend: the Treasury's plan for founders' exits, a New York settlement for Celsius founder Alex Mashinsky, a big quarter for Israeli cyber, and Israel's defense industry on show in Morocco.

Noa Bizportal reports that the Finance Ministry is examining an exemption from capital gains tax for founders and investors, on profits that could reach about 45 million shekels, subject to conditions. TheMarker reports the plan too. It is still only being examined.

Eli To see what that is worth: according to Bizportal, a founder who sells shares at a profit of 40 million shekels today usually pays 25 to 30 percent tax, plus the surtax. That comes to 11 to 14 million shekels.

Noa The model is American. It is called QSBS, and it was expanded in July 2025. Holders of qualifying shares in a young US company can be exempt from federal capital gains tax on up to $15 million, or ten times their investment, whichever is higher, usually after five years.

Eli The worry is drift. Bizportal cites an Innovation Authority report: in 2019, 69 percent of employees of private Israeli tech companies worked in Israel. By March 2026, it was 62 percent. Tech is about 18 percent of the economy and 58 percent of exports.

Noa There is a cost. Across a few dozen large exits, Bizportal says, the state could give up hundreds of millions of shekels in tax.

Eli And there is a twist for employees. The Treasury is also looking at stock options granted under Section 102, now usually taxed at 25 percent. One option is raising that to 30 percent, or capping the gain that qualifies. Founders could end up paying less, while employees pay more.

Noa To New York. Alex Mashinsky, the Israeli founder of the collapsed crypto lender Celsius, has settled with New York Attorney General Letitia James. Geektime and crypto dot news report he accepts a lifetime ban from the crypto, securities and commodities industries in New York.

Eli The money is conditional. According to crypto dot news, he owes New York $25 million if he fails to hand another $10 million in gains to the federal government, and a further $10 million if he does not serve his full prison sentence. Up to $35 million in all.

Noa The state's case, filed in 2023, alleged he told customers Celsius was safer than a bank, while their assets funded risky strategies and losses were hidden. More than 26,000 New Yorkers were among the investors.

Eli He is already serving a 12-year federal sentence after pleading guilty to fraud in December 2024, and he is asking a court to vacate it. Prosecutors call his arguments without merit. No statement from Mashinsky on the settlement was reported.

Noa Israeli cybersecurity startups raised at least $2.4 billion in the third quarter, according to CTech's count of disclosed rounds. That is nearly half of global venture investment in the sector.

Eli Globally, cyber funding reached $5.26 billion, the highest quarter since 2022, according to Pinpoint Search Group data published by the Wall Street Journal. CTech counted at least 26 Israeli rounds.

Noa The biggest were Island, $400 million at a $6.4 billion valuation, and Cyera, $400 million from Goldman Sachs, taking it past a $12 billion valuation. Then Glow with $180 million, Zenity with $125 million and Onyx Security with $113 million.

Eli The common thread is AI agents. Of the 26 rounds, CTech says about 20 went to companies securing agents, machine identities or infrastructure for the AI era. Several had not yet launched a product.

Noa Israel's defense industry went to Marrakech. CTech reports Israel opened its first official national pavilion at a defense show in Morocco, the Marrakech Airshow, which ended Saturday, and sent an official Air Force delegation for the first time.

Eli Eight companies took part, among them Elbit, Israel Aerospace Industries and Rafael, and smaller firms such as XTEND and UVision. They showed loitering munitions, AI-powered robotics and navigation for drones.

Noa CTech notes no new contracts were announced at the show. But Calcalist reported last week that Israel Aerospace Industries is in advanced talks to sell Morocco its LORA ballistic missile, which can hit targets about 500 kilometers away. No value was disclosed.

Eli For scale, the Moroccan site Yabiladi, citing Calcalist estimates, says Israeli defense exports to Morocco have passed $2 billion since the start of the decade.

Noa Elbit had a mixed week abroad. CTech reports the US Army has started fielding the first Bradley fighting vehicles with Elbit's Iron Fist active protection system, with a cavalry squadron at Fort Hood, Texas.

Eli Iron Fist detects incoming missiles, rockets and drones and destroys them before they hit. Elbit got a $37 million order in 2024 and a $228 million contract in January for the Bradley upgrade, which General Dynamics leads. The Army has not said how many vehicles will get it.

Noa In France, CTech reports cargo workers at Charles de Gaulle airport refused on Saturday to load a shipment of gearboxes that three French groups say was bound for Elbit's land systems division. The groups have asked a Paris court to block it. Elbit declined to comment.

Noa Now the quick round-up.

Eli Globes profiles Limy, co-founded by Aviv Shmani, a former officer in the Maglan unit. It helps brands show up in the answers of AI assistants, has more than 200 large clients, and has raised $10 million from Andreessen Horowitz.

Noa TheMarker reports that US chip startup Positron, recently valued at $5 billion, is setting up a development operation in Israel and has already hired a local engineering director.

Eli Geektime looks at Fisherman, a free Israeli app that filters spam and phishing texts. Its developer, Matan Gidnian, says that in one week it spotted political messages for a single campaign coming from more than 600 different numbers.

Noa And Geektime reports that Swaptix, a new Israeli startup with no outside investors so far, lets people trade unwanted concert tickets for credit to spend on other events.

Noa What to watch: the details of the Treasury's plan. Bizportal says the ministry still has to decide who qualifies, how long shares must be held, which companies count, and whether existing shares are covered. Those answers, and the decision on employee options, will show who gains and who pays.

Eli Follow Israel Tech Daily wherever you get your podcasts, and read more at startuptofollow.com.

Noa See you tomorrow morning.