While it’s often said that perception is greater than reality, public relations is a tool that can demonstrably affect both.

Case in point: In the third quarter of 2006, venture capitalists poured $381 million into Israeli start-ups, according to the Israel Venture Capital Research Center, an independent analyst firm that monitors the country’s high-tech industry sector.

The IVC also noted that while the quarterly amount was down 6 percent from the $404 million raised in the previous quarter, it was 13 percent above the $336 million raised in the third quarter of 2005.

“The small decrease in investment in Q3 indicated that the war, which took place during the third quarter, had only a very minor impact on venture capital investments,” said Zeev Holtzman, Chairman of both IVC Research Center and Giza Venture Capital. “It signifies that investors continue to see stability and credibility in Israeli high-tech, a fact which is also reflected in the slight increase in the share of foreign investment during the Q3 period.”

It’s worth considering that for much of Q3, news about Israel was dominated by coverage of the military conflict with the Lebanese-based terrorist group Hezbollah, so the success of its high-tech sector is all the more remarkable.

The attraction of venture capitalists to Israel is a reality. It’s likely that most people don’t perceive Israel as a VC powerhouse. But perception can be altered, or at least expanded – if enough people become aware of the reality. And that’s the business of PR. With more high-tech companies than any place outside California, Israel offers a perfect opportunity for greater PR activity.