Local businessmen told: Invest in Pinoy startups
Filipino businessmen should look at digital startups and innovators as the “next big thing” and invest in them, a government executive said.
“Who or what is going to disrupt our businesses in the next 20 years? The next FB, the next Netflix might be from the Philippines, but our neighbors – Singapore, Malaysia, and Thailand – are stealing our innovators,” Monchito Ibrahim, deputy executive director of the DOST– Information and Communications Technology Office (ICTO), said during the Investing in Tech and Telecom forum organized by the Cebu Business Club last Friday.
“Why can’t we invest in these companies ourselves?” he asked.
He said the lack of funding and attention has led Filipino startups to turn to foreign investors and accelerator companies, like 1337 Ventures, for support.
There are a couple of local mentors and angel investors, such as Ideaspace and Kickstart, but Ibrahim said there’s need for more to get promising startups going.
Angel investors are those who invest in a startup idea to help its initial stages of product development. If the idea takes off, investors can then decide to put in more funding for business expansion.
“To be an angel investor, all you need is around $1000,” said 1337 Ventures founder Bikesh Lakchmichand.
He said they plan to add around 12 startups from the Philippines to its portfolio of 30 startups in Asia.
In the same forum, Lakchmichand also encouraged Cebuano businesses to start investing in startups.
“It is not for the faint-hearted,” he told businessmen from the Cebu Business Club, Mandaue Chamber of Commerce and Industry (MCCI) and the Cebu Chamber of Commerce and Industry (CCCI).
Anyone can be an angel investor so long as they have excess money they can put into investments, want to “pay it forward” by helping other businesses grow and succeed, and want to participate in nation-building.
However, they must be willing to risk losing money in the process of investing.
Based on 1337 Ventures’ case studies on startups, Lakchmichand said only around 2 percent of startups grow to become big companies. Majority of startups die out three to six months after launching, due to inability to scale up.
“But you only need one idea to take off from the hundred you invest in to recover all your expenses,” he added.
The Philippine Roadmap for Digital Startups targets 500 startups with a cumulative valuation of $2 billion and total funding of $200 million by 2020. Last year,
ICTO recorded around 100 Philippine startups, with a total funding of $40 million.
The roadmap also aims to increase highly skilled jobs from to 8,500 from the current 1,700 and startup founders to 1,250 from 250 by 2020.
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