We think it’s safe to say that funding woes are a common theme in the Philippines startup community, judging from the turnout at Impact Hub Manila’s Reverse Forum Event on Funding held on October 12th at our Co-working space at Vcorp in Makati!
Our expert panel for the event was comprised of three startup owners who are experiences in various stages of startup funding and development. will be invited to provide insights into funding issues and create an impactful dialogue.
First, Diego Jose Ramos, Founder and CEO of Medical Tourism Philippines, stressed the importance of building a solid and trusting relationship with potential funders. Diego’s best tip for startup owners looking to find their first investor was to first build relationships within the circle of your potential funder so that you can be “vetted” by the group, thereby building credibility and lasting trust. In person interactions are best, Diego stressed; “Blind emails don’t work. No one will even mind you. I tested and tried it and it didn’t work here!”. Finally, Diego highlighted the importance of building a stong team before beginning to seek out funders, stating that Angel Investors don’t just invest in a startup’s owner, but on the entire team as well.
Kat Manalo, Co-founder & CEO of Aurelia & Amelia shared her thoughts with attendees, starting with her belief that everyone who supports social entrepreneurs or wants to begin a social enterprise should seeks to understand the funding problems that startups in the Philippines face. Speaking from experience, Kat informed the group that solid projections and numbers are necessary before seeking funding. “Any good startup will have an idea of where should I be in a year, 3 months, 6 months…. You should ask yourself, ‘If we raise funds, can we pay it back?’ If the numbers you’re producing don’t align with your vision and plan, then you’re not ready to raise funds”. Another of Kat’s important takeaways was centered around the idea that the Investor and startup relationship should be healthy and clearly defined from the start. It shouldn’t be a boss and subordinate situation. It should be a partnership with the investor and the startup growing together.
Christian Blanquera, the CTO Openovate Labs interjected a healthy dose of humor into his portion of the talk. Christian candidly talked about turn-offs to investors, including pitches and business plans that are too local. According to Chris, in order to raise large amounts of funding, a startup needs some sort of strategy to grow their company beyond their initial roots and expand into new markets. Another turnoff to investors is a startup founder that doesn’t understand the intricacies of their field. Chris stated: “Show [investors] that you know what you’re doing, that you’re going for bigger things. He also warned startup founds to take care in choosing the right person to partner with. “Investors are often sharky and want to take more equity than their fair share and it’s not right. Only give away 10-20%!”
Are you a startup trying to navigate funding? Here are a few more choice tips from the Forum’s panelists:
What should startups look for in an investor(s)?
• Go for Angels, not Sharks.
• Get bits and bits of your funding from lots of people.
• Speak up, put on a smile. Build relationships.
• Earn the trust of the people around the investor.
• Find someone who will not just give money but who will help your company grow in other ways. Look for someone with valuable expertise, ask to be introduced to their network or connections.
• Here in the Philippines, we are a relationship based country. Build a relationship with your investor!
How do startups know that they need to raise money or when it’s time to approach investors?
• Track your financials! Every founder who knows the vision of their company knows when to raise.
• Do everything you can to de-risk your company. What is your fail proof strategy?
How do you avoid employer/ employees relationship with your investors?
• look for compatibility. Make sure you’re a good fit.
• Be confident. Stay a step ahead of your investor.
• If you come in to a funding situation and that’s the relationship give the money back! The investor is investing in YOU just as much as in your company.
Following the Panel, investors in the room weighed in on their thoughts, chiming in to agree with the points raised by the panelists and to answer attendee’s questions.
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