Angel investing network eyed

DESPITE a number of startup companies and local investors looking to develop the next big thing, there remains a gap that continues to keep both sides apart.

To bridge this gap, organizers of the Hack2Hatch: from Hacker to Founder event held over the weekend believe that the country needs a structured way to bring angel investors and struggling startups together.

Hack2Hatch chairman Winston Damarillo said that PhilDev (Philippine Development Foundation) hopes to set up a network of angel funders with a structured framework to encourage more investors.

He said local investors need to understand the basics before they get into such projects. He added that the presence of more investors would also encourage more entrepreneurs to pursue their dreams.

Model

“The worst thing that happens to entrepreneurs is when they are disappointed,” said Damarillo.

A model they hope to follow is the Tech Coast Angels in California and try to make it fit for the Philippine environment.

Damarillo added that even non-venture capitalists are interested to invest but do not know how to go about it.

Alvin Gendrano, director of Microsoft Philippines’ developer and platform group, said the biggest challenge for entrepreneurs is getting their hands on early seed funding, which he said is crucial to get things started.

PhilDev chairman Diosdado Banatao noted that there are many venture capitalists in the country and are interested but lack the information and experience. Many of them are also wary and told him they are willing to invest if Banatao himself invests in a company.

For Sheila Lirio Marcelo, PhilDev trustee and founder and CEO of Care.com, what the country needs is exposure so they will feel comfortable in taking risks. She added that the Philippines does not have to mimic the Silicon Valley ecosystem, only its best practices.

Those in the industry believe the time is right to begin developing local startups, as the country is beginning to be more aware of their potential in contributing to the economy. PhilDev’s aim is to bring long-term economic growth to the country through education, innovation and entrepreneurship. They envision the country’s software developers as the ones bringing in the next P10 billion contribution to the Philippine
economy by 2020.

Ready

PhilDev president Catherine Buan Peterson said the country is ready as people are coming to realize the potential of entrepreneurship becoming a big contributor to the economy. She added that the Philippines is also ripe with talent.

Banatao said that access to information is easy these days, with everything on the Internet, which is why there is an air of “excitement in the ability to write code.”

They also believe that the government has also sent the right signals by committing to do the right things and setting the right environment for business by signaling its intent to eliminate corruption.

Gendrano said that publicity such as movies like “The Social Network” helped to drum up interest while big corporations in the country have also realized the need to support startups.

Dr. Francisco Sandejas, managing partner of Narra VC, said that aside from getting startup companies to go global, they can also offer solutions to the country’s conglomerates.

For entrepreneurs, Banatao and Marcelo said what they should improve on is an understanding of market needs and in executing business decisions well.