DESPITE the growing number of startups emerging in the region, a government official expressed concern over the low participation in mentoring programs designed to support their growth and investment readiness.
According to Department of Information and Communications Technology-Central Visayas (DICT) 7 Director Frederick Amores, many startups in Central Visayas boast innovative technologies but fall short when it comes to business viability and investment appeal.
“The technology is impressive, but are these startups investible? Do they have real business potential? That’s where the problem lies,” said Amores. “The technology may be good, but they’re targeting the wrong market.”
While various government agencies such as the Department of Trade and Industry (DTI) offer programs focused on startup mentoring, including training on how to pitch to venture capitalists, the uptake remains low.
“The DTI has programs in place, but the problem is that very few are taking advantage of these coaching and mentoring sessions,” Amores added. “There’s even a program on how to prepare a pitch for venture capitalists, but there’s hardly any participation—and that’s disheartening.”
Amores emphasized that simply having a good product or idea is not enough. Startups must be prepared to communicate their value proposition to investors and have a solid grasp of business fundamentals, including exit strategies.
“If you want your startup to grow big, it’s not enough to know how to pitch. When speaking with investors, you need to have solid business sense,” he said, recounting a personal experience with a founder who was unfamiliar with the concept of an exit strategy. “I asked him, ‘If an investor puts money into your startup, what’s your exit strategy?’ He didn’t understand. He replied, ‘Why would I exit? This startup is my baby.’”
Amores pointed out that exit strategies such as initial public offerings or acquisitions by larger firms are essential considerations for investors, and founders must be prepared to address these if they hope to scale.
He also noted that while startup events and sessions are regularly promoted within the ecosystem, interest remains lukewarm.
“If you’re active in the startup community, you’ll see these mentoring and coaching sessions are constantly being promoted. But despite that, participation remains very low,” he said.
Amores’s remarks underline the pressing need for stronger engagement between startups and support programs to build not just tech-savvy, but truly scalable and investible ventures.
“Startups by nature are a bit abstract, unlike other types of investments. Say, for example, a factory. It’s understandable that you would need a lot to build a factory. But for startups, sometimes they’re in the cloud. So, questions like ‘What am I investing?’ arise,” said Amores, in past interviews.
However, the DICT 7 chief emphasized that there is substantial funding available in Cebu for startups, but greater awareness is needed to access it.
“We just need to connect with these people. But we still need to raise awareness about what startups are and also make our startups investable,” he said.
Amores pointed out that while venture capitalists (VCs) like Gobi are already present in Cebu, the key challenge lies in developing startups that are truly investment-worthy.
“Before we can attract a wave of VCs to flood Cebu, we must first focus on cultivating high-potential startups that merit their attention and funding,” he said.
Global ranking
According to Global Startup Ecosystem Index by research center StartupBlink, Cebu City’s startup ecosystem gained momentum in 2024, climbing nine spots in the list and solidifying its position as a rising innovation hub in the region.
The report measures startup ecosystems of countries and cities based on the quantity and quality of startups and business environment.
According to the report, Cebu ranks as the second-best startup ecosystem in the Philippines, next only to Metro Manila, and holds the 10th spot in Southeast Asia. On a global scale, the city is ranked 459th.
The Philippines, however, fell a notch to 60th out of 100 countries in the list. For the third straight year, the Philippines dropped in the annual list after logging a total score of 2.224. / KOC