Angel / Venture Funding
in the Philippines
Mercedes Barcelon
UP-Ayala Technology Business Incubator
Ayala Foundation
Areas to Cover
What is the profile of Angels and Venture
Capitalists in the Philippines?
What are other types of assistance?
How are we helping as an Incubator?
Venture Capital
Generally above $1m USD
Looks for very large markets that are targeted
Local VCs
Narra Venture Capital – software/semiconductors
ICCP Venture Partners – semiconductors/etc
Foreign VCs
Aureos Capital
Walden International (downsized their presence)
Hambrecht & Quist Asia Pacific
A fraction of the VC presence here before the dot.com bust
Prefer to take on a few big deals rather than many small
deals, because the amount of effort put in is almost the
same.
Aside from the funding, also provides expert mentorship.
Often staffed by tech experts who understand the
technology and business really well.
Angel and SME Loan Funding
Generally below $100k USD
Mostly loans
It helps a lot, if there is already a P.O.
Angel equity is available, but mostly from the
informal groups
Angel equity from institutional, formal groups are
few
Informal groups (e.g. friends, family)
Formal groups (e.g. banks, savings and loan)
Very few angels are familiar with the technology
or even the business being pitched to them
Needs more investor education
R&D grants
Government
Dept of Science and Technology
announced USD $12 M of R&D grants
for 2007
Private sector R&D
grants
MNC’s: Intel, Microsoft, etc.
Local: Ayala, etc.
SME’s: normally work for hire
Joint funding
multilateral – government
funding
(e.g. – UP Nat’l Institute of Physics
Molecular Beam Epitaxy (MBE) wafer
fab machine)
Aside from direct capital
Assistance through mentorship
Assistance through free office space
Assistance through free equipment use
Fabrication/Prototype Development
Test and measurement equipment
Computers, licensed software
Good credit terms
Exits/Listing/IPO
M&A is a typical exit
PLDT: Airborne Access, SMART
Very few tech companies list in the PSE
Some list abroad
Singapore:
Fastech
US: REMEC
Most prefer to remain privately owned
Interesting Comments
“A Purchase Order is better than investment capital.”
This is a comment from a UP Ayala TBI software business development manager.
“There is no financing gap, if you know the right people.”
Capital sources can be found in the strangest of places, if you know how to ask.
“One way to encourage more technopreneurs is through
government procurement.”
Comments by Deepak Amin, InfoDev workshop in Manila, Feb 2006.
“It’s pretty small.”
ICCP Venture Partners’ Bill Valtos, when asked about the $20m in venture capital
invested in Philippine tech companies in 2007, in a BusinessWeek article 18 March
2007.
Points to Ponder - 1
“Skin inthe game”
No seed or start up financing for VCs
Seasoned management
Exceptional business plans
Due diligence requirements
IP
Points to Ponder - 2
University R&D does not prioritize market
demand over need to generate new knowledge
University-based incubators deal with
commercializing university IP, and not
communicating market need to university R&D
staff
VC’s do not care about new knowledge/
technologies if there is no market demand
(ergo, no big $$$)
IPO or Merger & Acquisition
Working on the gaps
Product General Release Sale
Venture Capital
testing phase
Product Reference Client Sale
Bootstrap or Venture Capital
Product Beta Test Release
Bootstrap or Venture Capital
Product Certification
Angel or Venture Capital
applied
Product Testing
research
Angel or Venture Capital
Prototype Development
basic
Product R&D
research
Grant or Angel funding
Publication or Patent
Basic R&D
Government funding
TBI Initiatives
Expand network - VCs, Angels, Banks,
Government
Expose the startups – PESO-MIT Tech Biz Plan
“Learn from the masters” – Tech Marketplace,
Boot Camps
Innovation Forum/Tech Kapihan – Pitches,
VC/angels
“Straight and narrow while early” – SOOBox
Enhanced Solo Papaya, PESO 2005 winner, ringing the RFiDSP, PESO 2006 winner, at the Ayala Museum Awards
bell at the PSE w/some PESO finalists. Night.
2005 finalists 2006 finalists
Ayala Foundation, Inc., through
Bio-enterprise Pilipinas, Inc. (Best in Life/Bio-Science) RFiDSP (Best business plan)
the UP Ayala T BI p ro je ct, MicroNutrient Express (2nd runner up)
Biotech
sponsors the annual Pinatubo Dental (3rd runner up)
Blue Talk Proviera (Best presentation)
Philippine Emerging Enhanced Solo (Best 2005) Styropor Recycling (Best elevator pitch)
Feathers2Fish
Startups Open (PESO) Kamlong (Best in Agriculture/Aquaculture)
Gr8Eye
technology business LinSoC (Best in IT/Telecom) Aqua Veggies
MEDS
plan competition. The Sanitary Aqua Vendo (Best in Service)
TBI also gives “post competition Schyro Water International, Inc. (Best in Process
s uppo rt” to PES O Technology)
f i nal is ts / wi nne rs . CSPC
Yapsters
UP Ayala Technology Business Incubator
We nurture tomorrow’s tech businesses, today.
We all want to see Filipino tech startups grow into the next Intel, Google or Microsoft. But we have to
do more than talk about it.
We believe in the promise of a University Science Park – tapping the best and the brightest brains of
the academe, and surrounding them with the business incubation support of the Ayala Group. In
2006, UP Ayala TBI incubated companies had a combined gross revenue of P57 million pesos, and
directly employed 162 people.
In 2006, the nine UP Ayala TBI incubated companies had a
combined gross revenue of P57 million pesos, and
directly employed 162 highly skilled people.
UP-Ayala Techno Locators
Software for the Power Utility
Sector; e-pinoyFARMS Produces GIS Maps & health Outsource software producer for
Research database. the Japanese market.
Designs chips/firmware for
Corporate training, coaching & elearning
electronic systems for industry.
Hardware/software systems
predominantly for the Japanese Former tenants who are now successful elsewhere…
market.
Multilingual web and mobile enterprise
business software systems, PODS and Designs and builds wireless Mobile content for
Java electronic modules for int’l cellphones.
market. Now with Ayala group.
Sun Microsystems, AFI and
Mirant funded tool room &
Incubator for Java
www.up-ayalaTBI.org
barcelon.mm@ayalafoundation.org