The group of Manuel V. Pangilinan is pouring P500 million into its start-up “incubator” program to help local entrepreneurs turn good ideas into viable and profitable businesses.
Spread over five years, the money would be coursed through the IdeaSpace Foundation, which aims to cultivate a sense of entrepreneurship and innovation among young Filipinos.
“It’s been called an angel fund, an incubator, an accelerator fund. Whatever you call it, what’s important is that we are able to identify the talents that appear to be commercially feasible and helpful for the country,” Pangilinan told reporters.
“Mainly, the consensus of the senior management of the group is that we need to encourage the spirit of innovation, using science and technology as a tool, to make Filipinos more entrepreneurial,” he said.
He said P100 million a year for the next five years had been earmarked by the group to fund selected startup businesses in the country.
Aside from the direct financial assistance, the IdeaSpace foundation will also give small companies access to the Pangilinan group’s vast network where new products and ideas can be tested and fine-tuned.
The Pangilinan group controls several of the country’s largest firms, including Philippine Long Distance Telephone Co., Manila Electric Co., Metro Pacific Investments Corp. and Maynilad Water Services Inc.
Through IdeaSpace, Pangilinan said startups would also be supervised by management professionals that would give the “adult supervision” that many small firms need but lack.
Startups would be chosen through a nationwide competition where all small businesses with innovative ideas are invited to participate in.
IdeaSpace would provide financial and technical assistance that would help entrepreneurs develop their businesses. Once companies are to launch their products commercially, Pangilinan said entrepreneurs would have to give IdeaSpace Foundation a 20-percent stake in their respective companies.
The share in profits the foundation gets from these companies would be reinvested into the program, ensuring that in five years, IdeaSpace would be able to pay for itself.
IdeaSpace, Pangilinan said, aimed to create an ecosystem made up of educational institutions and private sector financiers that would be conducive to the growth of innovative small businesses—an environment similar to that in California’s so-called “Silicon Valley.”
“Hopefully we could get to that. We want to build a technological hub not dissimilar to San Jose and Palo Alto in the Bay Area,” Pangilinan said, referring to the areas near Standord University and the University of California-Berkeley that is the home of the likes of Apple and Google.