At the end of this module, the learner should be able

to know about:

1. Sources of capital: Debt and Venture Capital

2. How to differentiate incubator and accelerator
3. Grant
4. Competition
CAPITAL refers to financial assets, including funds that are held in an
account, that are used to build wealth in your business. Note that
materials that are consumed or used as part of a process isn’t capital.

RAISING CAPITAL means getting the money you need to grow your
business from investors. Raising capital is another way of talking about
financing your business. You can raise capital through investors, or you
can take out debts, like loans or credit cards, to finance your business
venture.
WAYS ON HOW YOU RAISE CAPITAL

1. Personal Investment
• Your first investor should be yourself either with your own cash or
with collateral on your assets
• This proves to investors and bankers that you have a long-term
commitment to your project and that you are ready to take risks
WAYS ON HOW YOU RAISE CAPITAL

2. Ask Friends and Family

• If you have close enough relationships with your family or friends
who have some business experience, see if they can help you out
with a loan.
• Treat any loans from a family member or friend the same as you
would with a bank or other lender.
• Write down your terms and make sure both parties sign an
agreement. Make your payments on time and in full.
WAYS ON HOW YOU RAISE CAPITAL

3. Crowdfund
• It is when businesses, organizations or individuals fund a business
without traditional means with small donations from many people.
• Crowdfunding sites have become a popular source for business
startups to get money from like-minded investors.
• You also need to have a killer story that will attract a lot of buzz and
convince people to give you, their money.
WAYS ON HOW YOU RAISE CAPITAL

4. Take Out a Loan

• You can take out a loan from a bank or online lender if you qualify.
Online lenders are often more likely to lend to startups than
traditional banks, so look there if you get rejected for a bank loan
from your home bank.
• You can also take out a business credit card to buy capital
investments, and then pay your creditor back every month.
WAYS ON HOW YOU RAISE CAPITAL

5. Find an Angel Investor

• Angel investors by definition are accredited by the SEC and have at
least $1 million in net worth and an annual income of at least
$200,000.
• They are frequently retired business owners who want to mentor
other business owners and be involved in making business decisions.
• They use their own money to fund businesses.
WAYS ON HOW YOU RAISE CAPITAL

6. Pitch to a Venture Capital Firm

• Venture capital firms are made up of investors and companies who
want to invest in companies that have long-term potential. They tend
to invest significantly more than angel investors, since they aren’t
funding with their own money, and they generally want a seat on
your Board of Directors.
• Venture capitalists are looking for technology-driven businesses and
companies with high-growth potential in sectors such as information
technology, communications and biotechnology.
A business accelerator is a program that gives developing
companies access to mentorship, investors and other support that
help them become stable, self-sufficient businesses.

Companies that use business accelerators are typically start-ups

that have moved beyond the earliest stages of getting established.

An accelerator program can last anywhere from two to six months.

The goal is for companies to emerge ready to run on their own,
with strong positioning to claim a share of their target markets.
There are two main kinds of business accelerators:

1. Seed programs last two to four months and focus on less mature
start-ups, building up their business fundamentals before giving
them the opportunity to pitch their ideas to investors.
2. Second-stage programs last up to six months and focus on more
mature start-ups, connecting them to the full range of support
and opportunities.
Common services:
1. offering access to investor
2. networks
3. mentorship
4. office space
5. an opportunity to pitch directly to investors at the end of the
program
A business incubator is a program that gives very early stage
companies access to mentorship, investors and other support to
help them get established.

An incubator program can last anywhere from several months to a

few years. In every case, the goal is to give start-ups the tools and
knowledge they need to stand on their own two feet. Some
incubators operate as non-profit organizations while others
provide seed capital and support in exchange for equity positions
(i.e., ownership) in the companies.
An important distinction between accelerators and incubators is
that accelerators have a graduation date or demo day after a short
period (usually under three months), whereas incubators can work
with companies for much longer periods of time.
The 2020 Philippine Startup Survey reports that there is 35+
incubators and accelerators, 40+ venture capitalists, and 50+ angel
investors in the Philippines.

The startup incubators and accelerators in the Philippines:

1. Aim-Dado Banatao Incubator
2. Ideaspace Foundation
3. Impact Hub Manila
4. Qbo Innovation Hub
• A grant is a quantity of money, i.e., financial assistance, given by
a government, organization, or person for a specific purpose.
• Unlike a loan, you do not have to pay back the money. In some
cases, the receivers of study grants who abandoned their courses
have to pay back the money.
• The financial assistance may be for a student to study or for a
team to carry out research. The government may also award
grants for home insulation, community projects, or setting up
businesses.
1. Project or Program Grants
• Funds that are granted to support a particular activity of a
nonprofit organization are referred to as project or program
grants.
• These types of grants provide money that is earmarked to cover
expenses associated with specific activities carried out by a
charitable entity.
2. General Purpose Grants
• Some grant programs offer general purpose financial support,
providing monies that can be used as the funded organization
sees fit.
• If you are fortunate enough to receive this type of grant, you'll be
able to utilize the funds for operating expenses, programs,
projects, planning, or to meet any other need that the entity you
represent may have.
3. Start-up Grants
• If you are looking into the possibility of starting a new charitable
organization, you'll want to apply for start-up grant funding.
• These types of grants provide what is often referred to as "seed
money" designed to help a new entity get started.
• Funds may be provided for a year or two, after which time the
entity is expected to be self-sustaining, either through its own
activities or through other grant programs.
4. Facilities and Equipment Funding
• Some types of grants provide support specifically to enable
charitable organizations to build and maintain the facilities
necessary to provide programs and services, as well as to
purchase needed equipment.
• For example, these types of grants might cover all or part of the
expenses for constructing a new building or purchase equipment
to outfit a computer lab for an after school program.
5. Planning Grant Funding
• Planning grants provide funds to support the initial research
efforts necessary to establish a new program. If you're going to
apply for this type of grant, you'll need to be able to make a
strong case for why the program you are trying to establish is
necessary.
6. Technical Assistance Grants
• Grants classified as technical assistance funding provide grant
money to support the administrative functions of a nonprofit
organization.
• The funds aren't used for a particular program or project, but are
rather provided to cover the overhead expenses associated with
running the entity, including marketing and financial
management.
There are three main sources for grant funding:
1. THE GOVERNMENT - often federal, sometimes state, and
occasionally local
2. PRIVATE BUSINESSES AND CORPORATIONS
3. FOUNDATIONS - which distribute many millions of dollars per
year to community groups and organizations similar to yours
 END
Thank you for listening.
Any questions?