Financing Strategy

Traditional financing instruments like banks and microfinance institutions caters only to traditional business with proven business models. They are risk averse on new companies with new products and/or new business models.

On the other end, venture capital firms caters to high-tech businesses that has a chance to get an IPO in US markets.They follow the Silicon Valley-Stanford University Model wherein they wait for the Academe to produces quality cutting-edge research. However, their wait will be in vain because of the lack of proper foundation (technological and economic) of Filipino Scientists and Engineers. Well, it is still possible and there are several promising prospect at UP, Ateneo and La Salle and at some research institutes of DOST. They just have to wait. However, below is an alternative strategy that could allow them to drastically lessen the waiting time for incubation of new technology.


"If you give fish to a man, he will eat for a day. If you teach him how to catch fish, he will eat for a lifetime."

Chinese Proverb

In the knowledge economy, it is not enough that you teach a man how to catch fish. Fishermen today are living in poverty because of competition from bigger fishing boats and larger fishing companies. With this in mind, we will extend the Chinese Proverb a little further.

"If you teach how to fish, he will life until bigger fishing boats arrive. But if he teach him [or enable him] to build bigger fishing boats, he will eat for a lifetime and also feed the people around him."

Pilosopong Rodec

The Technopreneurial Revolution is not about giving bigger fishing boats, it will be about creating a mindset for continous improvement and about creating an enabling environment to support continous improvement. The Alternative Financing Catch-up strategy centers on this:



This strategy suggests that funding institutions should fund enabling companies. In general, they are medium-sized, medium-profit, medium-risk businesses. Continuing the analogy, companies that concentrate on building better boats, if there ever is a Filipino company that does this, it will be a swim against the tide. Profitability is not guaranteed. At least not in the first few models. Starting with the model of a typical 'banca', it will take some time before they could find a replacement that is cheaper, faster, safer and more reliable that will enable them to catch more fish. It might loose money for first few years. But if it does succeed, it could revolutionized the fishing industry.

Funding institutions are risk averse because they are not investing their own money, they are investing the money of their stakeholders. And they are answerable to these stakeholders on an annual basis. They would not be happy to loose money for several years. But risk like this should be taken, not just for the fishing industry for every traditional industry in the country.

Farmers and fisherfolks live in poverty because they using out-dated methods and tools. For government agencies, instead of dole-outs and subsidies( in terms of food, electricity, fertilizer, etc), why not allocate a portion of this fund to ventures that enable them to improve their conditions themselves in the long run.

For venture capitalists, this strategy could be more difficult for them since might find it hard to to justify this kind of strategy to their investors and it would be impossible for them to shift their business model towards this. However, it might be possible that they set aside a small portion of their fund for such ventures. As discussed in the Technology Catch-up Strategy, investments have to be made to small and low-technology enterprises because it will serve as a stepping stone to future ventures in high-technology projects. If they could incubate just one company, it could develop one major industry.