Getting funding for your technology business

By Dennis Posadas

This week let us discuss the basics of funding for technology startups.

The first thing one has to realize is that unlike a lot of businesses that have physical collateral (e.g. a building, manufacturing equipment, etc.), technology based businesses often have an additional type of collateral–namely intellectual property.

Now the problem oftentimes is that bankers in most parts of the world, including the Philippines, do not know how to value intellectual property. You can’t blame them; specialized consulting firms have sprouted up that can do these valuations, unfortunately not many of them are based in the country.

In addition, there is also the matter of how much sophistication there is in the product. If at first glance, the observer can figure out how the product or service works, then there isn’t too much of an intellectual barrier to start with.

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