Millennial‑run crowdfunding platform brings ‘bayanihan’ to entreps

The saying “nothing is original” can’t be truer in the context of crowdfunding. The practice of raising small amounts of money from strangers via the internet is really is no different from the Filipino spirit of “bayanihan”—just sans the actual manual physical labor of lifting up the stilts of a nipa hut.

Over on The Spark Project, strangers are lifting each other up by helping creative entrepreneurs fund projects: a gamut of products and services that include Internet-of-Things-enabled door sensors, classroom painting projects, virtual conferences, and even the “first Filipino watch brand” that has the word “Manila” placed on the bezel.

Crowdfunding is a “smart way” for startups to get funding, says The Spark Project’s CEO and founder Patch Dulay, who calls himself a “startup enabler.”

“With traditional sources of funding such as banks, if you’re a starting entrepreneur you don’t have a credit line yet, so you won’t have access to that,” he told SparkUp in an interview. “Competitions, yes it’s a good jump‑off point, but only a few get the prize. Sometimes it’s not even monetary. Investors are picky as they also have limitations, so it’s hard for entrepreneurs to rely on other people’s decisions.”

Dulay launched the platform in 2013, inspired by American crowdfunding sites like Kickstarter and Indiegogo that both provides artists and new entrepreneurs with an avenue to raise funds for their projects or products.

“I couldn’t participate in the platforms since they were limited to the U.S.,” he said. “I thought, “Why not have one in the Philippines?’”

The spark was immediately followed by action. At that time, Dulay immersed himself in the community entrepreneurs, even taking global e‑business in France during the time when social media and the latest developments in Web 2.0—the tech jargon referring to the second generation of the World Wide Web where developers moved from static HTML pages to more interactive web experience—were starting to flourish.

Upon returning to the Philippines in 2011, he was exposed to social entrepreneurship and to the then‑emerging tech startup community in the Philippines.

“One of the reasons why I wanted to go back home was I felt that I have always had a calling or need to do something significant with the work that I do,” he said. “And when I was thinking about what I was doing then when I just finished my master’s degree, I knew that by going back to the Philippines, I can make most impact.”

Combining his expertise in information technology and exposure entrepreneurship, he took the plunge and introduced The Spark Project.

To date, a total of ₱5.8 million from some 2,678 backers has already been raised for 63 projects through platform.

“These startups are really good, they have amazing projects and concepts, but a lot of them funding is really one of the resources that they don’t having an access to,” he said. “I thought, why not bring crowdfunding to the Philippines because I knew it could help a lot of entrepreneurs.”

Supporting local creatives

In choosing projects in the platform, Dulay said they prioritize local creative enterprises that already have a prototype of their products.

“Through the review process, we check if they are real people and if what they are trying to crowdfund isn’t just a concept. They must already have began certain activities that ensure they have already studied their project and they know how to execute it,” he explained.

They help enterprises identify the amount of money needed to be raised by providing them with historical statistics. In crowdfunding, he also learned, time is of the essence.

“A campaign longer than 30‑45 days would just drag or come out with the same result,” he pointed out. Better to limit it to less than that.

More than money

While crowdfunding has helped fund a plethora of projects, Dulay noted that not all types of business are suitable for it.

“Crowdfunding is not for everyone. Right now in the Philippines, most of the crowdfunding successes are more product-driven or more product-based business,” he said.

There is also no assurance that it can help attaining one’s required amount of money. But Dulay said it is a “good alternative” to the traditional practices of sourcing money for startups.

“Crowdfunding allows businesses to take matter in their own hands and in making their ideas happen,” he said. “It attracts passionate entrepreneurs who want to get things rolling.”

He added, “Sometimes when you asked entrepreneurs, they don’t need millions of pesos to start, sometimes all they need is a hundred thousand to get the first batch running and from there they can already sustain operation.”

According to Dulay, the benefits that enterprises can get from crowdfunding are beyond mere cash. Through it, he said businesses can “validate their idea to see if people are responsive to the product or service they are putting.” Crowdfunding, he added, is a “smart way of doing business” because it gives entrepreneurs access to their potential customers. A lot of creative entrepreneurs, in fact, use it to pre-sell their products.

“What makes crowdfunding interesting is that people don’t just give money to a project,” he said. “They give money with the understanding that the project would give them rewards in return, which may vary depending on the project or the amount of money that you give.”

At present,  crowdfunding in the Philippines, according to Dulay, is just at the “infancy stage,” but he is optimistic that with proper education and government’s support, its potential could be “unlocked” to benefit small businesses and the country’s economy at large.

“There’s still a lot of room to grow,” he finally said. “I’m still hopeful that more people and more entrepreneurs see the value of crowdfunding and see it as a viable means to raise funds and build their business.”