PRIVATE holding firm Mr. Group of Cos. (MGC) announced plans to raise P150 million in the next two years to fund its program of providing financial support and other forms of assistance to the country’s start-up micro, small and medium enterprises (MSMEs).
The one-year-old firm, which considers itself as an “angel investment hub”, plans to raise P50 million this year and P100 million next year, MGC Chairman and CEO Rowi Bautista said. “We aim to help 10 MSMEs this year, each of them getting around P5 million funding, and another 15 MSMEs next year,” Bautista added.
MGC plans to raise the money from successful overseas Filipino workers and professionals who are looking where to invest their savings at an interest rate higher than those offered by banks, he explained. “At the same time, we want to help capital-starved MSMEs to become bigger players in the country that will eventually help fuel economic growth by providing jobs and spurring spending and investments.”
The idea to put up an angel investment hub in the country came after MGC encountered difficulties raising funds given its fledgling status. “We know all the hardships of a start-up company. We know how difficult it is to get financial support from banks, how difficult it is to compete with the established enterprises, especially the large corporations, in terms of funding and access to other resources,” Bautista said. “Having experienced the difficulties of a start-up, we’ve also learned what the solutions can be. We were able to appreciate the value of angel investing.”
Rate of return
ACCORDING to Bautista, MGC undertook a study that confirmed an angel investment hub, “this innovative way of investing in the Philippines, can be of big help to the MSMEs and to our economy.”
The study also revealed most angel investors in the country are either after only for higher returns on their investments or taking over the start-up company where they put their money into, or both, he said. “We found out something that is not acceptable to us. Because among the existing companies now involved in angel investing, there are a lot who don’t even have an advocacy,” Bautista added. “Worse, some even have hidden motives to acquire the business of the start-up entrepreneurs soon. We want to be differentiated from that.”
Bautista said MGC will raise the money by issuing either debt or equity instruments. It plans to participate in investor road shows abroad, in places where there are a lot of Filipinos working and residing. The rate of return is guaranteed at 2 percent a month, or around 24 percent a year, for debt equities.