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Startup firms must commit to good governance projects to build investor confidence amid economic uncertainties and ongoing funding lags, according to venture capitalist firm Kickstart Ventures.
With a young, digitally savvy population, Kickstart Ventures said the Philippines is in a prime position to be a major hub for technological innovation.
The company said this potential hinges on the sustained growth and investor confidence in local startups, which shall be realized through good governance practices.
“Good governance is a key indicator of stability, especially in a climate where investors are more cautious,” said Jecky Pelaez, partner for legal and compliance at Kickstart Ventures
“Startups that embrace good governance are better positioned to build trust, attract funding, and scale sustainably,” he added.
Pelaez said a shift in attitude among startups is particularly crucial amid growing concerns over economic uncertainties that have unsettled capital markets and worsened funding lags.
He noted that recent cases of mismanagement and financial misconduct among startups in Southeast Asia affected investor confidence in the region.
Pelaez said good governance is critical in such a challenging environment as it enables startups to build a strong foundation to entice investors.
“Good governance isn’t just about compliance; it’s about being proactive participants, building trust, staying transparent, and growing the right way,” he said:
Kickstart Ventures, the country’s largest corporate venture capital (CVC) firm, said its standard practice in investing is to first assess startups that are best equipped and dedicated to sustaining growth.
The company said this assessment is guided by due diligence checklists and best practices that were refined over years of working with its diverse portfolio of clients.
Kickstart Ventures said they provide post-investment support to startups they invest in, ensuring these firms keep up with their growth through strategic oversight.
Essentially, this involves reviewing and ensuring compliance with documents, as well as conducting regular performance assessments.
Beyond this, the company said it also engaged in efforts to foster trust with the startups to affirm strong human relations.
“Altogether, this balanced approach helps ensure operational efficiency and continued profitability,” it said.
With the Philippine economy emerging as one of the fastest-growing in Southeast Asia, Kickstart Ventures stated that this signals growth opportunities for companies to harness good governance to boost investor confidence.
As such, the company said that good governance efforts must be a shared responsibility between a venture capitalist and startups to secure long-term growth.
“Founders must establish systems centered on transparency and accountability,” it said.
“At the same time, venture capitalists must boost their due diligence efforts to ensure the necessary safeguards are in place and serve as active partners, providing capital, strategic guidance, and oversight,” it added.
Kickstart Ventures, a wholly-owned subsidiary of Ayala-led Globe Telecom Inc., has 70 investments worldwide led by more than 130 founders.
