Crowd Funding Bill in the Philippines

by Patrizha Meer on November 25, 2014

What does the Crowd Funding Bill mean to an ordinary Filipino citizen? Maybe some Filipinos have some idea about it but let us all be open about the fact that upon hearing this "crowd funding bill," most of us would still be in the dark and admit not knowing much about it. When and where did the Crowd Funding Bill start and who proposed it here in the Philippines?

Vigattin Radio invited Earl Valencia of Ideaspace, Atty. Oscar Franklin-Tan (writer in inquirer.net), Atty. Bayani Abesamis (proposed to Sen. Bam Aquino the Crowd Funding Bill), Ralph Ebora (Chief Hardware Engineer of Wattsmart) and Miguel Daniel Marfori (Shop Manager of NYFTI)

The Crowd Funding Bill according to Atty. Bayani Abesamis, the one who proposed it to Senator Bam Aquino, the Crowd Funding Bill is used by business proponents, startups, small and medium enterprises to generate capital using the Internet, and they will have the chance to generate or gain access to capital.

They can offer shares in their company or offer an ownership interest in their company through the internet. Atty. Abesamis cleared that according to the current Philippines Law, this cannot be allowed. The startups that are planning to use crowd funding must undergo many procedures and will cost them too much. Crowd Funding Bill is an all-or-nothing deal.

Who are the key players in this Crowd Funding Bill? First, the Project Creator. They are the masterminds of this project, the one who will propose the concept to the crowd. Second, the Crowd. They will be the ones who will give life to the project.

The crowd will make the project successful because they are the ones who will criticize the credibility of the project. Lastly, the Crowd Funding Platforms. These are the websites that will facilitate the fundraising and will connect the project creator to the crowd.

How long can a startup business live on the budget that they will be getting from the crowd funding? According to Mr. Earl Valencia, half a million could be stretched or shortened as much as they can but on average, they could last 6 to 12 months as there are lot of expenses incurred by a business.

There are types of crowd funding: reward-based and equity-based. Being reward-based involves pre-selling products but not offering shares in the company. Being equity-based mans you will be one of the owners of the company. The business will indicate where will the money will be spent with proof of the purchase of the equipment, and that will make transaction transparent.

Examples of startup businesses that look forward to the Crowd Funding Bill to be approved are Wattsmart and Nifty Folding Bike. To startup businesses like them, it would be a big help for their business to survive.

The recent status for Crowd Funding Bill according to Atty. Abesamis is that they are still coordinating with the good office of Sen. Bam Aquino and is undergoing to the regular vetting process and looking for congressional sponsors.