For many small and medium enterprises in the Philippines, raising capital is a critical step toward growth. Whether you are looking to expand your operations, improve cash flow, or bring in a strategic partner, securing funding can unlock new opportunities for your business.
Fundraising is more than just asking for money. It is about showing that your business has the right foundation, the right plan, and the right team to succeed.
What to Expect from the Fundraising Journey
While every business is different, most successful fundraising efforts follow three key stages. Understanding each one can help you avoid common pitfalls and improve your chances of closing a deal.
1: Prepare Your Business
Before approaching investors or lenders, take a step back and look at your business from their point of view. Ask yourself: Is your business ready for outside funding?
Start with your financials. You do not need a complex financial model. A simple three-year projection is enough if it clearly shows expected revenue, expenses, and profit. Prepare a short presentation that outlines your growth story, your customers, and what makes your product or service valuable.
Organize key documents, such as permits, contracts, and financial records. These will come up during investor discussions. Having them ready saves time and shows professionalism.
If you can, speak to an advisor or someone who has raised capital before. Even a short conversation can give you useful insights and help you avoid common mistakes. According to industry studies, businesses that work with experienced transaction advisors and prepare a clear and compelling investment story often achieve higher investor interest and secure valuations that are 20 to 30 percent higher than those that go through the process on their own.
2: Find the Right Investor or Lender
Not all investors are alike. Some focus on early-stage companies with fast growth. Others prefer stable businesses with regular income. Some only provide funding. Others bring additional value through expertise or market access.
Think carefully about what kind of support your business needs. If you are growing quickly, a private equity investor who understands your sector might be a good fit. If you want to scale operations, a loan from a local bank or government program could be more appropriate.
Tailor your pitch based on who you are speaking to. A lender will focus on your cash flow and ability to repay. An equity investor will want to understand how your business can grow and generate returns in the long term.
The goal is not only to raise capital. It is to build a relationship with someone who believes in your business and shares your vision.
3: Close the Deal
If an investor or lender shows interest, they will want to review your documents and ask detailed questions. This part of the process is known as due diligence. Be ready to provide updated financials, proof of ownership, customer references, and any agreements you have in place.
If the process moves forward, you will be asked to sign legal documents. These may include shareholder agreements, loan agreements, or investment terms. Make sure to read and understand every clause. If there are points you are unsure about, ask for legal advice.
A clear agreement protects both sides and lays the foundation for a healthy partnership.
Best Practices for Fundraising Success
Start preparing early: Give yourself at least six to twelve months before you actively raise funds. This gives you time to improve your numbers, fix weak areas, and get feedback.
Be honest and transparent: Investors are not expecting perfection. If there are issues in your business, explain them and show how you plan to solve them.
Track and share your progress: Even small wins can build confidence. New clients, higher revenues, or improvements in efficiency are all signals of momentum.
Know your numbers: Understand how much capital you need, what it will be used for, and how it fits into your growth plan.
Work with people you trust: Good advisors can help refine your pitch, prepare documents, and introduce you to the right investors.
Where the Opportunities Are
Investors continue to show strong interest in the Philippines, especially in sectors with long-term growth potential. According to a study by Index Partners, mid-sized deal activity rose by more than 20 percent in 2023 compared to 2021. Here are a few sectors where SME fundraising has been especially active:
Renewable energy
With the Philippine government aiming for a 50 percent share of renewables by 2040, investors are actively seeking developers and operators in the clean energy space. Businesses involved in solar, hydro, or energy storage may find strong demand.
Healthcare
There has been growing interest in private clinics, specialty centers, and digital health platforms. The trend is driven by rising demand for accessible healthcare and opportunities to modernize outdated systems.
Digital infrastructure
With the increase in mobile usage, remote work, and cloud-based services, digital infrastructure is a high-priority area. Companies working in connectivity, internet services, or data center development are gaining attention.
Consumer and retail
Policy reforms have lowered barriers for foreign investment in retail. This opens the door for local brands to secure funding from global partners or expand into new markets with added support.
If your business is active in any of these sectors or can align with their direction, this could be the right time to explore capital raising.
About the Author
Aljon Del Rosario is a corporate finance advisor and Director at Index Partners, a transaction advisory firm focused on emerging markets including Southeast Asia, Africa, and the Middle East. He has advised entrepreneurs, family businesses, and mid-sized companies on raising capital, selling businesses, and forming strategic partnerships.
Aljon is also a founding member of the Business and Management Consultants Association of the Philippines, a non-profit group that promotes professionalism and ethical standards across the consulting industry.
To reach him, you may contact aljon@thedelrosario.com or aljon.delrosario@index-partners.com
