DICT Releases Guidelines for Startup Grant Fund

Under Republic Act No. 11337 or the Innovative Startup Act, the Department of Information and Communications Technology (“DICT”), together with the Department of Science and Technology (“DOST”) and the Department of Trade and Industry (“DTI”), is tasked to provide programs, benefits, and incentives for startup and startup enablers through the development of the Philippine Startup Development Program (“PSDP”). As the lead agencies tasked to develop and expand the PSDP, the DICT, DOST, and DTI have been granted the authority and mandate to establish their respective Startup Grant Funds (“SGFs”). Thus, on 15 March 2023, the DICT released Department Circular No. 001-2023 otherwise known as the Startup Grant Fund Guidelines (“DICT SGF Guidelines”) to establish guidelines for managing DICT SGF intended for Information and Communications Technology (“ICT”) startups registered with the Securities and Exchange Commission (“SEC”) or the DTI that deal with digital systems, applications, websites and other similar or related services, including applications thereto and the distribution thereof. All proponents may apply regardless of the date of incorporation or registration.

To be eligible for the DICT SGF, start-ups must comply with the following:

1. Must be registered through the Startup Philippines Website;
2. Must be engaged in the operation and development of projects which aim to develop an innovative product, process, or business model;
3. The proponent and its owners/incorporators/stockholders/organizers/partners, directors, and/or officers must not have any existing account with any government agency, such as technical, financial reports and any other accountability;
4. The proponent’s owners/incorporators/stockholders/organizers/partners, directors and/or officers must not have any pending administrative or criminal case involving financial transactions or fraud, or must not have been previously found guilty or convicted with finality in cases of similar nature; and 
5. Members of the project team shall not be agents of or related by consanguinity or affinity up to the fourth civil degree to any official of the DICT authorized to process and/or approve the Startup Grant Agreement (“SGA”) and the release of funds.

Benefits under the DICT SGF

1. Full or Partial Subsidies
   
   For the development validation and other activities necessary for customer validation of the idea and to design of a viable product. Successful applications shall receive a grant ranging from PHP500,000.00 to PHP1,000,000.00 which shall not exceed the amount indicated in the proponent’s Work and Financial Plan (“WFP”).

2. Mentoring and Coaching
   
   The DICT pool of accredited mentors, who have demonstrated expertise in the field, will serve as consultants to help the startup develop its products into a full-fledged business, equipped to offer its services to the public.

3. Access to the Network of Mentors and Investors
   
   Through a widened network of startup enablers and investors, the grant recipients or beneficiaries will have better access to supplementary funding after the completion of their project development under the SGF program. However, any funding or assistance personally extended by mentors or other resource persons invited by the DICT may only be done after the expiration or termination of the SGA between the DICT and the grantee. Violation of this shall automatically result in a termination of the grant and a return of the amount given to the grantee. Further, the grantee, mentor, or resource person may also be held liable for damages, in addition to other remedies available to the DICT, under the law, the DICT SGF Guidelines, or in separate agreements.

Requirements for Startups to Qualify for the Grant

1. Duly executed Application Form; 
2. Application Letter using the prescribed templated duly signed by the proponent and addressed to the DICT-ICT Industry Development Bureau Director, with a postal address and full contact details;
3. Company/Individual profile:

1. Disclosure of other related businesses, if any;
2. Sworn Affidavits from all of the startup owners/incorporators/stockholders/organizers/ partners/directors and/or project team that they are not agents of or related by consanguinity or affinity up to the fourth civil degree to any DICT officer authorized to proves and/or approve the grant and release of funds; and
3. Disclosure of other grants received. 

Aside from the above, applicants must also submit a complete project proposal using the prescribed DICT format and a financial plan. The project proposal must contain, among others, the following information: (i) name of the startup and title of the proposed project; (ii) duration of the proposed project; (iii) description of the startup and the founders; and (iv) description of the product and the value proposition thereof.

General Criteria for Evaluation of Startup Proposals

In deciding which startup to provide funding for, the DICT shall evaluate project proposals as guided by the following criteria:

Successful applicants will be awarded with an SGA which will provide the distinctive terms and conditions per beneficiary.
Complete requirements and more information on the procedure to obtain a DICT SGF may be referred to in the issuance, which can be accessed here.