With top dollars flowing in, Indian startups need to reset their moral compass

New Delhi, Mar 6 (IANS): The Ashneer Grover-BharatPe tussle that hogged the limelight since January has brought to the fore the need to fix corporate governance while maintaining moral integrity at the very top in the burgeoning Indian startup ecosystem.

Top dollars continue to flow in as 44 Indian startups achieved unicorn status (of valuation more than $1 billion and above) in 2021, taking the overall tally of unicorns to 83, most of which are in the services sector.

In 2021 alone, the Indian startup eco-system raised over $40 billion, while $6 billion was raised via public markets with 11 startup IPOs.

According to the government, since 2016, 60,000 new startups have been established in 56 different sectors in our country.

As per the Economic Survey 2021-22, India now has more than 61,400 startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT), of which at least 14,000 were added in the 2021-22 fiscal.

India’s unicorns are currently worth more than $168 billion, and fintech platform BharatPe was last valued at nearly $2.85 billion (it was set to raise more funds at $4 billion valuation when the Ashneer Grover controversy hit the company hard in January).

With money comes great responsibility and without proper governance standards for the startup ecosystem in the country, the risks of the founders going astray are very high, say industry players.

According to Satish Shukla, Co-founder and Head (HR and Marketing), Addverb Technologies, which is a homegrown automation company, growth is important but sustainable growth is the quintessential parameter for any startup which can be achieved by building robust processes, healthy culture , sticking to the core purpose of the brand and keeping the customer at the centre.

“One will achieve nothing if the internal matters go out, so maintaining confidentiality under all circumstances, and maintaining the highest levels of corporate ethics is something one should strongly believe in and must be abided by,” Shukla told IANS.

In 2015, the board of Housing.com sacked Co-founder and CEO Rahul Yadav with immediate effect during a regular meeting held in Delhi.

The board unanimously agreed to sack Yadav, saying that his behavior towards investors and media was not befitting of a CEO and was detrimental to the company.

Then 25-year-old, Yadav was in the news for questioning the intellectual capability of his company’s board and giving away all his holdings in the company worth Rs 2,000 crore to the employees.

An email he wrote to investor Shailendra Singh of venture capital firm Sequoia Capital went public, which created a strong media buzz. Yadav had resigned calling his board members and investors “intellectually incapable” of having a discussion.

Recently, Indian-origin CEO Vishal Garg at digital mortgage company Better.com was massively trolled for laying off 900 employees over a Zoom call. The arrogant behavior led to several senior executives quitting the company.

The incident saw several rounds of layoffs and the employees are still protesting his return as the CEO.

According to Saurabh Singh, Director of mobile app development platform Appinventiv, moral integrity is all about honesty, wholeness and being the same person in all situations and with all people.

“Moral integrity and employee satisfaction go hand-in-hand. Happy employees at the workplace mean high moral integrity standards at the organisation,” he told IANS.

During the pandemic startups with good leaders have accomplished what had previously been thought impossible.

However, when you have a lot of investors and stakeholders in your company, it’s not just your company anymore.

“It has to be run while keeping everyone in confidence. Everyone wants the growth of the organization and any dispute in the board with investors should be handled within the closed doors to make sure that the customer/client do not lose confidence in the company, Singh said.

In these times when capital is abundant, founders need to be transparent and take a long-term approach to wealth creation, say startup industry players.

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