'Don’t have victim mentality': Ashneer Grover has 10 suggestions for VC investors to help Indian startup ecosystem evolve 'fast'
In a post on LinkedIn, Grover said the growth of the startups in the country needs to evolve less with ‘Founders’ and more with ‘Venture Capital (VC) Investors’.
- Jun 30, 2023,
- Updated Jun 30, 2023 1:48 PM IST
BharatPe co-founder and former Shark Tank India judge Ashneer Grover on Friday said that the Indian startup ecosystem needs to evolve fast. In a post on LinkedIn, Grover said the growth of the startups in the country needs to evolve less with ‘Founders’ and more with ‘Venture Capital (VC) Investors’. He further said that there is a need to shift focus from demonising founders.
Grover's comment came in response to a post by Zerodha co-founder Nithin Kamath who pointed out that corporate governance issues coming to light in Indian startups will only increase with time, for which venture capital (VC) ecosystem should be equally blamed. The root cause of this is the overestimation of the size of Indian markets by founders and VCs, Kamath said.
Elaborating further, Kamath said that while India is a fast-growing economy that will hopefully be an economic superpower in the future, it isn't that today. The size of the target market (TAM) by revenue needs to increase significantly to justify the valuations of the startup ecosystem in the country, he mentioned.
"I think most VCs have miscalculated this and maybe oversold the India opportunity to their investors (LPs). In a small market like ours with limited mergers and acquisitions (M&A) opportunities, large exits within 7 yrs (the lifecycle of a fund within which founders are expected to give exits) are hard," he added.
Concurring with Kamath's explanation, Grover on Friday said that there is a need to stop demonising founders. The entrepreneur further highlighted certain qualities that VC investors should possess for the success of startups.
"India needs VC Investors who have seen cycles, have conviction to take stress from LPs or bad markets, read monthly MIS diligently - not SHAs, don’t need auditors to know what’s happening in business, are not litigative - don’t enjoy lawyers, can directly communicate with founder - not through press, are not wedded to their excel sheets, are statesmen - not fifth graders, view of their own - not relying on ‘lead investors’ and most importantly don’t have victim mentality - ‘humein to kuchh pata hi nahi tha!’," he said.
"VC Investors - act the number of zeroes you manage," Grover concluded.
The comments from Kamath and Grover come at a time when India's ed tech unicorn BYJU's, which was valued once valued at $22 billion, is seeing a significant drop in valuation. According to Prosus, the current valuation of Byju’s stands at $5.1 billion.
The edtech company’s statutory auditor Deloitte and three board members resigned recently. Deloitte said it was unable to audit the company because it did not receive financial statements for 2021-22.
BYJU's is also battling a US lawsuit over a $1.2 billion loan, which came weeks after raids over suspected violations of foreign exchange laws.
Also Read: ‘Invest more in R&D’: Ola’s Bhavish Aggarwal on how companies can become self-reliant
BharatPe co-founder and former Shark Tank India judge Ashneer Grover on Friday said that the Indian startup ecosystem needs to evolve fast. In a post on LinkedIn, Grover said the growth of the startups in the country needs to evolve less with ‘Founders’ and more with ‘Venture Capital (VC) Investors’. He further said that there is a need to shift focus from demonising founders.
Grover's comment came in response to a post by Zerodha co-founder Nithin Kamath who pointed out that corporate governance issues coming to light in Indian startups will only increase with time, for which venture capital (VC) ecosystem should be equally blamed. The root cause of this is the overestimation of the size of Indian markets by founders and VCs, Kamath said.
Elaborating further, Kamath said that while India is a fast-growing economy that will hopefully be an economic superpower in the future, it isn't that today. The size of the target market (TAM) by revenue needs to increase significantly to justify the valuations of the startup ecosystem in the country, he mentioned.
"I think most VCs have miscalculated this and maybe oversold the India opportunity to their investors (LPs). In a small market like ours with limited mergers and acquisitions (M&A) opportunities, large exits within 7 yrs (the lifecycle of a fund within which founders are expected to give exits) are hard," he added.
Concurring with Kamath's explanation, Grover on Friday said that there is a need to stop demonising founders. The entrepreneur further highlighted certain qualities that VC investors should possess for the success of startups.
"India needs VC Investors who have seen cycles, have conviction to take stress from LPs or bad markets, read monthly MIS diligently - not SHAs, don’t need auditors to know what’s happening in business, are not litigative - don’t enjoy lawyers, can directly communicate with founder - not through press, are not wedded to their excel sheets, are statesmen - not fifth graders, view of their own - not relying on ‘lead investors’ and most importantly don’t have victim mentality - ‘humein to kuchh pata hi nahi tha!’," he said.
"VC Investors - act the number of zeroes you manage," Grover concluded.
The comments from Kamath and Grover come at a time when India's ed tech unicorn BYJU's, which was valued once valued at $22 billion, is seeing a significant drop in valuation. According to Prosus, the current valuation of Byju’s stands at $5.1 billion.
The edtech company’s statutory auditor Deloitte and three board members resigned recently. Deloitte said it was unable to audit the company because it did not receive financial statements for 2021-22.
BYJU's is also battling a US lawsuit over a $1.2 billion loan, which came weeks after raids over suspected violations of foreign exchange laws.
Also Read: ‘Invest more in R&D’: Ola’s Bhavish Aggarwal on how companies can become self-reliant