New Delhi: Ashneer Grover, the Co-founder of BharatPe, is raising the questions of the startup funding ecosystem in India yet again. His remarks have ignited a new round of discussion among business leaders, investors, and entrepreneurs whether companies are spending too much time trying to raise capital versus developing sustainable businesses.
He explained that while investing is important to the success of a business, many startups see it as a significant accomplishment to raise funding in a big round.Many startups view their investments as a big accomplishment even though it is not the most important aspect of building a successful business, Grover said. Rather than frequent fundraising, long-term growth should be based on business fundamentals, customer satisfaction and steady profitability, he said.
His comments went viral, with people sharing their opinions both pro and contra. Some of the founders concurred that startups ought to be more concerned with earning cash and making worthwhile businesses rather than relying greatly on investor funding. During challenging economic times, they feel it’s even more critical to maintain good financial discipline.
The others stated that outside investment is a crucial factor in the rapid growth of startups, research and development of new technology, recruitment of good talent, and industrial competition. They stated many successful global companies also depended on investor help during their early stages until they became profitable.
There are no shortcuts for building the perfect start-up, industry experts say. There are businesses that require a lot of investment for quick growth, and there are others that require steady investment and can develop gradually with their own capital. The right strategy may vary based on the industry, business model and long-term goals of the business.
Investor expectations have also been a topic of discussion. Over the last few years, many investors have begun to pay more focus on profitability, cash flow and sustainable growth rather than just rapid growth and high valuations.
