Start-Up Governance: Luxury vehicle and salary of crores will be reined, startup founders will have to run 'shop' first

Many big changes can be seen in the startups world in the coming times. Recently, many startups have flopped in the stock market and the reckless spending of startup founders can be curbed.

Gone are the days of startup founders basking in the cash of venture capitalists. Recently, there have been cases of many startups flopping in the stock market, keeping high valuations despite huge losses, founders doing financial manipulation in the companies. That's why now there is a plan to follow strictness like corporate governance in startup companies. Know what is going to change in the world of startups…

In fact, many venture capitalists who are funding startups have been advised by consulting firms to get the companies included in their portfolio audited once. Regarding which there seems to be a consensus among the venture capitalists. Recently, many audit companies have also given their presentations regarding this to the venture capitalists.

Mistakes come to the fore in the audit

Complaints of financial irregularities in Indian startups have become common now. First, the case of Ashneer Grover and his wife Madhuri Jain came to the fore in Bharat Pe. After that, even after 'MamaEarth' withdrew from the IPO, the news of irregularities in financial accounts and over valuation came to the fore. According to a Mint news, out of 100 unicorns present in the country, only 25 are in a position to earn profit. Earlier startup companies like Paytm, Zomato and Nykaa listed in the stock market have failed to return even the original money of their investors.

In an Economic Times report, quoting a venture fund, it has been said that financial irregularities have come to light in the old audit of some companies. After the recent incidents of increasing mismanagement in startup companies, discussion on this issue has become most important among startup founders and investors. Now investors are completing the process of audit before investing in any startup, so that any such glitch can be detected which may cause big trouble sooner or later.

Talking about bringing corporate governance

There has been talk of introducing corporate governance in the startup world for a long time, and now recently after the case of 'Mojocare', it has again sparked discussion. The founders of Mojocare admitted to their investors that they inflated the company's revenue. That's why it is now being asked from the side of the investors to keep a close watch on the operations of the startup.

Apart from BharatPe, a number of issues related to company operations and governance have come to the fore in venture funded startups like Byju's, Jilingo, Rahul Yadav's 4B Network and Trail in the last one year.

In view of all these incidents, now venture capitalists are adopting a very careful approach before investing money in Indian startups. In the coming days, its impact can be seen on the funding of startups as well as on the lifestyle of startup founders, who often take crores of salary. They drive around in luxury vehicles and also buy luxurious houses.