Ratan Tata warns start-up businesses not to be ‘fly-by-night’ operators
At a time when many start-ups have been blamed for what is termed as "cash burn", industrialist Ratan Tata has warned that start-ups which burn investors' money and disappear will not get a second or a third chance. Tata, who also invests in start-ups, also said old-age businesses will recede and the young founders of innovative companies are the future leaders of the Indian industry.
The optimism of making money in the future makes venture funds invest in start-up companies, while many of them keep incurring losses. At its peak, e-commerce major Flipkart for instance was reportedly burning USD 150 million a month.
"We will have start-ups which will attract attention, collect money and disappear. Such start-ups will not get a second or a third chance," Tata, who was felicitated with the lifetime achievement award at the TiECON awards here, said.
Tata, who has invested in the e-commerce company Snapdeal, asked businesses to conduct themselves ethically and not to be "fly-by-night" operators.
He said the start-ups require mentoring, advice, networking and also recognition, and welcomed the role played by TiE, an organisation that seeks to promote the start-up ecosystem in India.
Tata also urged TiE to work as a shadow regulator for ethics and good practices, and ensure that the start-up sector grows in a manner that it should.
He was granted the award by Infosys co-founder N R Narayana Murthy.
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