The silicon valley of India seems to be a little weak at math. This is a conclusion that panel of experts has reached after a lot of discussion and deliberation. Bangalore has a lot of startups working on great ideas and at the same time executing them brilliantly as well. They are very good at their work, but there is one aspect where they still need a lot of help.
For a startup, their main aim is the development of their product and, therefore, the financial and law related aspects often go neglected. What these startups do not realize is that when they become a company from a team, there are certain things that need to be taken care of. They need to start operating in a different and more professional manner and cover all their bases. All of this was established at a workshop held by Indian Institute of Management-Bangalore in collaboration with Yale, titled 'Entrepreneurial Ecosystem of Bengaluru'.
The startups are good enough to get funding from investors but most of them startups face problems in managing their funding and their exit strategy. Exit strategy in a way is cashing out investment, or any arrangement for a buyout. This is one important decision that our CEOs need to work on very strongly. Startups need to learn to handle their finance and bookkeeping properly because this becomes a requirement at a later stage. In the initial stages, it is not an issue but as the company grows it becomes an issue. During an exit or an acquisition, proper bookkeeping is extremely necessary. Startups need to pay heed to this side of their venture as well and appoint a CFO to handle this aspect of the company.
The other area where startups need work is the legal documentation and requirement. Once a formal company is formed, there are certain regulations which need to be followed. Young entrepreneurs are unaware of even the most basic things like POSH when it comes to the law.
Another aspect was related to funding. The panelists felt that startups let the investors dictate them rather than them taking the front seat. In case of a deal being done, the startups are happy to sit back and just sign on the dotted line, rather than being active participators in the process. They need to be more proactive and sit in the driving seat. The conclusion came out to be that though the startups here are doing a very good job, but there are certain specific areas that still need a lot of work and polishing on their end.
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