Gone are the days when dumping money into business pitches that made sense was the key to reaping profits or diversifying investment portfolios. It is now evident that being a tiger globally does not mean your money is in clean hands. Regardless of whether a founder, co-founder or any other relative is involved in today’s business affairs, all governance and compliance checks have to be implied in real-time. They cannot be kept aside for monthly, quarterly, or annual audits. Clearly, such routine audits have been tossed out by employees who are on high alert when they see sizeable sums of money filtering out of their business corpus.
Would it be reasonable to suppose that such undercurrents suddenly became tsunamis surging into boardrooms? Definitely not! Whether those with vested interests belong to the responsible elite club or other stakeholders of such start-ups, they have, one and all, been ignorant of the normalcy that a legal and regulatory environment could bring in a large startup ecosystem.
Please click here to read the full article by Sidharrth Shankar, published in India Today.
Sidharrth is the Co-Chair of the Corporate Practice at JSA. He specializes in General Corporate Commercial, Mergers & Acquisitions and Private Equity.