Startups that burn investor money and disappear won't get second chance: Ratan Tata
Tata also said old-age businesses will recede and the young founders of innovative companies are the future leaders of the Indian industry
Industrialist Ratan Tata on Tuesday warned that startups which burn investors' money and disappear will not get a second or a third chance.
Tata, who also invests in startups, said old-age businesses will recede and the young founders of innovative companies are the future leaders of the Indian industry.
The comments from Tata come at a time when many startups have been blamed for what is termed as "cash burn", wherein the optimism of making money in the future makes venture funds to invest in such companies, and the companies keep incurring losses.
At its peak, ecommerce majorwas reportedly burning $150 million a month.
"We will have startups which will attract attention, collect money, and disappear. Such startups will not get a second or a third chance," Tata, who was feted with the lifetime achievement award at the TiECON awards in Mumbai, said.
Tata, whose portfolio also consists of ecommerce company Snapdeal, exhorted businesses to conduct themselves ethically and not to be "fly-by-night" operators.
He said the startups require mentoring, advice, networking and also recognition, and welcomed the role played by TiE, an organisation that seeks to promote the startup ecosystem in India.
Tata also urged TiE to work as a shadow regulator for ethics and good practices, and ensure that the startup sector grows in a manner that it should.
He was granted the award by Infosys co-founder NR Narayana Murthy.
Last year in December, Ratan Tata puts together a startup pitch deck template for entrepreneurs after launching an Instagram poll that received a resounding 97 percent vote from his followers. The pitch deck also includes Ratan Tata's personal advice for startups and entrepreneurs.
He put up a link to a pitch deck he had put together, with an accompanying message that read:
"The young debuting entrepreneurs among you are setting out on your exciting startup journeys, but you’ve often asked what the first step might be. I have, with the help of my office, put together a basic entry-level pitch deck, which if nothing else, might help you collect your thoughts and get started. I encourage you to research its elements, and create your own recipe, that helps you seek investments and take your stories further, stories that I cannot wait to see succeed. Wishing you all the very best!"
The startup pitch deck -- a 16 slide PowerPoint presentation, watermarked Office of Ratan Tata -- details the most important aspects that should be covered in any pitch by a first-time entrepreneur.
(Disclaimer: Additional background information has been added to this PTI copy for context)