A MID LAYOFFS and financial fraud, startups face not only a funding winter but the forthcoming Ides of March.
The discovery that GoMechanic – an auto services startup that has raised $62 million (Rs 510 crore) in venture capital and private equity funding since it was founded in 2016 and had a valuation of $350 million (Rs 2,900 crore) – cooked its books follows on the heels of several other startups accused of financial fraud, including Singapore-based fashion e-commerce tech firm Zilingo.
What do these cases mean for the future relationship between founders and funders? First and foremost, due diligence will sharpen. GoMechanic’s accounting malpractice was spotted only when Japan’s SoftBank Vision Fund vetted its balance sheet ahead of a fresh round of funding. It was set to lead a $75 million (Rs 640 crore) round. EY is now doing a forensic audit of GoMechanic’s books while the founders go on a forced leave of absence.
But financial fraud is not the only worry for both founders and funders of startups in India and globally where accounting frauds have spiked, especially in crypto firms like FTX. The other concern is the basic business model of startups.
Denne historien er fra February 25, 2023-utgaven av Business World India.
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Denne historien er fra February 25, 2023-utgaven av Business World India.
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MEMORIES & IMPRESSIONS
Ratan Tata was an exceptional human being. He was a visionary leader, esteemed industrialist, and a humanitarian, who left an indelible mark on India and the world.
The Robotaxi Market
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Sharp Slide in Industrial Output on Eve of Deepavali
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Heralding the Solar Era with Sustainable Electrification
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A WELL-GREASED MACHINE
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DO NOT LETA HEALTH CRISIS RUIN YOUR FINANCIAL HEALTH
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Disruption Ahead: Beyond Organisation Charts and Structures
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Dr. Rahul Shivajirao Kadam: A Visionary Leader Blending Sustainability, Innovation, And Social Empowerment
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