A man who spent nearly 50 years being an entrepreneur and building Infosys from scratch has lambasted the funding procedure of start-ups nowadays!
India has made a giant transition toward a start-up culture from a more orthodox environment in recent years. Businesses are blooming in the country, and the procurement of funds to expand is at an all-time high.
But Infosys' founder Narayana Murthy has different thoughts on the topic. He thinks that the Venture Capitalists in the country are creating the wrong bubble for young entrepreneurs, and their obsession with start-ups is nothing more than a Ponzi scheme.
"I would hold the VCs who propounded the theory is that what is important is only the topline and not the bottom line. That's completely wrong. In many ways, it became a Ponzi scheme," said Murthy when asked whether he holds the young entrepreneurs responsible for the ambition to scale up fast.
Notably, the comments from the 76-year-old came in the light of a question by Snapdeal founder Kunal Bahl.
Narayana Murthy founded Infosys in 1981. Throughout the past decades, he worked tirelessly in establishing the company as one of the biggest in the business. And he succeeded in doing so before stepping down as the Executive Chairman of Infosys in 2014.
Looking at his journey, one could hardly argue that there are no shortcuts to success. In his conversation with Kunal Bahl, Murthy clearly stated that it is the role of VCs to tell the start-up owners to accept "deferred gratification" and play the long game while making necessary sacrifices.
In times when many businesses are running on funding without any inherent margins from the revenues, it has become essential for start-up owners and VCs alike to keep it simple and honest. The consequences of running a business solely on ordinary people's money and fundings by VCs are unacceptable and disgraceful for the country in general. After all, each one of us knows the story of Kingfisher and Vijay Mallya, don't we?
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