![](\"..\/images\/spacer.gif\"){kind=spacer}
<\/i>Suparna Goswami, Forbes <\/i><\/p>\n <\/i>Suparna Goswami, Forbes <\/i><\/p>\n
Bengaluru, 17 January 2017<\/i><\/p>\n
![\"\"](\"..\/images\/flipkart-founders.jpg\")
The\npast week saw India’s Flipkart appointing a non-founder CEO who is also\npart of Tiger Global Management, the online marketplace’s largest\ninvestor firm.
A few days later, Snapdeal, another large Indian\nonline marketplace, brought in real estate firm Housing.com’s CEO Jason\nKothari as its chief strategy and investment officer. This news comes\non the heels of a recent merger between Housing.com and real estate\nbrokerage firm Prop Tiger, which has raised funds from SoftBank – a\nmajor investor in Snapdeal.
Are we seeing a pattern of investor overreach into startups in India?
With\nthis latest SoftBank connection, many are starting to lament how young\nbusinesses in India are facing excessive interference from venture\ncapitalists. Some experts tracking the ecosystem have written about the\nnumber of years left before “impatient investors take control of the\nstartups” – but how well founded are these suspicions? I spoke with a\nfew local venture capitalists for their side of the story, and perhaps\nunsurprisingly, many were upset with the media for “sensationalizing” a\ntrend that’s not quite the harbinger it appears to be.
Dev Khare\nfrom Lightspeed India Partners Advisors, a VC firm, says things\nshouldn’t be viewed as black and white. “Just because Flipkart\nannounced a professional CEO who happens to have an association with\nits investor firm Tiger Global Management doesn’t mean [its] founders\nno longer will have a say in the company,” says Khare.
“In the\nend it all boils down to making money. If a company isn’t doing well,\nthe equity that VCs and founders jointly hold will have no value. I\ndon’t see this as a battle between VCs and founders,” he says.
For\nother VCs, it’s all about the individual needs of a company, and\nlabelling the investor’s role as “interference” is the wrong way to\napproach the issue.
Tarun Davda, managing partner with VC firm\nMatrix Partners believes that all investors look out for the wellbeing\nof their investment, no matter how that presents itself.
“We’re\nhelpful when asked for advice but never fool ourselves into believing\nthat we know more about the business than the founders,” says Davda.
He\nbelieves there are often cases where founders feel they can better\nserve their company by bringing on a more experienced CEO, particularly\nwhere founders may lack the experience or skills to take a company\nahead through all stages of evolution. Davda provides the example of\nGoogle, probably the biggest startup success story of our generation,\nwhich had to bring in Eric Schmidt as its CEO early in their journey.
Devangshu\nDutta, managing partner of venture accelerator PVC Partners, chalks up\nthe media reaction to local culture. Dutta says Indians have a habit of\nlooking down on founders for handing control over to an outsider.
“There\nis no harm in accepting that sometimes a company needs a new person at\nthe helm to turn around things,” says Dutta. “In India, we tend to take\nthese things as failures; but [they] could be the outcome of well\nthought out strategic decisions.”
<\/span>
And in reality, for\nmany startups the Flipkart and Snapdeal episodes are a non-issue;\nfounders are aware of their capabilities and strengths, and their\nlimitations.
Ganesh Shankar, founder of FluxGen Technologies, an\nIoT startup, is fine to pass on the reins of the company to a person\nwho doesn’t alter the company culture too much. “I guess I [would] be\nglad if I can find a person willing to take on the top leadership role\nprovided he or she has the experience to scale the business,” he says.
Others\nview it as a matter of practicality, that these seemingly hard\ndecisions are part of the fiduciary responsibility of the VCs towards\ntheir LPs.
Pallav Pandey, CEO of startup BroEx, doesn’t believe\nthat VCs interfere in a company’s affairs unless they’re forced to.\n“Both founders and investors are stakeholders and after having given\nenough time to founders [to succeed], if it is inevitable that a new\nCEO needs to be brought in to steer the company forward, then it should\nbe done,” he says.
However, not all agree with this view. One\nstartup founder I spoke with, who asked not to be named because of the\npotential harm to his business’ relationships, says the reality of a\nboardroom meeting is darker than what’s usually projected.
“Founders\nand VCs are fair-weather friends. One can’t expect things to be always\namicable. The main flip side of raising huge funds is that somewhere\ndown the line a founder’s opinion gets diluted. That’s a hard reality,”\nthe founder says. <\/p>