Source | Entrepreneur : By K. Vaitheeswaran
In 2013, I was struggling through the most diffi cult phase of my life. Indiaplaza (India’s fi rst e-commerce company) which I had co-founded in 1999 was going down badly. I had lost the best years of my life, my reputation had taken a beating, my family and I were being hounded and abused by creditors and I was desperately in need of money. At that time, the CEO of a well known e-commerce firm offered me Rs one crore in cash for a DVD consisting of our customer database and transaction histories.
I was willing to consider a payment by check to the company but he wanted to pay me cash. When I refused saying that I cannot sell company assets for cash in an underhand deal, he was surprised at my stupidity.
“What’s the matter? Surely no one will know.” I told him -“But I know. That’s all that matters.” Really, that’s all that should matter, but the reality in the Indian start-up ecosystem is di erent.
Over the past few years, there have been quite a few cases of entrepreneurs found wanting in integrity while executing business deals and transactions.
Founders of well-funded startups have allegedly raised funds from marquee investors at high valuations for subsidiaries and subsequently sold those to friends and relatives at lower valuations (without the knowledge of the existing investors) which later got acquired by other hyper-funded startups at high valuations. Now that the sordid details are breaking out in the open, all the involved parties are busy suing each other.
Where to Draw The Line:
A few years back, a co-founder of a start-up was allegedly involved in illegal nancial transactions and was arrested. A few years later, this entrepreneur has successfully managed to raise several rounds of funding from reputed funds for another start-up which con rms that some investors care two hoots about integrity as long as there’s some possibility of attractive returns.