Global VC firm Sequoia’s statement on corporate governance has sparked conversations on ‘people risk’ in making investments at both early and late stage start-ups. This statement highlights the responsibilities of founders while riding on investor’s funding and also flags cautions for Indian start-ups ecosystem which has been growing exponentially in recent years. As per the firm’s statement, in investments made at seed or early-stage there is hardly a business to diligence. Even at a later stage, investors can face negative surprises, post-investment, if there is willful fraud and intent. Sequoia is backer of many Indian startups. In the past few months, start-ups have become the focal point of corporate governance issues with the most recent being a B2B fashion e-commerce platform, which witnessed an internal probe into the company’s financials and accounting practices.
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