Angst At Overhyped Investor Meet Exposes Startup Ecosystem’s Challenges — And Naivety

A major event hosted in Greater Noida in the National Capital Region, ten days ago billed as the ‘World’s Biggest Funding Festival Ever’ turned out for many disappointed — some outraged — paying participants, to be less than meets the eye.

Organised by the Gurgaon-headquartered QoFunder Pvt Ltd, the ‘World Startup Convention’ announced for three days — 24-26 March — invited startups to make their pitches to ‘1,500 institutional investors and venture capitalists’ and ‘9,000 angel investors’ — with 'Rs 49.6 lakh crore or $600 billion in assets under management already confirmed’.

The flyers for the event and the banners on their website suggested that ‘Chief Guests’ included Union Transport Minister Nitin Gadkari, Union Health Minister Mansukh Mandaviya, Uttarakhand Chief Minister Pushkar Singh Dhami and Uttar Pradesh Deputy Chief Minister Keshav Prasad Maurya. 

Videos featuring celebrity ‘influencers’ Chetan Bhagat, Ankur Warikoo, Prafull Billore and Raj Shamani aggressively promoted the event.

The minimum fee to attend was Rs 8,000 — and tens of thousands are said to have signed up, most of them startups looking to find investors.

Going by social media posts, many were said to be attracted by the  promise that Google CEO Sundar Pichai and Tesla founder-CEO Elon Musk were expected to attend, as was the crown prince of Dubai (we have not seen this ourselves). 

Typically at such investor melas, organisers bring together startups and small businesses looking for an infusion of capital on one hand and individual investors as well as investment fund managers looking for  avenues to get good returns on their capital. 

Philanthropy or a desire to promote and encourage budding startups is extremely rare as a motive. Mostly it’s about making money, the faster the better. 

The process has been called a form of ‘speed dating’ and the organisers of such events could be government agencies, looking to grow the startup ecosystem and ultimately the business landscape in their niche or state.  But organising such a meet has also become a successful niche of event management worldwide.

The Greater Noida Startup Convention is likely in the latter category — going by the high pressure hype with which it was marketed.

Disappointed Delegates

Many of those who turned up on the first day claimed to have spent lakhs of rupees for the opportunity — but found no big investors to whom they could pitch. 

The convention, they claim in angry posts since then, was a much smaller event with hardly some 70-80 investors present. Words like ‘scam’ are freely floating around the TV channels and the social media outlets — and a police complaint was made implicating the two co-founders of the organising agency QoFunder.

Much of the anger seems to be vented on the quartet of high profile ‘influencers’ whose video invitations to attend convinced many of the genuineness of the event.

At least one of them has washed his hands of any responsibility and says the video he made was not meant for circulation — a bizarre claim: why else were they made? 

The larger issue here is the whole business of high profile persons being paid money to endorse products or events which they subsequently disown.

One recalls the famous instance of Irish movie star and one-time screen James Bond, Pierce Brosnan who endorsed a paan masala brand, in a TV advertisement, thinking it was a harmless mouth freshener. A genuine mistake, as many accepted.

But what about our desi celebrity endorsers — should we expect them to do minimal due diligence before lending their name and reputation (paid of course) for any marketable event or item?

Again, it speaks more for the naïveté of the average startup, that so many failed to do their own due diligence before paying to attend events like the World Startup Convention.

If indeed they were told that both Sundar Pichai and Elon Musk were coming to India looking to invest — one would reasonably expect some level of scepticism.

Going by the facts rather than the frenzy, it appears unlikely that affected  startups can do much more than write it off as a learning experience — and move on. A legal case of scam or fraud may be difficult to prove. 

In case any one thinks the latest startup convention is the first to be engulfed in some sort of controversy — think again. 

The Ireland-headquartered ‘Web Summit’ is an event that moves around the world. Though pitched as a tech conference, it is in essence an investor meet, where local startups can meet investors.

They came to India for the first time in 2018, with an edition in Bangalore. Yet there have been some allegations that their events are overpriced and that the marketing is deceptive, leading startup founders to believe they are getting something for free.

At any rate, in Bengaluru, we saw a packed event at which the e-scooter brand Ather made its first public announcement.

Startups as a class are being wooed at many investor camps worldwide. They should perhaps choose their opportunity with care.

Worry Not, Somebody Will Find You And Fund You

The cricket season is here in India and the other day, a certain franchise team in South India brazenly showed off how its fans were waiting in line all night to buy match tickets.

The cheapest gallery tickets were available for sale only at the stadium gates (not online) two days prior to the match, and fans travelled thousands of kilometres in the hope of buying tickets.

When the social media team of this particular franchise was interviewing fans a few hours before the ticket counters opened, they boasted of their fandom by saying cricket ‘premis’ had been waiting for the last 12 hours, without having a drop of water, braving the summer heat, just to buy tickets and see their sporting heroes.

This became social media fodder for the franchise. It got viral hits across platforms, but the fans didn’t get their water anyway. If only they had decided to stay put at their respective hometowns, the franchise, sooner or later, might have been forced into opening ticketing counters at rural cities too.

Start-ups are exhibiting behaviour similar to frenzied sports fans. The more desperation you show to be part of glitzy networking events, the more arrogant the investors will get — as will organisers who may or may not be in it, to make a tidy buck.   

At Greater Noida last month, it was a cautionary tale at play: Hold on to your innovative idea. If it has promise, rest assured someone will find you and fund you.