Startup Funding, Angel Funding, Venture Capitalist Funding, Govt of India Funding, Innovation Funding, these are oft repeated terms amongst the business fraternity today. 

We hear lot of stories doing the rounds of how the invested on these entrepreneurs have left them bleeding.  It has been an uphill battle for the newbie entrepreneurs as there is no guarantee for their success even after infusion of the funds and whether they can return the funds to their investors.  It is only a handful of them who make it good with the use of these funds.

As far as India is concerned, it is only the traditional business houses that are seeing success and a lucky few startup entrepreneurs who have met with success en route to taping the capital market.

 
An example that comes to mind is PAYTM raising funds from ICICI even after huge accumulation of losses. Will it be able to break even & pay its investors remains a moot point. There is no mention how the fund requirement or viability was established when Paytm had piled up losses which already covers its fixed assets.

The recent controversy faced by ICICI is ample testimony to the ambiguity prevailing with regard to the money spend.  ICICI has taken high risk with a single customer, where there is no justification for performance is seen.  In other words, the losses that are accumulated are because of the funding utilized to sell freebies.

Someone rightly said “IT IS EASY TO STEP INSIDE SOMEONE’S SHOES, RATHER THAN ONE’S OWN SHOE”  I think this is true not only for STARTUPS BUT ALSO FOR ESTABLISHED Organizations. An entrepreneur might think ten times if he has to fund his own business but if it is funded from outside, he may do so without hesitation.  External funding is a double-edged sword in that on one end you get to spend without a second thought but on the other hand the investor may be affected as there may not be requisite controls on the money spend as evidenced by the recent turn of events. Most of the e-commerce portals be it Flipkart, Myntra, PayTM have all tried to woo the customers through big ad spend, discounted sale price and thereby secure customer loyalty but then ultimately it is now a fact that loyalty is not built on Freebies.  It is a company’s trustworthiness that develops customer loyalty.