The reason, according to Sumanth Raghavendra - in his post titled "Why a prize idiot like Rahul Yadav is precisely the kind of startup hero India deserves…and exactly the opposite of the one it needs" - is our "obsession with funding".
First a quick extract from Sumanth's post:
Despite all the buzz around India having arrived as a hot startup destination, there have been precious few aspirational startup exemplars since the halcyon days of Sabeer Bhatia and Narayan Murthy. A false dawn if ever there was one…
Equally tragic is the fact that folks who could potentially be startup heroes—a Sachin Bansal or a Vijay Shekhar Sharma—seem to be idols with feet of clay…either
backing the likes of Rahul Yadav with angel investment to continue this cringe-worthy charade of faux startup-ism or needing him to fill seats at their own events.
How I wish the media highlighted the story of a Santosh Panda who has diligently persevered to build Explara over several years with almost zero funding…or of a Nikhil Pahwa who selflessly fights for a public good like net neutrality at a great personal cost…or a Girish Mathrubootham who is pioneering a seminal “value arbitrage” competitive differentiator that other Indian SaaS startups would do well to emulate.
Clearly, Sumanth hasn't penned this stuff to win new friends! But is he right in saying that Indians are obsessed with funding - so much so that it "is more akin to a full-on, shameless public orgy"?
As the first in the country to create a business around funding announcements, we at Venture Intelligence are admittedly somewhat biased on the topic. (Venture Intelligence tracks private company financials, transactions - Private Equity/Venture Capital, M&A, etc. - and their valuations for our bread-and-butter. And getting paid by investors to do this - since 2002.) Having said that, hasn't Girish Mathrubootham - who Sumanth includes among the list of good guys - by raising as much as $94 million for Freshdesk, dealt with venture funding for what it is: a financing tool (nothing more, nothing less) that's available to be used by entrepreneurs if they so choose? Despite having been cut from the Zoho cloth, Girish has been pragmatic in not making "no VC funding or exit for me" into, well, an obsession.
For entrepreneurs who do raise funding, it makes tremendous sense to tomtom the event. As Sumanth has observed, the media loves funding stories. In fact, you just can't pay the media (officially at least) to talk about your great product - and consequently miss the opportunity to reach out to their audiences - than when it's coupled with a funding announcement.
So, why does the media obsess about funding?
Because funding provides a "chaapa" (ie, a seal or a way to "Cover Your Ass") to talk about a startup - since someone has actually cut them a cheque. Especially with Early Stage companies, where financial data does not provide much to go with, the funding "chaapa" counts for much among journalists, even the less lazy variety. Media visibility can also be a double edged sword: when things go south, the media will be quick to pull down the very startups they've celebrated the most. If the funding tap does run dry, going by the experience of 2000-01, we can bet that all the cover stories, special pages and awards events focused on startups, will get pulled. So, it makes sense for startups to bask in all the funding driven free PR that they can get, while the media's obsession is still on.
Regardless of the disagreement on the obsession factor, I loved Sumanth's piece for calling, ahem, "a spade a spade". It is such independent thinking and fearless commentary by folks like Sumanth, Mahesh Murthy, Alok Kejriwal, Anand Lunia, Sridhar Vembu and Haresh Chawla (an angel investor in Housing.com who's penned a very different sounding piece on Rahul Yadav) which makes tracking the startup ecosystem truly interesting.
April 2015 (Source: The Quint)
December 2015 (Source: Bizztor)